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Toppy Tuesday – Here Come Those Tears Again at S&P 3,000

"Baby here we stand again

Where we've been so many times before

Even though you looked so sure

As I was watching you walking out my door

But you always walk back in like you did today

Acting like you never even went away

Well I don't know if I can

Open up and let you in baby

Here come those tears


Here come those tears again" – Jackson Browne

Trump says there's a vaccine?  

Seriously, that's why we're rallying?  How many times does Donald Trump have to lie to us before we stop believing him?  We WANT to believe there's a vaccine, we WANT to believe that a Hydroxycloroquine a day will keep corona away but we KNOW (at least most of us do) that that is bat-shit crazy – yet that's what Trump was promoting yesterday – along with his miracle vaccine.

“My concern would be that the public not hear comments about the use of hydroxychloroquine and believe that taking this drug to prevent Covid-19 infection is without hazards. In fact, there are serious hazards,” said Dr. Steven E. Nissen, the chief academic officer of the Miller Family Heart, Vascular & Thoracic Institute at the Cleveland Clinic.

Dr. Scott Solomon, a professor of medicine at Harvard Medical School, said Mr. Trump’s decision to try the drug was up to him and his physician. “But what is irresponsible is the example he is setting,” Dr. Solomon said.

Dave Brown on Twitter: "Tomorrow's @Independent cartoon... #Trump ...Mr. Trump publicly embraced hydroxychloroquine as a “game changer” in the fight against the virus in March, and his endorsement, amplified by Fox News hosts like Laura Ingraham and Sean Hannity, caused a run on the drug, making it scarce for those who took it for lupus and rheumatoid arthritis, for which it is regularly prescribed.  But on Monday night, Dr. Manny Alvarez, the senior managing editor for Fox News’s health news, said on air that the president’s statement was “highly irresponsible” and asked what had changed since studies showed the drug had no benefits.

This is just madness folks!  I would joke that I came home last night and while I was drinking my Clorox after my Lysol injection I started wondering if they make hydroxychloroquine in chewables yet but I am told up to 1/3 of my audience might take that seriously because – WTF???  I mean really, has our education system gone that far off the rails that even people who are smart enough to have accumulated enough money to be able to invest in the markets are still taken in by this complete nonsense?  While I don't really believe that – I can't risk the joke….

The F.D.A. has warned hydroxychloroquine can cause serious heart problems for coronavirus patients. And this is going on right after Dr. Rick Bright's testimonies to Congress about how he was removed from his role heading up the Federal development of coronavirus vaccines because he wouldn't direct funds to hydroxychloroquine, which he called "One of several potentially dangerous drugs promoted by those with political connections.”

Last night the President not only promoted the drug but also said he was taking it. And he made it clear that his decision was based on trusting anecdotal evidence, and his own gut, over the warnings of the government, or any data.  “I take it because I think I hear very good things,” Trump said, citing a letter he received from an unnamed doctor in Westchester, N.Y., promoting the use of hydroxychloroquine.

Neil Cavuto, a rogue Fox Host, reacted to the President’s announcement with a grim warning that once might have shocked his network’s viewers. To anyone with pre-existing conditions, he said: “It will kill you. I cannot stress enough. This will kill you.”

monty python holy grail photo: coconuts picasioncom_aebc733bb8c29d5754463b63e0babbc1.gif holy grail GIFWTF people?  Is this really what we've come to?  We can't agree on basic science and facts anymore?  America is hurling back to the Dark Ages at an alarming pace!  All this is, however, a marvelous distraction from America's 1,500,000th virus infection as we are officially at 1,508,957 infected Americans this morning – 5 TIMES MORE than the next leading country, which is now Russia (144M people) at 290,678 but, like the US, Russia doesn't have adequate testing so we have no idea what the real numbers are in either country.

We're also rapidly approaching our 100,000th death at 90,369 as of this morning, so we'll certainly hit 100,000 by the end of the month – probably by the weekend and Monday is, appropriately, Memorial Day – a good time to reflect on the fact that in 20 years of Vietnam, "only" 58,318 Americans died - we've blown through that total in less than 3 months and it's rising with 20,000 new cases each day and the President has declared victory and the stock market is acting like it believes him.  Do you?

