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Thirty Five Million Thursday – 2 Months of Rising Unemployment

Unemployed New Yorkers Demonstrate Photograph by Everett35M people have lost their jobs in 60 days.

The way stores and restaurants are opening, with limited customers allowed in and limited seating – getting back to normal isn't normal at all. “We have a situation where people and families in every part of the country are facing this unprecedented crisis, and they are looking for relief,” said Congresswoman Pramila Jayapal yesterday, where she co-sponsored a bill with Josh Hawley (R-MO) to guarantee incomes during this pandemic.  “This is a proposal with broad support that should be taken seriously,” she added. “What are we waiting for? Are we waiting for unemployment to reach 50 percent?

The only reason we're not seeing people marching and protesting like they did in the Great Depression demainding Government Support is because they can't leave their homes.  35M people is 10% of our country but it's 20% of our work-force and we didn't start from zero unemployment – this is a dire situation and things are starting to unravel and, once again, we are being met with a big ball of dysfunctional incompetence from the Administration. 

See, I didn't say TRUMP Administration so you can pretend any Administration could have F'd America over this badly.  The Hoover Administration was about as incompetent as the Trump Administration.  In fact, with promises of high tariffs and low taxes – you can see that Trump pretty much just copied Hoover's playbook – including kicking off the country's second Great Depression:

Political Ad for Herbert Hoover called "A Chicken for Every Pot"

Losing the jobs couldn't be helped, they are a  result of the Lockdown Policy which was a rational response to the virus but the WAY we are losing the jobs should have been helped.  Wages in the US are $6Tn per year or $500Bn per month and you can see what kind of money the Government is throwing around so the question is – why couldn't they simply throw some at the workers?  Just give the workers $1Tn while they take two months off and there is ZERO damage to Consumer Spending Power which, in turn, drives the economy.  

Of course there would be some things consumers wouldn't spend on, like Retail, Restaurants, Travel and Live Entertainment but then we could have compensated JUST those industries and it would have cost half as much as we have spent on this ineffective mess of a bailaout already.  

Letters to editor in Naples Daily News Monday, March 2, 2020Throwing money at the Stock Market BECAUSE you didn't deal with the virus that is causing the problem in the first place is pointless.  Unfortunately, we know Trump gauges his success based on the Dow's performance and we know he doesn't think 100,000 or 200,000 deaths by incompetence are a big deal – not when he has donors and their portfolios to worry about.

We don't have to CURE the virus, we just have to give people the confidence that the situation is in hand but, by giving people confidence, I don't mean lie to them until they think things are fine when they are not – that's only a short-term fix – the Administration needs to do what other countries have done to get on top of the virus and that's:

  1. Extensive Testing
  2. Extensive Sanitization
  3. Enough PPE for EVERYONE
  4. Extensive Tracking.

Yes, we don't want to lock up 80% of the population to protect the 20% who are severely at risk, but if we let the 80% out and they get each other infected – how are the 20% going to remain unaffected – even if they stay locked up? The simple, logical solution is to only let the unaffected out so that the people who are out can't infect the people who have to stay in and vice, versa.  Why are we not doing that?

Meanwhile, Mr. Hawley, the Missouri Republican, has introduced a proposal that would cover 80 percent of employers’ payroll costs up to the median wage, about $49,000 a year. A companion bill that Mr. Hawley introduced goes further, providing families and single parents making less than $100,000 with a monthly check for the duration of the crisis.

“Let’s not overthink this,” Mr. Hawley said in unveiling his bill. “These families need relief — now — to pay bills that are coming due, make those emergency grocery runs and get ready for potential medical bills. Let’s get it to them.”

He's a Republican and he's trying to help – we'll see if anyone lets him.  

 


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  1. I think that there is a problem that is underestimated at the moment – these 35M people losing their jobs are also losing their healthcare benefits in the middle of the worst pandemic in 100 years. It's going to take years to recover these jobs so all the gains from Obamacare will be erased in months. In fact, Trump and Co. want to dismantle Obamacare, so we will also add people to that list. That means people not paying their bills, going BK or not seeing doctors and dying needlessly. When you factor everything, the cost of the virus is going be astonishing!

    Once again, it will probably take 8 years of a Dem administration to clean up the mess left by a GOP admin (that's twice in 20 years now) and then people will forget and get back to the people who left the mess to begin with….


  2. That's going to end well:

    https://talkingpointsmemo.com/news/wisconsin-high-court-tosses-out-governors-stay-home-order

    The Wisconsin Supreme Court struck down Gov. Tony Evers’ coronavirus stay-at-home order Wednesday, ruling that his administration overstepped its authority when it extended it for another month without consulting legislators.

    The 4-3 ruling essentially reopens the state, lifting caps on the size of gatherings, allowing people to travel as they please and allowing shuttered businesses to reopen, including bars and restaurants. The Tavern League of Wisconsin swiftly posted the news on its website, telling members, “You can OPEN IMMEDIATELY!”


  3. trump just doesn't get it dr covid is his boss and dr fauci simply the messenger and his worst dilemma you can lie all you want to a virus its not listening.


  4. Phil, your Pandemic Playlist has been spot on.  It gives new meaning to most of the songs I've been listening to for years.  THANKS 


  5. Good morning!

    Image may contain: 1 person, possible text that says 'MY DAILY FACEBOOK FEED let us work! freedom! reedom! stay home where's your mask!'

    Make that 36.5M unemployed – amazing!

    I don't think people realize that means they don't have jobs to go back to – even if the virus ends tomorrow.  Not only that but look at how many businesses that are re-opening are hanging by a thread – there's going to be another wave of closures to come – especially if things don't ramp up rapidly.  

    And what StJ said!

    Big Chart now very dangerous at the 50 dma for the Dow and the NYSE so let's watch those closely.  I think we'll bounce off them but weak bounce or strong bounce is what matters.

