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Non-Farm Friday – Back to Work Edition

COVID Small Business Resources in Chattanooga, TNWe're waiting on Payroll Data.

Last month, in the April Report, the US Economy lost 20.5M jobs and, though "experts" are expecting another loss of jobs – we re-opened much of America in the middle of May, so it's very possible we show a net gain for April as people got back to work.  Expectations for this report are for around 8.5M additional job losses but the Futures are antiipating a positive number and are already up 1%.

Keep in mind, of course, that's AFTER the Government created a $700Bn Paycheck Protection Program that handed out money to employers in exchange for not laying off their employees during the crisis.  Figure the average worker makes $5,000/month including wage deductions and that's 2 months so $700Bn/$10,000 = 70 MILLION JOBS that the Government paid to salvage – otherwise this could have been, by miles, the greatest loss of jobs in American history.

Maybe now you understand why the Republicans were suddenly cooperating with the Democrats and supporting that stimulus package.  It's very hard to be re-elected when 50% of the voters don't have jobs!

ImageThat's why this jobs report tells you nothing about the real health of the economy.  It's a fiction that's been concocted by the Government so the people are not generally aware of how hard-hitting this disaster has been.  Yesterday, they were already talking about another $1Tn of stimulus by the end of June – anything to keep Q2 GDP from being down more than 50% – which is the current forecast by the Atlanta Federal Reserve.

8:30 Update:  Wow, we did get a gain of 2.5M jobs – that's great and miles better than the low expectations set by leading Economorons.  That puts our Unemployment Rate at 13.3%, MUCH better than 20% expected though Average Hourly Earnings fell 1% and that's not good for the workers but GREAT FOR WALL STREET (isn't everything?).  

Doesn't matter why, the Futures are up like a rocket though, in keeping with the theme of the last two weeks – unemployment for Black people still rose 2% - which makes sense since we've already reported that very little of the PPP money made it into the hands of minority corporations, or anyone who wasn't in to the Top 1%.

So the rich got richer, again and the S&P is blasting over our 10% line (3,135) and we'll see if the Nasdaq can join it over 9,700 and the Dow should hit 27,000 (a good shorting line on /YM with tight stops above) and the Russell (/RTY) is lagging the rest at 1,520 and, if this is a real rally based on employment gains – then the Russell should make a very nice bullish bet here – either on the Futures (with tight stops below the 1,500 line, or using the Russell Ultra-Long ETF (TNA), which would blast 30% higher, to $40, if the Russell Index can move up 10% to 1,650.

You can play for a summer recovery by taking the TNA July $35 ($1.45)/40 (0.45) bull call spread for net $1 and that will pay $5 if the Russell beginst to get back to it's all-time high at 1,700.  

Have a great weekend, 

- Phil

 


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  1. As I said before – our luck in this crisis was that the GOP is the incumbent party so they had all the motivation they needed to forget about the obsession on deficit they showed during 8 years of Obama. The same people who voted to add $4T to our debt refused to add $800B in 2009… I am sure that President Joe Biden can expect the same level of cooperation in the next crisis!



  2. Waiting for the tweets talking about the best job number creation ever! 

     

  3. Good Morning!


  4. Phil any chance those jobs numbers get "revised" later on a late Friday afternoon?


  5. Phil,

    Good morning! My short BA 06/17/2022 175.00 C position of my 110/175 spread got assigned (and BA has shot up 20 points overnight). Would like to hear your thoughts on how to handle this scenario.


  6. Phil / WBA – from the Naked

    '22 $ 30 Call as Short July 42.5 stock now at 45 —-  any adjustments on this? or rolls – stock over 45 now, 


  7. Phil/job numbers

    I think the top order insiders had an idea of the job numbers and hence the market was moving up slowly all this week ….maybe they are already in and now the common sheep will take the top end of the price…

    regards


  8. Jobs – So I guess we had been improving well before the numbers were taken at the middle of the month…

    I need to check amazon for an updated '45' Bullshit'ometer, my old '43' version died this morning. :(


  9. Good morning!

    Cooperation/StJ – God willing that won't be an issue for Biden if we can take back the Senate.  Then I will suddenly be in favor of gerrymandering!