 Neville Chamberlain at Heston Airport on his return from Munich after meeting with Hitler, September 1938.I'm sure the stock markets rallied when Neville Chamberlain came back from his meeting with Hitler and declared "Peace in our Time" in 1938 – we fought that war for another 7 years, mostly because acting as though we had won lost the allies their opportunity to press their advantage at the time.  Pretending we have vaccines or cures and re-opening the cities too soon is the same thing – it's declaring victory while your enemy is still gathering forces and waiting to strike you again…

The US has, along with the UK and Italy, an inadequate amount of hospital beds for it's population in a health crisis so more so than other countries, we can't afford to make a mistake and I do think we're making one now.  As I noted yesterday, my daughter drove down to see me and, since it was raining and I saw the restaurant down my block was empty, I decided eating dinner out for the first time in 3 months would be nice.  

On the whole, it was fine, there was only one other occupied table 20 feet away from us and we were eating outside under an awning but, unlike delivery service, we came into contact with two waiters and a busboy (all with masks) and the hostess on the way in – all closer than 6 feet.  I'm pretty sure another guy laid out the plates before we sat down and maybe another guy did the water glasses and then there are the dishwasers in the kitchen and, as my gilrs got up to go to the bathroom (as girls are wont to do), I took note of the fact that they brushed past 8 tables each way that, had the restaurant been occupied, would have put them in close proximity to 16-32 more people – all in one meal!  

And what about people going to the bathroom past my table?!?  You have to think strategically when you go out to eat now…  How is opening up NOT going to lead to a rise in infections – it makes no sense to believe that!  So, once again, the market is getting ahead of itself, celebrating "Peace in out time" long before the real war has even started.

Be careful out there!  

 


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  1. Good Morning.


  2. I do worry that someone at some point (given the nosebleed levels of crazy we now work with) will say that when comparing with the CoVid death toll with Vietnam you need to take account of inflation so the numbers are actually not so bad. 


  3. Coronavirus Disease (COVID-19) – Statistics and Research



  4. Coronavirus latest: Walmart sees ‘unprecedented demand’ for essentials as sales surge


  5. Short-Term Portfolio (STP) Review (again):  Well you have to do these things often in such a dynamic market.  Our last set of changes was in last Tuesday's morning post and, at the time, we were just about where we are now and the STP was at $534,245 (up 434%) and our changes were  cashing in our SDS June calls and adding a Jan $20/30 bull call spread – that was good because an up move would have hurt the long calls more than the spread.   Our other change was to buy back SQQQ short Jan $35 calls and then we forgot to sell new ones on the dip.

    Still, we're in good shape as the LTP shot up $75,000 as of yesterday's close to $674,240 (up 35%) while the STP is at $547,695 (up 447%) so we are now at a new record high for the paired portfolios at $1,221,935.  And that's up 100% since October – I'm almost inclined to just cash it all in!

    In lieu of cashing out, we have a job to do and that's add to our hedges.  We made more money (unrealized) so we add more hedges to lock it in and we underspent last week so this week I think I want to go closer to $40,000 – half our gains as I REALLY want to make it difficult for us to go below a combined $1M.

    • CANE – Just added and off to a good start.
    • AAPL – Not worried at all.
    • JPM – Not worried at all.  In fact, I can't believe these puts are still $3.50.
    • SDS – We're going to increase the upside by buying back the short June $28 calls at 0.40 as that's only $4,000 and we can always sell more.  Since we're at $20, our 200 Jan $20 longs, now $4.55 with an 0.66 Delta, should more than double at $30, which would be a 20% drop in the S&P.  That's a solid $100,000 we can count on there.

    • CMG – Let's sell 2 July $1,050 calls for $44 ($8,800) and put a stop on the 2 short June $950 calls, now $78 at $85 ($17,000) so either we make money on both or it's a pre-roll (and we'd make money on the short puts).  The $940s are $85 so we have about $10 of leeway at $1,000.  Let's also roll the 4 2022 $850 puts at $140 to the $900 puts at $160.  Any time we can buy $50 for $20 – it's worth considering!

    • SQQQ – I see I skipped the first spread but now we'll deal with the whole thing.  We have 200 2022 $10 calls at the money, uncovered.  SQQQ is a 3x but even a 20% drop in the Nas only gets us to $16 on SQQQ and the calls are now $4.30 so they go up $2 more ($40,000)?  See, sometimes hedges break down on you and aren't doing what you thought they were.
    • There's very little money in the June $13/25 spread and $25 is almost certainly out of reach so let's take the money on the June $13s off the table and leave the naked short June $25 calls to expire worthless.
    • We'll roll our 200 2022 $10 calls at $4.30 to 200 Jan (21) $5 ($6.50)/15 ($2.30) bull call spreads at $4.20 for about even and we'll roll our 15 short Jan $20 puts at $12.20 ($18,300) to 40 short Jan $10 puts at $3.40 ($13,600).  