    Wisconsin/StJ – Well the key is "without consulting legislators".  Now, I know the legislators are conservative morons but at least it's not setting a precedent that no Governor can issue orders.  Maybe people will learn that the people they vote for can affect their lives in very real ways and will take more into consideration than what party flag they wave in the future.     Nah….

    Virus/Tommy – Covid is the new honey badger and Trump is the cobra.

    You're welcome Stock – just a glimpse into my head (there's always something playing in there). 


  6. Good Morning.


  7. 1,200 on /RTY is good for a bounce line (very tight stops below).  

    Down from 1,340 but I'd look for a 20-point bounce (from 1,300) as very likely at $50/point.

    Been a long time since we had a Futures play!


  8. Phil

    I recently started a new ETF portfolio for my wife/kid.  It's a long slow play (20 years). Lump sum start, adding monthly.

    I know that's not the usual focus here but it's certainly proving difficult to stick to my original plan and continue buying in regardless of market direction – especially at the beginning! 

    Intersted in your take on that long, averaged style play as part of ones investments?

    Also here's the breakdown; 

    SPY 35%
    QQQ 8%
    EMQQ 6%
    DEM 2%
    IBB 10%
    VDC 4%
    VNQ 5%
    ICLN 10%

    GLD 3%
    GDX 2%

    VGSH 10%
    TLT 5%

    thanks!


  9. Morning, All! Webinar replays are now up!

    YouTube:

    https://youtu.be/abBGQ-_-Rpo

    BitChute (still processing, but up soon):

    https://www.bitchute.com/video/p30XajTCrprQ/


  10. Phil/List

    another chance to go into the trade?

    CIM , ET , FCAU , HBI , NLY , PAA , SIG , SPWR, SKT and LQMT (0.07)

    maybe add 20% more to existing positions. not sure whether they will keep going down more.

    regards




  11. We saved New York once. We can do it again for all states



  12. Cartoon: Legal trouble? Better buzz Barr!


  13. WFC must be keeping their div. What a move.


  14. Trump told states it was "their problem" to handle the covid 19 and now the legislative  dead heads in Wisconsin has said it is "their right" to make those decisions. Amazing. The Dems just lost the 11th district to another Repub after Duffy quit who did absolutely nothing for anyone except sire 8 kids and Tiffany is another Trump stooge who won because of gerrymanfering the lines and dropping out the more educated areas. Dave Obey was in for four decades and actually worked for his constituents BUT was a Dem! No one I know is listening to this new garbage but they are mostly educated teachers etc but the dummy's here will go to the bars, restaurants etc. Many of the restaurant owners will pause as I am sure this maybe over thrown, but if it goes to the supine court of course  its hopeless.


  15. ETFs/Potter – Well I'm not a fan as my attitude about ETFs is you are buying bad companies with the good.  The mix is adequate and, if you don't trust yourself (or your family) to pick stocks and you just want to at least stay ahead of inflation, then you are serving your purpose though I'd try to get a bit more dividends along the way.  

    I'd go with:

    • BRK.B – Berkshire Hathaway (20%) 
    • AAPL – Apple (15%), pays 1% 
    • IBM – IBM (5%), pays 5% 
    • INTC – Intel (5%), pays 2% 
    • PFE – Pfizer (5%), pays 4% 
    • GILD – Giliead (5%), pays 4%
    • TGT – Target (3%), pays 2%
    • HD – Home Depot (2%), pays 2.5%
    • ICLN - Clean Energy (10%), pays 1.5% 
    • Gold - Barrick Gold (5%) 
    • WPM – Wheaton Precious Metals (5%), pays 1%
    • VGSH – (10%), pays 2%  
    • TLT – (10%), pays 2%

    So by replacing indexes that cost you 0.5% expenses each year (10% over 20 years) with stocks that pay about 2% dividends (40%) you are already 30% ahead over 20 years.  You can buy the Qs, which are mostly AAPL but also TSLA and other over-priced nonsense or you can buy lumps of gold and hope they go up in value or you can buy a miner that already has 70M ounces of gold in the ground (at a tremendous discount) and not only makes money selling it but also takes that money and reinvests it in more gold (when it's cheap) to also sell when it's expensive.  

    I think I'd go 5% less Treasuries and take DIS at $100 if you want more consumer.

    Wow, 2nd time was a charm on /RTY!

    Out at goaaaaaaallllllllllllllllllllllllllllllllllllllll!!!!

    List/Pat:  They are all good pick-ups but this is a very dangerous time to be entering things.  I would wait until we stabilize a bit.

    CMG/Rn – So annoying, they were right at our target.

    CMG Short Call 2020 19-JUN 950.00 CALL [CMG @ $915.03 $12.44] -2 5/8/2020 (36) $-6,000 $30.00 $8.35 $-30.00     $38.35 $12.93 $-1,670 -27.8% $-7,670
    CMG Short Put 2020 19-JUN 850.00 PUT [CMG @ $915.03 $12.44] -2 5/1/2020 (36) $-7,400 $37.00 $-10.50     $26.50 $-3.50 $2,100 28.4% $-5,300
    CMG Long Put 2022 21-JAN 850.00 PUT [CMG @ $915.03 $12.44] 4 5/5/2020 (617) $68,452 $171.13 $-5.78     $165.35 - $-2,312 -3.4% $66,140
    CMG Short Put 2021 15-JAN 750.00 PUT [CMG @ $915.03 $12.44] -4 4/30/2020 (246) $-29,800 $74.50 $-4.70     $69.80 $9.30 $1,880 6.3% $-27,920

    Wisconsin/Pirate – Must be a tough state to live in politically.  