    Big Chart – This will put us over all the 200 dmas and bust the Dow to green, forcing poor StJ to put the boxes back to the old bullish levels.

    Tweets/StJ – Trump already scheduled 10am victory lap.  Of course, that will ring a little hollow with the 20M people still unemployed but when has he ever cared about the bottom 80%?

    Revised/Coulter – There's a note from the BLS that they have "miscounted" some jobs and it's more like 16.5% unemployment than 14% so a 3M job difference there would be negative instead of positive when they revise it but doesn't matter today as headlines rule.  Still glad we have our weekend hedges but we'll need to add more longs if things hold up next week or we're over-hedged. 

    BA/Jij – Well, the June $175 calls were $16.50 and the $110 calls are $75 so net $58.50 on the $65 spread was what you would have gotten cashing out the spread.  Instead they cancelled the short call, paid you $175 (causing you to be short BA) and BA is at $203.50 so it will cost you $28.50 to get out of the short and the $110s are $105 now so $105-$28.50 is net $76.50, which is more than the max you would have made on the spread so I'd say THANKS! and close it out.  

    You could get fancy and keep the $110s and sell the July $175s for $35 but you'd still have to buy the stock back at $203.50 so it's really the same as you net around $70 but you wait longer – so I'd just take the money and run.

    Jobs/Pat – As I noted above, this report cost the Government about $1.5Tn (there were 2 rounds of PPP, now that I think about it) but they seem like they want to do it again in June so I wouldn't be so quick to bet against them.  

    On the other hand, I'd be more concerned this pushes the Fed off the table.

    Numbers/1020 – The NFP is up to the very last day of May though it's estimated and has been wildly inaccurate in the past.  


  10. So, I guess that could mean that they use facts up to the 15th and guess the rest?


  11. Would the unemployment numbers be affected by all the people staying home so not looking for work?


  12. Futures market really annoying this morning in ES.  Lost money (just a smidgen) because market orders would not fill because so many orders ahead of mine.



  13. I'm kind of disappointed in myself for not seeing this myself.  Four people on my block went back to work starting several weeks ago.  No one else lost their job or got furloughed because that had happened almost right after the shutdown.  Isn't this just more people going back to work than getting laid off (most of the layoffs have already occurred)?  Shouldn't this number steadily get better in the next few months as we re-open?  Still horrible % overall but the markets generally only care about trends so BUY BUY BUY


  14. My parents just called screaming for me to buy stocks.


  15. kustomz

    Like jumping on a running train!!!!!


  16. Phil—where or who do i go to get info on the gloves—My brother at UPenn would like the infp—thanks


  17. July 35/40 TNA spread now

    1.71 /1.97


  18. SPX 3200 here we come!


  19. Phil,

    Curious, did PSWI fill those glove orders the other day? Thx


  20. Wow, if Trump were Moses he would be saying "God said 'I have 5 commandments.' but I said, 'No God, I want to give my people 10!'"   Apparently, if not for Trump, 10M people would have been unemployed today and millions would be dead from the virus – he saved us!

    LTP now up 90% at $949,975 – up $100,000 since yesterday (no changes).  I guess we'll take it.  Not too much damage to STP (will drop later as vol calms down), still $527,400 so crazy new total of $1,477,375 – that is INSANE!  Was $1,133,755 when we did our reviews 2 weeks ago.

    Even the Dividend Portfolio is back to green.

    Unemployment/Tangled – That's not happening, this is a very strong report unless the data is plain wrong.

    /ES/Tangled – I think it's a short squeeze now.  Thank goodness we are using spreads for our hedges!