    • We can also add 50 TQQQ Jan $80 ($20)/55 ($9.60) bear put spreads at $10.40 ($52,000) which provides $125,000 of protection if we head back to the lows.  We can sell 20 June $75 puts for $5.70 ($11,400) to offset the cost as well.  

    • TSLA – Right on track.
    • UNG – On track and still good for a new trade at net $2,070 on a $15,000 potential at $15.

    • USO – Doing very nicely now.  I'm not willing to risk this month's upcoming expirations as we just make $16,788 in less than a month and it will take 18 months to make the rest so let's cash out and re-bet AFTER we see what happens this week (May contracts expire on Friday).  

    I'd say we have a solid $300,000 in downside protection but I'd rather have $500,000 so we'll have to consider adding more hedges than this during the week but, for now, let's see how this looks.

    Meanwhile, the paperwork is done for our new Income-Producing Hedge Fund.  The idea was that people are not getting good income in their retirement accounts and won't be for some time to come so we can start a fund, more like the Butterfly Portfolio than the LTP/STP, which can return 2%/quarter to the investors as a steady draw with the rest being re-invested like a normal fund.  By planning it that way, we should be able to manage it accordingly, scheduling our collections for each quarterly period.  

    Even if I already spoke to you and ESPECIALLY if I haven't, please contact Greg at Philstockworld dot com with Name, Address, Phone Number and Amount you wish to invest so we can make sure you have everything you need to get going by June 1st.

    Also, Capital Ideas, our more aggressive Fund, will be accepting new investments as well.   

    It's going to be a very exciting 2nd half of the year!  


  6. Powell not inspiring the markets very much this morning.


  7. 2,950 is a good shorting line on /ES with tight stops above.

    9,400 on /NQ too.

    Dollar might be bouncing, putting pressure on indexes.



  8. Phil/ futures

    Good Morning!

    you are a little brave to venture into restaurants!

    my second foray at /ES 2955 and /NQ at 9400

    Of course, stops placed ! Hope to make a little dinar if possible. The market continues its sprint upwards and. Shorting has not worked, even at all kinds of technicals so far


  9. Good Morning Phil:

    Still new here and adding positions when you articulate "…good for a new trade too…" so thanks for that.  I have not yet put on hedges and this is now a priority for me.  Question:  Would a good start be adding the 2021 20/40 SDS Bull Call spread at current pricing?  Am I right to say that approximately $2.90 net will buy me $20 protection?  Thanks.


  10. Phil/stops

    i am curious how you do your stops in futures contracts.

    where should my stops be for the two trades?


  11. "2,950 is a good shorting line on /ES with tight stops above."

    Define tight stops please?


  12. Big Chart – Looking good, 3,000 is key on /ES.  

    Restaurants/Maya – Like I said, it was raining so people weren't out and it was great to eat out again but I was just as uncomfortable there as I was at the grocery store – so I don't think it will be a habit again for a while.  I think Mnuchin is spinning everything Powell says in this strange testimony so it's keeping the animal spirits up for the moment.  

    SDS/Hicket – Realistically it's more like +$6 (still 200%) as SDS is a 2x ETF so if the S&P drops 20%, then SDS goes up 40% to $28 so you'd be $8 in the money with some premium vs your $9 entry.  It's good that a 40% drop would pay more but it's not smart to expect more than a 20% move and certainly not before you'll have time to adjust.

    Stops/Maya – Well that's why we like to enter on strong support lines – the stops should be closely after those breaks.  The more I think I can win (realistically) the wider I make my stops but, for a quick bet – I try not to lose more than $100, so 2,952 is my stop on /ES but as soon as it's over 2,950 I bail and wait to catch a move below before getting in again.

    Tight/Tangled – As above.  As a rule of thumb, I'm looking to make $500 on a quick resistance trade so I try not to lose more than $100 and preferably $50 so I can be right 1 out of 10 times and still make money.  

    Resistance is Futile (if < 1 ohm) | EEWeb Community

    Fortunately, while I've been writing this, I did not stop out on /ES as it peeked over 2,952 and now both that and /NQ are working (now that the BS session with Powell and Mnuchin is over).  That's another factor – I was listening and they didn't say anything that made me change my mind – so I got a bit looser with my stops as my conviction grew.  You always have to use your head – not blindly make up rules.  


  13. everything looks kind of toppy –  Several data points in Georgia and Florida point to officials lying about the positive new CV cases and death rates.  It will take at least end of month before we see an uptick in new cases  and then another 2  for death uptick week and i''m sure texas will start lying abut the numbers there as well…  ….  Only thing that could impact this in the short run is if hospitals get overrun and they all seem to have lots of capacity.  Maybe we do get over 3000 in the next month.    Unless of course Trump does some thing stupid which is very likely….  Oh and of course a new 3Trillion or so in infusion into the market…. 