  16. pirate – be safe and expect WI cases to rise quickly with deadly effect


  17. Phil We lived in Fla for years and when the GW/ Gore voting debacle hit and found out Floridians couldn't even count and we would be stuck with these right wingers destroying everything we left b 4 the 2008 financial crises. We had friends who lost everything, BUT like you I warned everyone and no one listened. So we came to a state that at the time was progressive with JIm Doyle as governor. They actually had super programs that were set up, back up medical for the poor called Badger Care, A Shelter for abused adults and children etc. Then Walker got in and basically disbanded everything worthwhile for the middle class. Now we have Evers who is trying and Tammy Baldwin fighting the s… coming down hill. Florida has not changed except got worse in the 20 years and so has Wisconsin. Minnesota seems to act rationally, but I am ready tor a big change. Maybe hiding out in a cave? 


  18. One small request I have is to stop referring to people, or groups of people, as "stupid" or "idiots." Not only is it demeaning, it's factually inaccurate. Trump and some of his ilk are some of the smartest people I've ever encountered. This new brand of Russian-aligned autocratic, corrupt and cronyist globalists are a smart, clever, brazen, motivated group of anti-american traitors and they are coming for you. They are coming for american democracy, to replace it with russian fascism. Everything they do is in service of this agenda that unifies them to a point of sinister singularity. They can't win at the ballot box so the ballot box has to go. They are ruling from an increasingly smaller minority position and each percentage point reduction requires that much more militaristic control. The dems lost long ago when they refused to address inequality. We are basically now germany in the 30's and we were only a massive job loss event away from fascism in america, which is now here.

    And they will. not. stop. They will not stop until you are dead.


  19. I think if you're a democrat you need to prepare yourself that there is NO WAY trump is going to "lose" the november election. This is about as obvious to me as buying bitcoin at $7. This would be if we had an election to begin with, which we won't (well, we will have an "optical" election, but not a real one). You need to prepare for what's coming. Once you shed your tightly held, wrong beliefs, this becomes mentally much easier.


  20. Dividend Portfolio Review:  $141,060 is down 29.5% but it's up $5,847 (5.8%) from our last review thanks to dividend payouts from ET, T and SKT so more money to collect next month too.  As I said last time, I don't consider the market out of the woods until this portfolio is back on track.

    • TWO – Earnings were fine and we're just waiting for a run up to sell calls but we can sell 10 Dec $4 puts for $1.15 ($1,150) so let's get that done and we'll ask for $1 for 10 Dec $5 calls ($1,000), which would drop out net to $2,150 with a nice $2,850 (132%) profit if called away at $5 in December.  Who says dividend stocks are boring?  Good for a new trade, of course! 

    • PFE – Certainly not worried about being assigned PFE at net $22.50.  In fact, I'd rather have that happen than just collect another $2,335.  Still, look how fast we made 57.5% just selling a simple put…  Repeat after me: "People don't pause popping pills in a pandemic."

    • CHL – We'll have to roll the short June puts but I'm willing to wait and see.  However, since this is a nice re-dip, let's sell 5 Sept $37.50 puts for $4 ($2,000) and put a stop on the short June $42.50 puts (now $7) at $7.50 so it's like a roll except maybe we get a much better price on the short June puts as they were much lower two weeks ago.  Of course, if CHL does go lower then we can also sell 5 more Sept $37.50 puts for a higher price so it will be a 2x roll for better than even money, worst case.

    • ET – OMG they held $6.50!  I love these guys, they just spit out $610 and we only paid net $4,760 for the position so that's 12.8% back in a quarter – I can live with that!  People were freaking out about this one as we started at $11 but doubled down at $5 instead of panicking and now our average is $2.38 ($4,760/2,000) or, if we get assigned 1,500 more at $8 ($12,000), our average cost per share pops to $4.78 – oh, THE HORROR!  This is why I tend not to panic during sell-offs – I can see ahead to how it will work out.  

    Submitted on 2020/03/20 at 3:30 pm

    ET – What a catastrophe.  I really can't see how this is that bad for them so here we have to DD at $5.15 ($5,150) and then we can buy back the short 2022 $12 calls at $1 ($1,000) and sell 20 2022 $5 calls for $2 ($4,000) and, although I'm not worried about the 10 short $10 puts at  $6.10 ($6,100), I do like selling 15 of the $8 puts for $5 ($7,500) so consider that the roll.  That's net $750 spent to turn the net $6,800 position that would be called away at $10 ($10,000) for a $3,200 profit into a net $7,550 position that would be called away at $5 ($10,000) with an $1,800 profit.   Of course, we need to be over $8 really because of the puts but we'll roll them along as long as ET is solvent.  If they keep paying the dividends, we'll be thrilled to have 2,000 shares instead of 1,000 shares.  They just paid 0.305 on 2/6 too so that's $305 we just collected and it will be $610 in May!  

    • MO – I'd like to DD but $18,000 is too much with the portfolio hurting so much.  This position will fix itself so we save money by ignoring it.  

    • SPG – This was a better use of our capital though even cheaper now.  Great for a new trade. 

    • T – Another one I'd like to DD on.  In this case, let's buy back those 2022 $35 calls for $1.30 as they can only pay us about 0.07/month so where's the penalty for being wrong?  One way or another, we'll have to sell more productive short calls.    Those short 2022 $30 puts for $6.50 are a fantastic way to add cash to a portfolio!  

    • F – Will take ages to recover but we're not in a position to adjust so just happy if it does.  

    • M – Still not BK!  I'm a bit worried about the short $13 puts but I'd rather wait for 2023s to come out. 

    • SIG – They are weathering the storm and I'd DD at $6 but not $8.  Of course, we already sold the $8 puts for $3.50, promising to DD at net $4.50 – THAT I would be excited about so good for a new trade there too.

    • SKT – Bang, bang, bang on this one.  Sure we bought them for $10.38 and sure they are now $5.83 but this is one of my favorite stocks!   We already committed to buying 3,000 more at $4 – another good fund-raiser.  