    Net jobs/Jeffl – Yes, I should have thought more about that as well.  This is just a report of the net for May, doesn't change the 20M lost in April (other than getting 2.5M back).  Team Trump is just so good at resetting expectations that they can lose 17.5M jobs and then call a victory conference where Trump can compare himself to FDR (including saying he should get a 3rd and 4th term) based on a one-month bounce.

    Gloves/Savi – Contact me by Email but these are for bulk orders of millions of boxes – not individual.

    TNA/Coulter – I'd take a very large amount at that price.

    Gloves/Sun – Nope, we got sniped by a guy who paid $13/box (we were buying for $11.50).  Very disappointing – would have been a great commission but we have other deals in the works – that one just happened to be very urgent.  The glove and mask market has gone completely insane because both are like toilet paper – there's a steady monthly amount that meets the needs of hospitals and whoever and suddenly everyone wants to have a 3-6 month supply on hand so they are all bidding against each other and making the shortage so much worse.  


  21. /Phil/BA- I have BA 4 each, Long calls Jan 22 150 calls @43 and Short Jan 22 150 puts @61.

    Sold short term June 175 calls @2 and BA has jumped now. Any adjustments you can suggest? Thx


  22. So here's a sold too soon story: DIA Jun19 290 calls sold yesterday at 0.06, currently 0.38


  23. AAL with some serious follow through — almost grabbed weekly 18 calls yesterday at 0.50 but it didn't fill  (0.52 would have)!! They hit 5.62 this morning.

    Penny stock mania continues. Had another one-day win with XSPA


  24. /BIO/DIA

    Tempted to sell my DIA Jun19 290 calls now that it's at 0.44
     


  25. Phil--it is for UPenn hospital—sent him a note as to size—will let you know
     


  26. /BIO,JiJ wondering the same about my lotto ticket Jul DIA 300s I own at .03 that are .58 today


  27. JIJ123 – I would be too. If I still held my position (jealous!), I would do 50% today, probably near EOD when the DOW goes +1200 and see what next week brings. I still have 283 calls but only 10 of those, and I had 43 x 290 calls. 


  28. All – esoteric question – does anyone here know someone at SDOT (Seattle Dept of Trans). Trying to get them to respond to me.


  29. They should hold a deposit on masks and gloves, as they now already poluting oceans rivers and streets!!!!! Same as on bottles and alu cans.


  30. I suspect Freakonomics theory would teach us what's playing out with masks and gloves is more efficient than government dictating where these supplies go. 


  31. I hate to suggest it during the party here, but maybe a protective put position into the mega-riot weekend is in order. They're certainly cheap right now…


  32. Deposit/Yodi – they have those in farm products – I think they're called options.  ;)


  33. oh wait – like the old pop bottle deposits – NM, my misunderstanding


  34. Wait until we start trading fiat debt for carbon debt. Now that's going to be an interesting market time.


  35. We have 3Bn KN95 masks available in LA @ $3 - Minimum Order 50M.

    BA/Ravi – They are responsible for 1/3 of the Dow's gains this morning.  As to your spread, fortunately you are double covered.   The June $175 calls are now $44 and they can be rolled to Jan $200s at $47 and your 2022 $150s are $91.50 so a nice gain overall.  I'd take the money and run on 2 ($18,300) as you only paid net $16,800 for the spread ($4,600 including  the short puts) so that puts the money back in your pocket and still leaves you with a $10,000 2022 $150/2021 $200 spread and you can probably roll up another $50 (2022 $250s are $44) if they keep going higher.

    MoMos like TSLA and CMG not getting much love in this round.  

    AAL/BDC – They'll be back to filling those middle seats in no time.

    Thanks Savi.  

    Masks and gloves/Yodi – That's nothing, just wait until 3Bn additional people are wearing them every day.  I guess we should figure out what the materials are and invest in those companies too!

    MMM still flying:

    Efficiency/BDC – I don't agree.  It's like the toilet paper, if people didn't panic and stock up – it wouldn't be an issue but as soon as people start doing that, it becomes a cascading effect.  China's Central Planning kicks Capitalism's ass in that respect.  