  14. This is all some huge monetary and health experiment being conducted by the Oligarchs. 

    Will be interesting to see how it all works out…

    Parts of the U.S. are further easing lockdowns this week and the World Health Organization will hold its annual health assembly online, as drugmakers race to develop a vaccine for the new coronavirus.26

    The Wall Street Journal visited three malls Saturday in Ohio, Texas and Georgia. Dozens of shoppers said they were eager to leave their homes and get a taste of normalcy. Many retail workers said they felt anxious.25

    Treasury Secretary Steven Mnuchin also said he was prepared take more risks to expedite Fed programs that are part of the pandemic response. Fed chief Jerome Powell told a Senate panel the response has been massive, but it is unclear if it has been enough.53

    Many House Democrats, seeing a slow return to normal and a protracted economic downturn, contend that it is crucial to get money out again. Many Republicans, however, predict a rapid economic recovery and say aid should shift to incentives to work.


  15. CMG at 1020. ETHE at 110 (NAV $18). This market is more irrational than the length of a diagonal through a square. Somebody is going to time a big crush just right and make a whole bunch. Won't be me, but it will be somebody.


    • The Senate Committee on Banking, Housing, and Urban Affairs gets underway.
    • Treasury Secretary Steven Mnuchin outlines the lending facilities the Treasury and the Fed established to keep credit flowing.
    • "In Q2, we are continuing to see large number of unemployment and negative indicators," Mnuchin said, adding, "We are optimistic about the progress being made by vaccines and therapies" for COVID-19.
    • Says the administration is committed to reopening the economy in a safe way and sees the U.S. economy emerging "stronger than ever."
    • Fed Chairman Jerome Powell follows with his prepared remarks, which were released late yesterday, saying the central bank will use its full range of tools to cushion the blow of the economic damage done by the pandemic.
    • Update at 10:24 AM: The Fed has been gradually expanding potential scope of borrowers for its lending facilities, Powell said. Specifically, he said it's looking at ways to accommodate more municipal borrowers.
    • 10:28 AM: Mnuchin said he's "absolutely willing" to take risk and losses on capital the Treasury contributes to the lending facilities.
    • 10:30 AM: The Fed may need to do more, and the Congress may need to do more as well, Powell said, pointing to risk of long-term damage to the economy.
    • 10:37 AM: The Fed's lending facilities under the CARES Act, including the Main Street lending facility, should be "stood up and ready to go at the end of this month," Powell said. It's possible it may go into the first couple of days of June before they're fully running.
    • 10:48 AM: Mnuchin said the average loan size under the Paycheck Protection Program has come down in the second tranche of the program.
    • He also said he's open to reserving money for CDFIs (community development financial institutions) to make sure  underserved communities get funds.
    • 10:53 AM: The Fed will take a look at senators' proposal to help municipalities, Powell said.
    • 10:59 AM: Regarding buying commercial mortgage securities, Powell assured the senators that the Fed's Term-Asset-Backed Securities Loan facility is only buying triple-A-rated securities and "with a significant haircut."
    • 11:03 AM: Both Powell and Mnuchin said they would answer any questions they would receive from an inspector general.
    • 11:07 AM: The amount of money that's gone out into the economy from the lending facilities so far is "fairly modest," Powell said, who noted that the big lending facilities are just starting to come online now. So the bulk of the funds coming into the economy is "ahead of us."
    • 11:17 AM: Powell acknowledges that Congress enacted the "biggest response ever, and the fastest," adding that the question "looms in the air — Is it enough?"
    • 11:24 AM: On funding the CARES Act, Mnuchin said he expects to expand financing in 10-, 20-, and 30-year bonds to lock in very low interest rates for an extended period of time. There "just wasn't enough demand" to warrant issuing 50-year and 100-year Treasury bonds, he said.
    • 11:30 AM: Unemployment will get worse before it gets better, and June will be very difficult, Mnuchin said.
    • 11:33 AM: The growth of the Fed's balance sheet "isn't something that raises financial stability or inflation concerns," Powell said.