  21. beliefs/bdc  Get some air and read a book…

    https://www.amazon.com/Stillness-Key-Ryan-Holiday/dp/0525538585


  22. Cave/Pirate – My cousin has a cave in France if you need it… cool

    Stupid people/BDC – You are right, there is no need for name calling or, as scientists call it "categorizing".  Personally, I would rather believe that they are stupid rather than knowingly evil – that really annoys me!  It's not a Russian thing, Russia is run by Oligarchs as they were easy to take over when the Soviet Union collapsed so then the Oligarchs say "How can we get the EU to collapse" and "How can we get the US to collapse" – then they can run the same playbook and take us all over.  

    Speaking of military – did you see Trump is going to have the army hand out vaccines.  In other words, right around election time, Trump is going to march his troops into the US (a violation of the constitution) and position them EVERYWHERE.  What could go wrong?

    Trump mobilizing U.S. military to deliver coronavirus vaccine

    The Terminator 2 Awesome Gif Image Collection


  23. BDC,Phil – maybe you guys should save some of these 'thoughts' for a book, after the pandemic. :(


  24. BDC I take issue with they lost because they didn't fight for "equality." The dems got the Equal Rights for women and minority's started by Jack Kennedy and continued by Johnson not to mention food stamps, Medicaid and all the programs that help the poor. Clinton got the don't ask don't tell for gay rights in the military not to mention the expansion of computers for schools. Obama the Affordable Care Act so all could have health coverage. They lost because of WHAT?


  25. Pirate – Memories shorten when optimism goes missing….


  26. Pirate – the fight ended with Reagan. Obama "the socialist" raised capital gains from Bush's 20% to …… (get ready for it):

    20%.

    Billionaires can sit around in hammocks and make money and pay 20% and "income" tax goes up to 40% before FICA and state and other taxes even come into play. You know, because "capital gains" income isn't income income. It's special and privileged. Meaning 1% of people own 50% of it.

    Meanwhile – insert all of the financial inequality statistics here that we all know – stagnant hourly wage growth going back to the 70's while top 2% pay has gone up 10X  and top 0.01% pay has gone up 1000% etc etc. Have you forgotten about all of those in your comment? Seems to be the memory thing comes into play here. I know, statistics statistics, boring, zzzzzz, "memory" and "optimism" or whatever direct accusation that has no statistical significance or meaning whatsoever (as opposed to a personal slight, which seems to be very important these days). Jews in Poland were "optimistic" in August, 1939, if I recall brightly.


  27. Phil- Hello from north of the border!  I have not yet put on the SPWR trade so I am just wondering if you would recommend right here as an entry?  Market bouncing back overall but SPWR is still off ~ 8% on day although IV likely coming in.  Thoughts?  Thanks in advance…..


  28. goofy little penny stock


  29. Post-pandemic book/1020 – I don't know, my cuneiform's a little rusty…

    Obviously, that joke was for the Democrats. 

    As was that one…

    SPWR/Hicket – I like them because they make the most efficient (not the cheapest) solar cells.  INTC used to make the most efficient (not the cheapest) CPUs.  Worked out well for them in the long run as Moore's Law tends to wipe out the price difference in a few generations and then people only want the best.  

    I like the last slide as revenues were down 25% and they quickly scaled back expenses to compensate – that's a great forward-looking sign.

    The best thing about them is you can sell the 2022 $8 puts for $3.50 and that nets you in for $4.50 if they go lower (33% off) or, if they get away and go higher, you still make 77% on your cash commitment in 2 years and the margin is only $472.36 if you sell 10 for $3,500 – so it's a very efficient way to generate an income.  

    If you want to be more aggressive, the 2022 $5 ($2.85)/$12 ($1.30) bull call spread is $1.55, so the break-even there is just about the current price at $6.55 but you only tie up $1.55 with $5.45 (351%) upside potential at $12+.  

    Too bad we already have them or I'd pick them again!

    Bang3 GIFs - Get the best GIF on GIPHY

    A little ahead of themselves but nice-looking BDC.


  30. Hackett/Phil

    Don’t forget that SPWR is supposed to breakup at the end of the second quarter.  I don’t know an exact date.  Might make for a messy options if they rename the new issues resulting from the breakup.


  31. Hicket

    Sorry auto correct changed your name!


  32. SPWR/DC – Oh I hate it when that happens, please remind us when it's close.

    Speaking of SPWR:

    Future is Now Portfolio Review:  $121,003 is up 21% this year and up $13,778 since our last review so nothing to complain about here.  We didn't even have to touch it and we have more cash than we started with so plenty of buying power to add some new positions when things calm down.

    • PLUG – On track
    • SQ – Doing too well, we almost can't keep it up 60% already with 18 months to go.  Still, there's a safety factor as it's not just that we can "only" make $1,258 more but that we're fairly positive we will and there's pretty much no way this will be in trouble and the margin is only $423 – so there's no reason not to keep it.

    Again, this is why we have Watch Lists.  That way, when there's a huge dip in the market, we have a list of stocks we already know we'd like to buy and all we need to do is double-check our premises and see which ones are giving us the best deals and then we're ready to pull the trigger.  I guess it's just doing your homework BEFORE it's due – something I struggle to get my kids to appreciate…

    • TOT – We were too nervous to sell puts but I think we can be confident $25 was a good bottom so let's sell 5 Nov $30 puts for $3.25 ($1,625) to round out the spread.  

    • BYND – Got a boost from the meat shortage.  People were saying BYND was the only meat left in the supermarket as if that was an indicator that no one wanted it but, to me, it meant a lot of new people were going to try it.  We are jokingly in the money on this one at net $15,130 on the $25,000 spread that's over 200% in the money.  Although a 40% return is not very exciting for PSW Members – this is certainly good for a new trade with that kind of return.