    Puts/BDC – We rolled our hedges yesterday so I think we're good.

    I'm shorting /ES at 3,200 and out of /RTY longs at 1,525.

    Making Japan great again too:

    Oil almost back to $40!

    Look how WTIC/Brent tightened up – was $10 gap.  

    /RB up from 0.40 in March – that would have been a fun long to stick with!


  36. We have 3Bn KN95 masks available in LA @ $3 - Minimum Order 50M.

    Who besides the govt can handle that minimum?  No hospital that needs them has that kind of cash do they?


  37. daily COVID cases worldwide highest ever yesterday (130k). The market seems to be saying we've learned to live with this thing one way or another.


  38. Puts are too expensive so I just closed my DIA 283 calls as well at 1.07. Going neutral into the weekend. See what next week brings.


  39. "Sell in May and go away" has now become "Wait in May then come and play" ?


  40. Phil/BA- Thank you!


  41. Phil / WBA – from the Naked

    '22 $ 30 Call as Short July 42.5  —-  any adjustments on this? or rolls – stock over 46 now, ?


  42. Phil where is your stop for the ES short?


  43. Masks/Tangled – That's all this division of 3M does – major orders.  Government(s), Hospitals, Charities.   We just sent 1Bn to a single customer (not my deal, unfortunately).   Think about it, 4Bn people in developed World required to wear masks in addition to the usual customers.  That's a lot of demand!

    Live with it/BDC – Trump was just celebrating 100,000 dead in the US.  That's his "success" now.  

    You're welcome, Ravi.

    WBA/Batman – Well we already made adjustments in the recent review:

    May 15th, 2020 at 2:42 pm | (Unlocked) | Permalink 

    WBA – Before VIAC, I was sore from banging the table on WBA  and so far, so wrong on this one but now we can roll our 40 2022 $40 calls at $6.20 ($18,175) to 50 of the 2022 $30 calls at $10.60 ($53,000) buy back both sets of short calls ($9,520) and sell 25 July $42.50 calls for $1 ($2,500) as those expire before earnings.  That's going to cost us $41,845 and we started at $11,750 so we're in 50 of the 2022 $30 calls for $53,595 and that puts our break-even just over $40 but not if we sell 10 more 2022 $45 puts for $13.80 ($13,900) - then we're down to net $39,695 and now, at $45, we make more than $25,000 and $25,000 more for each $5 over that we move.

    I guess you are saying you stayed with 2022 $30 calls covered FULLY with July $42.50s?  I'm sorry you didn't believe me, perhaps I did not mention WBA enough?  wink

    We're half-covered so no official changes for us as we'll just do a 2x roll at some point and also we sold puts for $13,900 to balance the short calls.  If you have the fully covered bull spread and now short calls, I'd keep an eye on rolling the July $42.50s, now $4.60 to Aug $45s ar $3.50, which is net $1.10 and you can pay for that by selling 1/2x the 2022 $37.50 puts for $4.65 – which will pay for a few rolls and gives you a net $33(ish) entry no one can complain about.

    /ES/Tangled – At the moment it's 3,200.  On the downside, once I make $500 I want to lock in so anything below 3,190 drops my stop to that line and then each 10-point move after.


  44. Speaking of VIAC:


  45. How are the markets higher than before the pandemic when the death toll is x3 9/11s per week? Texas has more cases now than they did in April! Last time I looked the Loan Star state had an economy worth $1.8 trillion economy!!


  46. You have to be fucking kidding me.

    THERE. ARE. NO. WORDS.