    • General Motors (GM +3.1%) says it's right in the battle to develop an electric vehicle battery that lasts one million miles.
    • GM Executive Vice President Doug Parks notes multiple teams at the automaker are working on advances like zero-cobalt electrodes, solid state electrolytes and ultra-fast charging as they look to take EV batteries from an average lifetime of 100K to 200K lifetime up to a million miles. Parks even says GM is "almost there" on the breakthrough.
    • Tesla is also reportedly looking to hit the 1M mile mark with battery technology.
    • Results from an NIH study assessing the "lifetime" of small speech droplets containing SARS-CoV-2 viral particles expelled by talking asymptomatic COVID-19 carriers showed that they can remain in the air for 8-14 minutes in a closed stagnant-air environment lending credence to the view that airborne transmission is more widespread than previously believed (coughing and sneezing are the traditional culprits for transmitting the respiratory illness).
    • Loud talkers apparently represent the largest risk since loud speech can emit thousands of oral fluid droplets per second.
    • The velocity and length of time droplets stay in the air also depend on the volume of the talker, their age and how dry their mouth is.
    • Public transport and rooms with poor ventilation represent high-risk environments for this type of transmission.
    • Researchers in China found that droplets can travel as far as 13 feet, more than double current social distancing guidelines.
    • Hertz Global (HTZ +0.5%) asked key lenders to its European division to sign a waiver this week that will allow the company to avoid a bankruptcy filing, according to New York Post.
    • A source indicates that Hertz is likely to have only asked for the waiver because it planned a bankruptcy for the larger U.S. division.
    • The company's European division is reported to be stronger financially than the U.S. division.
    • Delta Air Lines (DAL +1.6%) reiterates at a Wolfe Research conference that it has recently experienced a modest improvement in passenger demand, bookings, and trip cancellations,
    • For May, Delta estimates operating revenue will fall 85% to 90%, capacity will decrease in the range of 60% to 70%, and load factor will fall in a range of 25% to 30%.
    • On the balance sheet, Delta sees having more than $12B at the end of June. As expected, Delta intends to offer voluntary and early retirement plans.
    • Delta presentation webcast
    • Meryl Witmer significantly boosted her stake in Berkshire Hathaway (BRK.ABRK.B) yesterday, picking up $2.2M worth of Class A and Class B shares.
    • In addition to serving on Berkshire's board, Witmer is a longtime fund manager, currently in charge of Eagle Capital Partners.
    • Jim Bianco earlier noted Berkshire's performance relative to the S&P 500 is at an 18-year low, i.e. Berkshire's stock has lagged the return on the S&P since 2001.
    • Silver prices continue to surge (XAGUSD:CUR) and have rebounded ~50% from a low hit in March; July Comex silver +2.3% to $17.86/oz.
    • Silver typically lags behind gold and tends to be more volatile, in part because roughly half of global demand comes from industrial uses, which can make silver prices more sensitive to the world economy, but silver's industrial uses have provided a short-term boost recently with investors piling into wagers on a long-term economic recovery as businesses reopen.
    • At the same time, safe-haven demand remains steady, and ultralow interest rates are making precious metals more attractive to yield-seeking investors looking for assets other than bonds.
    • Note: Yesterday, Silver miners surge as metal hits highest since February
    • A Papua New Guinea court will rule early next month on whether Barrick Gold (GOLD +3.4%) can proceed with a legal challenge over the government's refusal to extend its lease on the Porgera gold mine, the head of the country's mining regulator says.
    • The PNG government said last month it would take control of the mine, citing environmental and social problems, and Barrick, which operates the mine in a joint venture with China' Zijin Mining, suspended operations and launched a court challenge to the decision.
    • It is not clear if a refusal to allow the challenge to go ahead would exhaust Barrick's legal avenues.
    • Home Depot (HD -1.7%) is down slightly on what could be some profit-taking action after the home improvement retailer was bid up 60% from the March bottom.
    • Checking in on the conference call, CNBC's Courtney Reagan reports management as seeing "significant acceleration to double-digit comp sales growth" in the last three weeks of April and into the first two weeks of FQ2.
    • Seemingly all good news, although Bank of America is warning that some portion of Home Depot's FQ1 and FQ2 sales are being pulled forward from FQ3 and FQ4. The firm sticks with a Neutral rating as it sees the near-term momentum already priced in and macro pressure building in the back half. BofA's price target on the home improvement retailer is $250.
    • Previously: Home Depot EPS misses by $0.18, beats on revenue (May 19)
    • Previously: Home Depot tops FQ1 comp sale estimates (May 19)
    • Natural gas (NG1:COM) continues to climb higher, with June futures up ~$0.05 to $1.833/MMBtu on Nymex, after EQT's (EQT +1.4%) move to shut wells helped send U.S. production to the lowest levels since summer 2018.
    • Preliminary dry gas production estimated for Tuesday was ~83B cf/day, the least since August 2018, according to Bloomberg.
    • Gas prices are also lifted by optimism about a demand recovery as states start to reopen after coronavirus lockdowns.
    • “"he longer we go with reopenings not showing dire consequences, that is going to add more and more momentum that we are returning to normal," says Gene McGillian, manager of market research at Tradition Energy.
    • Warmer weather patterns are encouraging but will need to hold further into June to signal increased power plant demand, McGillian adds.