    • SPWR – We liked it so much we played it twice. Both long-term and both with $5 calls and $8 puts – just different upside targets.   Potential is net $48,000 for the 2 and currently net $1,350 so there's $46,650 (3,455%) upside potential – so I'd say that's good for a new trade!  

    So we have about $60,000 worth of upside potential, mostly SPWR, over the next 18 months and we have plenty of buying power so we'll keep our eyes open for positive trends so we can go Back to the FUTURE!!!

    Back to the future GIF - Find on GIFER

    Here's the stocks we were looking at:

    Solar is the future and the future is now.  

    Let's see:  Crypotcurrency, Solar Energy, Hydrogen Fuel Cells, Quantum Computers, Virgin Galactic, Gene Therapy… 

    Submitted on 2019/12/10 at 1:41 pm

    I'm thinking we should put together a portfolio of "Future is Now" stocks like SPCE – Something that represents the leader in each Future Field like CRSP, ISRG, etc…

    Submitted on 2019/12/11 at 10:53 am

    • SPCE/Albo – I want to set up a "Future" is now Portfolio, let's talk candidates:
    • SPCE
    • TSLA
    • BYND
    • SPWR 
    • LMT (Fusion) 
    • DIS (entertainment) 
    • XYL (water treatment)
    • WM (more people, more waste)
    • CRSP
    • IBM (AI) 
    • QCOM (5G…) 
    • ISRG 
    • BLDP, PLUG, FCEL (not sure which)

  33. Hackett is my golf name!

    Thanks for the input.  I am trying to get filled as I had to step away for 40 mins and it seems that $1.95 is the new $1.55 ……


  34. Good evening.

    1020 – I'm putting the book in my Amazon cart.

    Good news for everyone – we have a vaccine!!! Sign me up for my Bill Gates Microchip!

    Gotta have to flip and go long DIS now. The humanity!


  35. Phil,

    Current thoughts on VIAC leadership (Shari R), debt laden balance sheet and last 3 declining quarterly earnings. Will it come in from the cold anytime soon? 

    Uncomfortably, I have a few Jun and Jan 32.5 puts (1.11 and 2.25, respectively from way back when the earth was young); looking at the Jan 22 13s @4.30.

    Thanks


  36. And now we are up 300?  What an insane market! 

    If we get back over 2,850 by tomorrow, the move down wasn't bearish.


  37. Someone just bought 13 million worth of MSFT $120 July calls. Pretty much made the market for that contract


  38. Thought for the day: 

    "If a currency fails and no members are left in the Union, does it make a sound?"


  39. MSFT/RN – So they bought about 2,200 contracts?  At $58, they have no premium so most likely they are intending to buy 220,000 shares of MSFT ($39M) and they either don't want the price to get away from them or they figure their buy will push the calls up and then they cash out at a higher price for free money but, given they have $39M to spend and maybe they make $500,000 on the calls – it's more likely they are just keeping the price locked in ahead of a buy. 

    So Trump said he is open to another round of payroll stimulus – that's what this rally is about. 

    Oil $27.50 is helping too.  