  47. BDC… I did not click on the link but I am going to say … Trump… George Floyd. Am I warm?


  48. Phil / WBA. Thanks – I'm naked on the 50X 35 callers 

    I have the following 

    50X Jan 22  35 Call Naked.     25X Jul '20 42.5 short      20 short 'Jan 22 40 puts

    So I'll role the 42.5's to the 45 and sell more puts


  49. malsg lava hot baby


  50. Phil—-check your email


  51. MU / Phil – When we did the MU top trade, I wasn't able to get a fill that day on the short July $50 calls. Just thought about it this morning. Well I could sell those calls now for $6.25 instead of the $2-something in the original trade, so that wouldn't be bad relative to the orginal trade idea, but given current circumstances, would that be the correct thing to do?


  52. BDC—-I did click the link—--The no respect for him could not go lower


  53. MU – should maybe also mention that I was having a bad day that day apparently because I also sold the $50 Jan 22 put instead of the $40, so even without the call sale I missed, the trade was a credit. Do I need to fix that while I'm at it?


  54. Virus/Malsg – No longer matters, just another way people die in America.  

    No words/BDC – Well, I can think of a few….  

    WBA/Batman – If you are only 1/2 covered, I wouldn't do anything for now.  You have a 2x roll in your future but, for the moment, the short calls are protecting your gains.

    Thanks Savi. 

    MU/Dawg – Well, we were being conservative at the time.  It's normal as the calls go deeper into the money they lose premium.   When you get a really big pop like this, it's better to take advantage by selling a longer contract.    Did you mean the recent Butterfly Trade?

    Webinar Trade Idea on MU (from Batman) for the Butterfly Portfolio:

    • Sell 10 MU 2022 $40 puts for $8 ($8,000)
    • Buy 20 MU 2022 $40 calls for $14.75 ($29,500)
    • Sell 20 MU 2022 $55 calls for $8.25 ($16,500) 
    • Sell 10 MU July $50 calls for $2.20 ($2,200) 
    • Sell 10 MU July $42 puts for $2.10 ($2,100) 

    That's net $700 on the $30,000 spread that's $12,000 in the money to start and we're doing a 1/2 sale to generate income which, in the first 2 months out of 18, is a $4,300 return on our $700 investment.  The put sale is aggressive but only net $2,197 in margin and MU is a fantastic company to own for the long-term

    I'm very excited about this trade as the upside potential on the spread alone is $29,700 and if we sell 8 more sets of puts and calls, that's another potential $34,400 – that's a very nice return on a $700 outlay!  

    Nothing wrong with having sold the $50 puts – you just make more money!  Anyway, if you sold the July puts, you are in super-great shape but either way I'd target selling short Oct $52.50 calls for $7.40 as we're not expecting more than $60 from them and it's good money and good protection.  When the short July puts expire, you can sell the Oct $45 puts, now $2.65 to balance them and then you've sold net $10,000 to cover the next 4 months on a net $700 outlay AND you still have a bull call spread that's $30,000 in the money.  Not bad for our first month, right?  


  55. I think, from now on, we should all just hibernate between market corrections.  We are making more money in the last two months than we made in the prior year!  Why even bother playing the market when it's not 40% off?  


  56. Phil—my brother has sent you an introductory email


  57. Thanks Phil! Ya I like these butterfly trades. I admit they're kind of over my head at the moment, but I'm sure it will click at some point. In the meantime seeing fat triple digit profit percentages on TOS tells me something good must be happening.


  58. now it's the Jun19 190 puts that are 0.04

    hmmmm…


  59. DIA


  60. nibbled on the DIA jun19 220 puts at 0.11 – just a little hedgie wedgie into the weekend riots / pending COVID bump 


  61. To put some things in perpective:

    Many jobs this month might be the low hanging fruits (OK, maybe a bad metaphor today). But many jobs are not coming back soon – some businesses are BK already. But these latest numbers will be used to stop renewing the emergency unemployment benefits! Not going to help.


  62. Thank you Savi, I sent you guys back already. 

    Something good/Dawg – You can say that again but be careful, if the market turns back we may have to work for a living again…  frown

    DIA/BDC – I like that.   As I said above, this is a rally that was bought and paid for but this kind of success makes it far less likely Congress or the Fed will approve more stimulus.  The Fed does pay attention to the market and they know this is already irrational.