  16. New Amazon center in Delaware and Bezos gains another $2B.   Let's see:  he has his own space launch capability, rules over an evil empire, owns a robotic dog…   he is basically a Bond villain.


  17. Bezos/Tangled – Well him and Musk are preparing to get off this planet.  

    • JP Morgan CEO Jamie Dimon, in a memo ahead of the bank's annual meeting, says the pandemic is a "wake-up call" for businesses and the Government to invest in the common good, the FT reported.
    • He made a call for investment to fight the costs of health care, boost access to education, remove regulatory hurdles for smaller businesses, fix infrastructure and address immigration policy. 
    • Stocks that frequently respond to infrastructure policy include Jacobs Engineering (NYSE:J), Vulcan Materials (NYSE:VMC), Martin Marietta Materials (NYSE:MLM), Fluor (NYSE:FLR), KBR Inc. (NYSE:KBR), among others.
    • The tone largely echoes his comments late last year at the Business Roundtable, when he said, “the American dream is alive, but fraying.”
    • Dimon noted that the pandemic "laid bare" how so many people were "living on the edge."
    • Solutions should be "nonpartisan," he added, saying the crisis has created an opportunity to fix these issues. 
    • Newmont (NYSE:NEM) says it expects FY 2020 attributable gold production of ~6M oz., near the lower end of previous guidance, at all-in sustaining costs of $1,015/oz., near the upper range of its previous cost outlook.
    • The revised outlook includes production and cost impacts from five operations temporarily placed into care and maintenance for an average of 45 days.
    • Newmont says it expects Q2 to be the lowest production and highest cost quarter of the year, as the sites ramp up from care and maintenance.
    • Newmont says its long-term guidance remains unchanged, with stable production of more than 6M oz. and improving costs from 2021 through 2024.
    • NEM +0.9% pre-market.
    • SunTrust Robinson Humphrey raises its price target on Peloton Interactive (NASDAQ:PTON) to $60 from $52.
    • "We remain constructive as PTON continues to be a net beneficiary of greater adoption of in-home fitness, caused by the pandemic," updates analyst Youssef Squali.
    • Squali sees PTON's guidance and Street estimates for connected subscribers as too low.
    • Subscriber breakdown: "Our logic is that if in the first 40 days of the quarter there were ~114K net adds while order times stretched out beyond Peloton's delivery capabilities and have only grown, the run-rate for the quarter would imply a steady pace of delivery or ~259k net adds through the quarter. This would bring the total to 1.145M blowing past the management guidance of 1.04-1.05 subs for the quarter. However, given some uncertainty around churn, rate of delivery, and customer willingness to wait for lengthened order delivery times we are setting our expectations for quarterly net adds in F4Q20 at ~214k, or an additional ~100K net adds in the last 50 days of the quarter, putting the quarterly total at 1.1M."
    • SunTrust's new price target of $60 is for FY21 and derived off a 10-year DCF and implies a EV/Revenue multiple of 5.8X.
    • Shares of Peloton are up 2.68% premarket to $44.78.
    • Comcast (NASDAQ:CMCSA) is 1.1% lower in premarket action following a downgrade to Neutral at Guggenheim, from Buy.
    • There's a slow recovery ahead with "depressed" growth and profitability as the media-exposed elements of Comcast are "likely to experience virus headwinds for a while," Mike McCormack writes.
    • Even if parks and theaters reopen, there's likely to be a lingering effect from a change in consumer preferences, he says. "If the virus-caused economic downturn results in further unemployment, we posit that theme park and movie theater visits will decline as people have less disposable income.”
    • He's pulled his price target.
    • Overall, Street analysts are Bullish on the shares, as are Seeking Alpha authors. The stock has a Quant Rating of Very Bullish.

    Spirit Airlines (NYSE:SAVE+6% on upbeat TSA travelers data.

    United Airlines Holdings (NASDAQ:UAL+6% on upbeat TSA travelers data.

    Aurora Cannabis (NYSE:ACB+7%.

    Baidu (NASDAQ:BIDU+11% on Q1 results.