    • Crude oil futures (CL1:COMsurged today after the International Energy Agency forecast lower global stockpiles in H2, as green shoots of an oil recovery are sprouting with lockdowns easing in Europe and the U.S. and China attempting a semblance of normal life.
    • WTI settled +9% to $27.56/bbl and Brent +6.6% to $31.13/bbl.
    • Goldman Sachs' commodities team, led by Jeffrey Currie, says the worst is now over, and the risk of a sharp pullback in oil prices has diminished as the rebalancing of the crude market gathers pace.
    • Goldman raised its May global demand estimate by 1.4M bbl/day while still forecasting a decline of 16M bbl/day from pre-COVID levels, but recovering demand and lower production should push the global oil market into deficit in June.
    • Walt Disney (DIS +2.2%) has reached a deal with unions at Walt Disney World on safeguards for a return to work, according to Reuters headlines.
    • Disney World has been closed since mid-March, but on Tuesday began taking reservations for July visits, adding momentum to plans for a reopening.
    • Chick-fil-A leapfrogged over Taco Bell (NYSE:YUM), Burger King (NYSE:QSR), Subway and Wendy's (NASDAQ:WEN) in the last year to become the third highest grossing restaurant chain in the U.S. behind McDonald's (NYSE:MCD) and Starbucks (NASDAQ:SBUX), according to Restaurant Business.
    • Chick-fil-A generated $11.32B for the year at its 2,470 locations. By comparison, Taco Bell has 6.7K restaurants and Burger King has 7.3K, with both generating less than the southern chicken juggernaut.
    • "They have the highest quick service restaurant sales in the industry," notes Pacific Management Consulting Group's John Gordon. "It’s higher than Shake Shack. It’s higher than many steakhouses with bars," he observes.
    • The kicker is that all those sales came with Chick-fil-A only open six days a week and some increased interest in Popeyes and Wingstop (NASDAQ:WING). Chick-fil-A also scores well in consumer surveys from senior citizens all the way down to children, indicating brand loyalty may stay strong.
    • Piper Sandler moves its price target on Chipotle (CMG +2.1%) up to a Street-high $1,100 from $850 on a favorable view of the restaurant chain's pandemic response.
    • "Fundamentally the company has the ability to pivot and the financial resources required to carry out its long-term growth strategy. From a sentiment perspective, the tone of the vast majority of questions was positive. In terms of industry derivatives, the durability of recent comp trend improvements was debated. In an effort to remain balanced, it is important to note delivery mix may have different margins implications, commodities remain volatile, and very near term growth may be disrupted due to permitting issues."
    • Chipotle hasn't crossed over $1,000 yet, maxing out at $966 earlier this year.
    • Alcoa (AA -4.2%) CEO Roy Harvey offers a downbeat view of an economic recovery, saying too much uncertainty remains in global economies to feel comfortable in forecasting improvement from the coronavirus crisis.
    • "I don't think we've yet got the clarity, nor do we have the orders on the books, to signal that there is a definitive recovery coming," Harvey told a Bank of America metals conference. "I don't think that represents the fact that nobody plans to restart, I think that represents the fact that there is not yet certainty that that restart is going to happen."
    • The "industry is right now producing more aluminum than it needs" and needs a action from global producers to cut capacity, Harvey said.
    • Harvey is not seeing signs of a global recovery yet, even as China works to restore operations, adding that the country's Q1 slowdown because of the COVID-19 crisis sparked an increase in inventories of 2M metric tons, followed by a drawdown of 400K-500K tons as it returns to work.
    • "There is no interest or excitement on my part to having a half-full dining room while everyone is getting their temperature taken and wearing masks, for not much money," says the famed restauranteur. "We won't be welcoming guests into our full-service restaurants for a very long time—probably not until there’s a vaccine."
    • Meyer shut down all of his 19 NYC restaurants about two months ago, and days later laid off 2K employees.
    • Meyer, however, is planning on soon offering takeout service at a number of his places, and could be convinced to allow outdoor dining. "I would think about anything that is safe and profitable … The only way we can responsibly get back in the business of employing people is to not go out of business. It’s already incredibly hard to survive."
    • GNC Holdings (NYSE:GNC) rallies after Bloomberg reports the company received an extension on key debt repayment terms through August.
    • Earlier this week, GNC warned on bankruptcy risk.
    • Shares of GNC are up 12.02% to $0.47.
    • Bloomberg reports that the Trump administration plans to keep 90 days' worth of medical supplies in the national stockpile for potential use against COVID-19 flare-ups as the country reopens.
    • The Strategic National Stockpile will maintain the supplies, including testing gear that wasn't included in the past, while additional surge manufacturing scales up according to a senior administration official.
    • The White House plan also calls for contracts with manufacturers to ensure product flow into the stockpile, similar to the current approach used by the Department of Defense.
    • The objective is to have 1B N95 masks in inventory by fall, as many as 7M gowns as well as medicines and other supplies.
    • Following in the path of other retailers, Starbucks (SBUX -1.0%) is asking landlords for changes to lease terms and base rent for the next twelve months due to the impact of the pandemic on traffic and sales.
    • The restaurant company is looking for changes to go into effect on June 1.
    • Starbucks estimated it lost $915M in sales during FQ2 from store closures.
    • One of the big reveals at Tesla's (TSLA -1.4%) much-hyped Battery Day is expected to be a plan to introduce a new low-cost, long-life battery for Model 3 sedans in China.
    • The battery, which could be introduced later this year or early next year, is anticipated to last for a million miles of use and bring the cost of EVs in line with gasoline models. More advanced versions of the battery will be used in North America and other major markets down the road.
    • In addition, the EV batteries could have second and third lives on the electric power grid.
    • CATL confirmed an electric battery supply deal with Tesla earlier this year and is believed to be part of the next-gen battery development.
    • The last word from Tesla was that the Battery Day event would be in late May.
    • A bounce in bank and financial stocks help to pare the broader market's loss in late morning trading.
    • The Financial Select Sector XLF SPDR (NYSEARCA:XLF) rises 1.1%, on track to break a three-day 7.3% decline.
    • Wells Fargo (NYSE:WFC) surges 6.5% after tumbling to an 11-year low yesterday. There's also been speculation that PNC Financial (PNC +0.1%) may use proceeds from the sale of its BlackRock stake to shop for an acquisition.
    • Among other movers in the bank sector: Bank of America (BAC +2.4%), JPMorgan (JPM +2.8%), U.S. Bancorp (USB +4.0%), Regions Financial (RF +4.0%),  Comerica (CMA +6.4%), CIT Group (CIT +6.8%).
    • The Dow is off 0.1%, vs. a 2.0% decline earlier; The S&P 500's earlier 1.9% fall shrinks to -0.3%, and the Nasdaq, down 0.5%, had declined as much as 1.8% earlier.
    • Treasurys also rise, with the 10-year yield falling 3 basis points to 0.62%.