    Look – things are so good that companies are even becoming UNbankrupt!

    • PG&E (PCG +5.4%) is preparing an $11B debt financing package that may be sold to investors as soon as next week as it exits bankruptcy, Bloomberg reports.
    • The financing is said to include $4B of high-yield bonds, a $750M term loan led by JPMorgan Chase and an investment grade bond portion led by Bank of America, according to the report.
    • Bankers are targeting a timeline of next week for the debt offering, and PG&E is expected to market a $9B equity offering at a later date, according to the report.
    • The company has said in court papers that it expects to market the debt as soon as it gets confirmation of its plan, which could come as early as next week.
    • PG&E (PCG +5.3%) is resumed with a Buy rating at a $14 price target by Bank of America, which sees a "cleaner story" for the company after its reorganization and capital raise are completed.
    • BofA analyst Julien Dumoulin-Smith says the main debate around the stock is the "multiple in which PG&E's equity offering of $9B will be established."
    • "Under conservative assumptions, we calculate shares as offering compelling total return prospects with additional catalyst potential if the backstop agreement were amended to provide better terms," Dumoulin-Smith writes.
    • PCG's average Wall Street analyst rating and Seeking Alpha Authors' Rating are both Bullish, while its Quant Rating is Neutral.

    Hertz Global (NYSE:HTZ+80%.

    Gannett (NYSE:GCI+107%.

    Transocean (NYSE:RIG+45%.

    Luckin Coffee (NASDAQ:LK+40%.

    • American Airlines (NASDAQ:AAL), a day after its historic rally, is near the lows of the day, on likely profit-taking and a recent comment from Citron Research, questioning the airline's value.
    • "Back to $10 Robinhood traders have 0 idea what they buying. Balance sheet is upside down. Unencumbered assets worth far less than current price. The reason why Buffett fully exited lower. They don't teach finance in the Sherwood Forest.," Citron said in a tweet.
    • Shares of American have given up more of their gains than other airline peers in Friday's session, with perhaps the exception of Hawaiian Holdings (NASDAQ:HA).
    • Comscore (SCOR +7.0%) May 2020 data indicated an improvement in consumer interest across several travel categories thereby leading to a recovery in airline, hotel & vacation rental and online travel agent sites.
    • Comscore Media Metrix data showed travel sites visit in the five-week period between March 23 and April 26 were down ~70% compared to early February. However, average weekly visits in May for vacation rental and budget hotel site indices improved M/M by 40 points and 18 points, respectively. Major hotel chains collectively inched three points higher.
    • Time spent on airline sites exceeded 13 minutes per visitor, an increase from the week of Feb 3.
    • Terming the pandemic worst than 9/11 and 2008 recession combined, data from Comscore digital commerce measurement indicated overall desktop spending in the travel category in April down 77% Y/Y.
    • Press Release

    • With its benchmark target range already near zero and central bank officials averse to negative rates, Federal Reserve members meeting on June 9-10 will likely focus their discussion on asset purchases, how they'll implement forward guidance, and the potential use of yield caps.
    • But they're not likely to map out specifics when the Fed issues its policy statement on June 10. Due to the unusual circumstances of the pandemic, "It's going to take some time for us at the Fed to get a sense of what this economy, what the rebound potentially can look like," said Fed Vice Chair Richard Clarida in an online forum two weeks ago.
    • The central bank should have a better sense of the economy's trajectory by September, he said. (Since his comments, the May jobs report came in stronger than expected, though it's coming up from a very steep drop.)
    • That should make the quarterly economic and interest-rate projections that are due to be released at the June meeting of particular interest.
    • They're likely to tackle whether they need to adjust the pace and amount of Treasury and mortgage asset purchases. The central bank bought massive amounts of Treasury securities and mortgage-backed securities to calm roiled markets in March.
    • Lately, it's been steadily reducing the amount of Treasury securities it's purchasing — from $50B per day on average for the week ended April 9 to $4B per day on average for the week ending June 12.
    • How it will approach forward guidance may also be discussed — whether it will keep rates or asset purchases at specific levels for a defined period of time or tie its guidance to economic metrics, such as the unemployment rate.
    • Yield caps are "something we're going to need to discuss," Dallas Fed President Robert Kaplan told the Wall Street Journal in an interview.
    • The tool combines asset purchases and forward guidance in an effort to contain any unwanted jumps in Treasury yields resulting from an imminent surge in government debt issuance to finance virus-related economic relief.
    • Apparently, traders see a slight probability (7.9%) of the Fed raising rates to 0.25%-0.50% next week vs. the 0% probability they assigned to that outcome last week.
    • As debt markets stabilized, the Fed will reduce its Treasury securities purchases to ~$20B, or $4B per day on average, next week from the $22.5B, or $4.5B per day on average, that was scheduled for this week.