    • Luckin Coffee (NASDAQ:LK) discloses that it received a Nasdaq delisting notice.
    • The exchange cited public interest concerns as raised by the fabricated transactions disclosed by the company and the past failure to publicly disclose material information.
    • Luckin plans to request a hearing before a Nasdaq panel on the delisting. For the meantime, Luckin is still on the Nasdaq but in a perma-trading halt.
    • What to watch: Recent reports out of China indicate that Luckin is pivoting with its business model, which could be a positive for Starbucks (NASDAQ:SBUX) if there is no consumer backlash against U.S. companies amid some heightened tension. Even without any backlash, SBUX faces some macro headwinds in China.
    • Source: Press Release
    • Walt Disney (NYSE:DIS) is down 1.2% premarket alongside a downgrade at Loop Capital – which among other issues is processing the coming departure of Disney's streaming chief Kevin Mayer for TikTok.
    • That Mayer move just adds to uncertainty and general concern that Disney will take longer to bounce back from the pandemic than estimated, analyst Alan Gould writes, downgrading to Hold from Buy.
    • "The earlier a vaccine is available the sooner the parks, stadiums and theaters will open, but the economy will likely have a multi-year impact on park attendance and COVID-19 has accelerated the negative trends in the traditional media business,” he says.
    • Where should potential Disney investors be looking instead? Those looking for a streaming play might prefer Netflix (NASDAQ:NFLX), he suggests, while those on the advertising/messaging play might be better off with Facebook (NASDAQ:FB).
    • Beyond Meat (NASDAQ:BYND) is up 1.75% after BTIG launched coverage with a Buy rating and set a price target just off the Street high.
    • "We expect consumers to gravitate toward plant-based protein options as they seek to support companies and brands that make a difference, not just a product. While we recognize the hurdles the company faces to become a ubiquitous brand, including increasing manufacturing capacity and driving frequency at quick-service restaurants," notes analyst Peter Saleh.
    • Saleh thinks BYND partnerships with restaurant operators including Starbucks, Dunkin' and potentially McDonald's will quickly elevate the brand to a national scale and provide a flywheel impact for sales in the grocery channel.
    • What about competition from heavyweights like Nestle and Kellogg? "While we recognize the threat from such large, well-capitalized companies, we believe their investment will help increase awareness and grow the category to the benefit of Beyond Meat in the near-term. Longer-term, we believe Beyond Meat will have to fight for shelf space in the grocery aisle, while the quick service restaurant fight will come down to manufacturing scale and price," explains Saleh.
    • BTIG's price target of $173 is based on applying a 150X EV/EBITDA multiple off the 2021 adjusted EBITDA estimate of $74.7M.
    • Darden Restaurants (NYSE:DRI) says for FQ4 through May 17 it has seen same-restaurant sales decline 47.9%. The Olive Garden chain saw a 39.4% drop during the period.
    • As of May 17, Darden had 49% of its dining rooms open in limited capacity, and expects to have more than 65% of dining rooms open with limited capacity by the end of May.
    • Darden's ongoing weekly cash burn rate has improved to less than $10M including capital expenditures.
    • DRI +0.72% premarket to $76.00.
    • Source: Press Release
    • Square (NYSE:SQ) advances 6.0% after market analytics firm Yipitdata says "SQ's Cash App monetized total payment volume growth continues to exhibit strength — currently trending at above pre-COVID levels."
    • Bounces back from a 4.5% drop on Monday after BofA analyst Jason Kupferberg turned to bear from bull on the stock, noting worries over Square's exposure to small- and medium-sized businesses.
    • "Now is the time for both monetary and fiscal policy to act boldly to minimize the economic pain from the pandemic," says Boston Fed chief Eric Rosengren.
    • He sees the unemployment rate topping out at about 20%, and to still be in double-digits at the end of the year.
    • State bureaucracies may be loosening the reins on their lockdown rules, but that doesn't necessarily mean it's full speed ahead for the economy, he adds.
    • Turning to one of the Fed's new facilities, Rosengren says the Main Street lending program is currently hiring companies via competitive bids to move the project along.
    • Fannie Mae (OTCQB:FNMA +6.0%) and Freddie Mac (OTCQB:FMCC +6.8%) issue temporary guidance on the eligibility of borrowers who are in forbearance, or have recently ended their forbearance, to refinance or buy a new home.
    • The guidance allows borrowers to refinance or buy a new home if they are current on their mortgage (i.e., in forbearance but continued to make their mortgage payments or reinstated their mortgage).
    • They're also eligible to refinance or buy a new home three months after their forbearance ends and they have made three consecutive payments under their repayment plan, or payment deferral option or loan modification.
    • "Homeowners who are in COVID-19 forbearance but continue to make their mortgage payment will not be penalized," said Director Mark Calabria. "Today's action allows homeowners to access record low mortgage rates and keeps the mortgage market functioning as efficiently as possible."
    • The FHFA is also extending Fannie and Freddie's previously announced ability to purchase single-family mortgages in forbearance. The GSEs are now able to buy forborne loans, with note dates on or before June 30, 2020, as long as they are delivered to the enterprises by Aug. 31, 2020 and where only one mortgage payment has been missed.
    • The previous policy was set to expire on May 21, 2020.
    • Nano Dimension has continued to rally, up more than 333% after earlier reporting a breakthrough with HENSOLDT that may allow the production of electronic components.
    • HENSOLDT said it assembled the first 10-layer printed circuit board (NASDAQ:PCB) that carries high-performance electronic structures soldered to both outer sides. 