  40. So are we to believe China has made a big leap in battery tech?


    • Raymond James is slightly more cautious on Home Depot (HD -0.6%) and Lowe's (LOW -2.6%) after the home improvement retailers benefited in Q1 from high demand for consumer staples and with some retail outlets closed.
    • "We believe strong trends likely continue into 2Q20 as the Pro customer works down their backlog of delayed remodel projects. However, we do believe that topline strength for both HD and LOW could decelerate in 2H20 and into FY21, as the macro environment will likely remain challenged," writes the RJ analyst team.
    • "We have taken an opposite view of the recovery path relative to the Street. Having said that, we believe HD has a unique opportunity to gain share from struggling independents given its superior digital/omnichannel and supply chain capabilities."
    • Looking further down the road, Raymond James sees a bigger picture opportunity for Home Depot to take market share over the next one to two years as independents shutter doors and its wide assortment, cutting edge supply chain and digital capabilities position it to capture displaced consumers.
    • The firm keeps a Market Perform rating on Lowe's and Outperform rating on Home Depot while increasing the price target on HD to $245. Both retailers are seen reporting a 5% comparable sales gain in Q1.
    • "If everything goes according to plan, we will be launching American astronauts, on American rockets, from American soil – for the first time since 2011 – in the first quarter of next year," according to NASA Administrator Jim Bridenstine.
    • "While not done yet, [Commercial Crew] is poised to save the Agency approximately $20B-$30B, and provide two, independent crew transportation systems," referring to Boeing's (BA -1.5%) Starliner program and SpaceX's (SPACE) Crew Dragon capsule.
    • Beyond the cost savings, NASA noted that there are already deals in place to use the spacecraft for flights by private astronauts.
    • The regulator overseeing Fannie Mae (OTCQB:FNMA -4.3%) and Freddie Mac (OTCQB:FMCC -4.0%) extends its moratorium on foreclosures and evictions until at least June 30, 2020.
    • The current moratorium was set to expire on May 17.
    • “Extending the foreclosure and eviction moratoriums protects homeowners and renters with an Enterprise-backed mortgage and provides certainty for families,” said Mark Calabria, director of the Federal Housing Finance Agency.
    • FHFA will continue to monitor the coronavirus situation and update policies as needed, it said.
    • Previously: Fannie, Freddie directed to suspend foreclosures, evictions (March 18)
    • Bank of America says airline carriers with more conservative balance sheets will be in the best position coming out of the crisis, pointing to Buy-rated Southwest Airlines (LUV -3.6%) as showing off the best balance sheet in the group.
    • Other key positive factors that BofA sees for Southwest are the early signs of improvements, the ability to pay down debt faster than peers and the firm's preference for organic growth.
    • The company tomorrow will open more than 50 drive-thru COVID-19 test sites in five states – Arizona, Connecticut, Florida, Massachusetts, and Pennsylvania – and expects to have up to 1K locations across the country by the end of the month. The goal is to be able to do up to 1.5M tests per month.
    • Self-swabs will be performed at the sites. Testing is to be done at a third-party lab, with results in about three days.
    • CVS -1.1% today.
    • 30-year fixed-rate mortgage averages 3.28% for the week ending May 14, up slightly from 3.26% in the previous week and down from 4.07% at this time a year ago, according to the Freddie Mac Primary Mortgage Market Survey.
    • "Although purchase applications reached a new low in mid-April, today purchase demand is only down 10% from one year ago," said Freddie Chief Economist Sam Khater. "While demand is improving, inventory is low and declining with no signs of a turnaround yet."
    • 15-year FRM averages 2.72% vs. 2.73% in the previous week and 3.53% a year ago.
    • 5-year Treasury-linked hybrid adjustable rate mortgage averages 3.18% vs. 3.17% in the prior week and 3.66% a year ago.
    • The low mortgage rates aren't helping homebuilders any in early trading today; (ITB -3.2%), YTD, iShares U.S. Home Construction ETF is down 21% vs. a 13% decline for the S&P 500.
    • Mortgage REITs are also hurting, (REM -3.8%); iShares Mortgage Real Estate Capped ETF drops 56% YTD.
    • Remember that talk of a pilot shortage last year? Delta Air Lines (DAL -7.9%) now expects to have 7K more pilots than it will need this fall due to a collapse in demand during the pandemic.
    • "I recognize that is an alarming number so it’s important to know that our intent is to align staffing for what we need over the long term," reads a memo from a Delta operations exec seen by Reuters.
    • Looking further ahead, Delta expects to have between 2.5K and 3.5K more pilots more than needed in Q3 of 2021, even accounting for mandatory retirement age pilot exits between now and next summer.
    • Previously: Delta retires 777s with cash burn at $50M a day (May 14)
    • Grubhub (GRUB -8.6%) and Uber (UBER -3.8%) are both down sharply after CNBC's David Faber reports that merger talks could end in the coming days if a deal isn't struck.
    • The sticking point appears to be the number of Uber shares Grubhub shareholders would receive in the deal, with Uber reluctant to move off a ratio of 1.9 to 1.0. Grubhub proposed 2.15 to 1.0 earlier in the week.
    • Just ahead of the grilling season, Tyson Foods (NYSE:TSN) is cutting beef prices it charges to supply grocery stores and the foodservice industry by as much as 20% to 30%.
    • The company has been in the spotlight because beef prices in grocery stores are higher even as cattle prices have fallen in the U.S. with some plants closed due to COVID-19 outbreaks. Consumer stockpiling has also impacted the availability of certain products adding supply pressure.
    • "We're doing this because we want to help keep beef on family tables," says Tyson CEO Noel White on the pricing decision. For Tyson, the lower prices could hurt margins if COVID-19 costs remain elevated.
    • Most analysts expect the beef supply in the U.S. to remain lower than normal for the balance of the year, but for the market to normalize.
    • Shares of Tyson are down 1.35% premarket and are off 36% YTD.
    • In an investor update, Cheesecake Factory (NASDAQ:CAKE) says it has amended its credit line to provide for certain covenant relief through the Q1 of 2021.
    • The company says it has increased liquidity through cost-savings measures and a convertible equity offering. The cash balance as of April 30 was $260M.
    • The base case assumption is that Cheesecake Factory will operate with capacity restrictions for some time as social distancing protocols stay in place.
    • Shares of Cheesecake Factory are down 5.31% premarket.
    • SEC Form 8-K
    • Average household credit-card spending fell by 40% Y/Y by the end of March as COVID-19 lockdowns took effect in most of the U.S., according to a report by the JPMorgan Chase (NYSE:JPM) Institute.
    • The report analyzed data from Chase credit cards through April 11, 2020, using a sample of 8M families across all 50 states.
    • Initially, credit-card spending on essentials spiked 20% before falling to pre-pandemic levels; spending on non-essentials sank by 50% and accounted for almost all of the total spending decline, the report said.
    • Average weekly credit card spending per household was more than $300 lower in April 2020 than in April 2019.
    • The drop in spending closely tracked the pattern of initial job losses, the report said.
    • It also found that spending dropped substantially for households across the entire income distribution, with slightly larger drops for higher-income households.
    • Appearing on CNBC this morning, Verizon (NYSE:VZ) CEO Hans Vestburg says 2.5% of the company's customers (about 800K) are unable to pay their bills.
    • In other news, he says Verizon boosted capital spending at the beginning of the pandemic panic in order to raise network capacity. It's a good moment, he says, to accelerate the build-out of 5G.
    • Shares are down a hair in premarket action.
    • With a 6.3% decline yesterday, Wells Fargo (NYSE:WFC) capped a two-week 25% plunge to its weakest level since the early days of the recovery from the global financial crisis.
    • Shares are down another 2% in premarket action this morning, shrugging off a wild rumor from last night.
    • That was courtesy of Charlie Gasparino, who talked about high-level banker speculation of a Wells Fargo/Goldman Sachs (NYSE:GS) merger to create a commercial/investment bank to compete with the likes of JPMorgan.
    • Both Wells CEO Charlie Scharf and Goldman chief David Solomon need a deal, says Gasparino.
    • Even if the two were so inclined, the regulatory hurdles – Wells' consent order and total market share of deposits, to name two – make such a move highly unlikely.
    • Building on reports from Bloomberg, Reuters says Airbus (OTCPK:EADSY) is weighing restructuring plans involving the possibility of "deep" job cuts, though a decision won't likely be made before the summer.
    • CEO Guillaume Faury is expected to update managers on details today after warning staff last month that the firm's survival was at stake due to a slump in demand from COVID-19.
    • Norwegian Cruise Line Holding (NYSE:NCLH) reports net yield fell 12.3% during Q1 on capacity that was down 12.6% as concerns over the pandemic increased.
    • CEO update: "In recent weeks, we have taken decisive action to significantly strengthen our financial position in response to the COVID-19 global pandemic, including our highly successful and oversubscribed $2.4B gross simultaneous quad-tranche capital raise announced last week. We believe this capital raise, coupled with other ongoing liquidity-enhancing initiatives, makes us well-positioned to weather an unlikely scenario of over 18 months of suspended voyages."
    • Norwegian says it had $1.8B of advance ticket sales at the end of the quarter, including ~$800M for previously announced voyage cancellations where guests have the option of either a future cruise credit or a cash refund. The cruise line operator says there continues to be demand for cruises, particularly beginning in Q4 and accelerating through 2021. NCLH's overall booked position and pricing for 2021 falls within historical ranges.
    • NCLH -3.01% premarket to $10.00.
    • Previously: Norwegian Cruise Line Holdings EPS misses by $0.50, revenue in-line (May 14)
    • Total sales for 3M (NYSE:MMM) in April declined 11% Y/Y to $2.3B. Organic local currency sales declined 12%, while acquisitions, net of divestitures, increased sales by 3%.
    • The company withdrew its full-year 2020 outlook on April 28, due to the uncertain impact of the COVID-19 pandemic, and committed to provide monthly updates until it is better able to forecast future performance.
    • "April sales results were largely in line with month-to-date trends we discussed during our first quarter earnings call," said CEO Mike Roman.