    • Shares of 3D printing name Voxeljet (NYSE:VJET) surged today, perhaps in sympathy, up more than 60% at one point, putting it on track to have its best day in years. Larger 3D printing names like Stratasys Ltd. (NASDAQ:SSYS) and 3D Systems Corp. (NYSE:DDD) are largely unchanged. 

    • HENSOLDT CEO, Thomas Müller said, “To have high-density components quickly available with reduced effort by means of 3D printing gives us a competitive edge in the development process of such high-end electronic systems.”

    • Facebook (NASDAQ:FB) is up 3.1% to a session high as it introduces Shops, a measure to make it easier for companies to list products on Facebook and Instagram.
    • For years, people have used Facebook apps for basic for-sale operations, the company says – and now small businesses (many of them in Facebook's user base) are struggling in the pandemic.
    • Facebook Shops is a free way for businesses to set up with a custom look and feel, and enable checkout either via the business' own website or without leaving the Facebook app.
    • Shoppers can message the business through WhatsApp, Facebook Messenger or Instagram Direct. The company also plans in time to enable shopping directly from those chat mechanisms.
    • The summer in the U.S. will bring Instagram Shop, a one-stop area to purchase products users find in Instagram Explore.
    • And soon, sellers, brands and creators will be able to tag products before broadcasting live, enabling purchase from the bottom of their video.
    • Updated 1:27 p.m.: Etsy (NASDAQ:ETSY) is heading down, now -0.8% and moving back in the direction of morning lows.
    • Updated 1:46 p.m.: After a bit of volatile trading, Shopify (SHOP +2.4%) is at session highs; it's part of Facebook's program. "We’re also working more closely with partners like Shopify, BigCommerce, WooCommerce, ChannelAdvisor (NYSE:ECOM), CedCommerce, Cafe24, Tienda Nube and Feedonomics to give small businesses the support they need," Facebook says.

  18. Musk, Bezos and Branson: Who Will Dominate Space Tourism?


  19. EU with another $550Bn stimulus.

    Markets can't go down without another free money announcement. 


  20. I think FL (Foot Locker) is worth a toss before we miss all the Retailers.  At $28, they are at $3Bn and if they are making  $400M – that's a p/e of 8 and we have wriggle room:

    Year End 1st Feb 2015 2016 2017 2018 2019 2020 2021E 2022E CAGR / Avg
    Total Revenue
    $m

    7,151 7,412 7,766 7,782 7,939 8,005 7,517 7,906 2.28%
    Operating Profit
    $m

    814 841 1,006 571 699 649     -4.43%
    Net Profit
    $m

    520 541 664 284 541 491 413 472 -1.14%
    EPS Reported
    $

    3.56 3.84 4.91 2.99 4.42 4.52     4.88%
    EPS Normalised
    $

    3.59 4.32 4.94 4.09 4.62 4.96 3.74 4.59 6.67%
    EPS Growth
    %

    +24.6 +20.5 +14.3 -17.3 +12.9 +7.34 -24.5 +22.6  
    PE Ratio
    x

              5.45 7.21 5.88  
    PEG
     

                0.319 0.536  
     

    For the LTP: 

    • Sell 10 FL 2022 $25 puts for $7.50 ($7,500) 
    • Buy 30 FL 2022 $25 calls for $9.40 ($28,200) 
    • Sell 30 FL 2022 $37.50 calls for $5.40 ($16,200) 

    That's net $4,500 on the $37,500 spread so that's 733% upside potential in 18 months if FL can get back to $37.50.  Ordinary margin on the $25 puts is just $1,539 so it's a very efficient play as well.  


  21. Everything kind of petered out at the end….  I sold some short callers on VIAC today…. nice pop off of the Arial Inv article….