  41. I wouldn't believe anything Musk says, Tangled.

    The fast-food company is asking restaurant owners to make dozens of changes to ease concerns before reopening their dining rooms, including cleaning bathrooms every half-hour and digital kiosks after each order.164

    Dr. Rick Bright told a House subcommittee that the administration was too slow to prepare for the pandemic or warn Americans of its severity. Senator Richard M. Burr stepped aside as the Intelligence Committee chairman during an F.B.I. review of his stock sales amid the outbreak.

    RIGHT NOW

    Dr. Rick Bright told a House subcommittee that he believed that “by not telling America the truth or being totally transparent,” the Trump administration had failed to prepare the public.

     

    Millions of children could die of preventable diseases as health services are overtaxed.

     

    Job losses have hit poor Americans the hardest, the Fed says.

     

    Meat plant closures mean pigs are being gassed or shot.

     

    Jersey Shore will open, with limits, by Memorial Day Weekend.

     

    100 children in N.Y.C. have a rare illness tied to the virus.

    Progressive and conservative lawmakers are increasingly pushing for the government to guarantee workers’ incomes, signaling how profoundly the economic debate has shifted during the pandemic.


  42. Phil – all fiat currency is failing. Comparing one to another (id est the Euro versus the US dollar) is like inspecting paint chips on the Titanic. 

    Fiat currency is failing faster nowdue to COVID because the global disease accelerates the two fundamental problems to fiat in a changing world:

    1) globalization: fiat is inherently a single nation-state construct. A collection of individual nation-state currencies is ess efficient than modern currencies constructed in borderless, social paradigms (groups of ondividuals) as opposed to government paradigms (individuals represented by a government existing within an imaginary border).

    2) the KNowledge Ecnomy: fiat currency was founded and applied to match the needs of a manufaxcturing economy, where money supply is created by capital loans for factories/industry and mortgages for the surrounding real estate. The manufacturing economy is inhrenetly fixed-location and represented well by governments that represent individuals and produce fabricate the system of trust ("currency") used to transact within a fixed-location economy.

    In the manufacturing economy governments can impose capital controls, "levers and pulleys" if you will, that tug this way and that on things like interest rates, inflation, borrowing/spending ratios and the like. As the Knowledge Economy takes over these deprecated controls become less effective because they only work in the manufacturing economy by design. We're seeing this literally all over the place with negative interest rates, 0% inflation despite massive money printing, and ZIRP/QE policies that have less effect the more that they are used. 


  43. Snow-wish I understood all that but will take your word for it as good news. Thx. 


  44. FWIW- I have been searching high and low for hand sanitizer wipes to no avail. However Today I found the local GNC store selling wipes masks and gloves. 


  45. from reddit:

    "Wonder how people would react if you could Go back to 2011 and tell people that in 9 years you would be able to buy 60,000 shares of JC Penney with a single bitcoin."

    truth


  46. snow – I posed that in the afternoon, said it was call buying time!







  47. Germany’s New Coronavirus Thinking


  48. Tensions rise as Texas governor readies to lift more rules