    • Indonesia's government will ask Freeport McMoRan (FCX +6.3%) to build a new copper smelter in Weda Bay, the senior minister overseeing mining says.
    • The government aims to build an integrated smelting hub in Weda Bay and wants to add a copper facility to the nickel hub in the North Maluku province.
    • Freeport Indonesia, the local unit which is now 51% controlled by the government, already is building a $3B smelter in East Java, part of its deal with the government to maintain its mining rights at the Grasberg mine until 2041.
    • Broadcom (NASDAQ:AVGO) is up 4.3% today, and has tagged its highest intraday point since January – jumping into today's market rally after its Q2 earnings came in mostly in line.
    • Valuation is running only a touch higher than its five-year averages: With next-12-month P/E at 13.7 vs. its average of 13.2, and EV/EBITDA at 12.2 vs. an average 10.9 … but with dividend yields higher these days (forward yield now at 4.2%).
    • The news resulted in a number of raised targets in Broadcom's mostly bullish analyst corner. JPMorgan raised its price target to $365 from $340, implying 13% upside. The firm notes the diversification of the business has gone well, and it liked free cash flow that came in ahead of its expectations – including appreciating the possibility that a strong Q4 could mean a December dividend increase. Overall, it notes infrastructure-focused companies will outperform in ongoing uncertainty.
    • And Piper Sandler raised its target to $360 from $300 and named Broadcom its top large-cap pick (on valuation dynamics, looking inexpensive vs. SOX). Data-center and storage markets are likely to stay strong, and the handset business should turn up in October, it says.
    • Evercore ISI, which rates Broadcom In Line, boosted its target to $315 from $290; it's been doubtful about the software pivot overall, and is concerned that leverage and the current dividend are constraining the ability to pursue aggressive M&A
    • U.S. active drilling rigs fall to another historic low, down 17 to 284, according to the latest weekly report from Baker Hughes.
    • U.S. oil rigs slid 16 to 206 for a 12th straight weekly decline, while gas rigs lost 1 to 76 and 2 rigs remain classified as miscellaneous.
    • Rigs targeting oil in the Permian Basin slipped by 7 to 141, and the count in the Eagle Ford fell by 9 to 12.
    • WTI July crude oil +4.9% to $39.24/bbl following today's surprise U.S. jobs data and anticipation for a coming OPEC+ meeting.
    • UBS lowers its 2020 gross gaming revenue forecast for Macau to -44% from a prior estimate of -31%.
    • "We are lowering gross gaming revenue estimates on slower visitor recovery in Macau, as we expect a partial resumption of the Individual Visit Scheme from June/July in Guangdong, later than our May expectation earlier. Guangdong, Macau,  and Hong Kong have discussed allowing cross-border travels with mutually recognized health-monitoring measures, so the potential convenience of that would be a positive for Macau gaming, though timing is unclear," updates analyst Robyn Farley.
    • Farley believes initial GGR recovery in Macau will be driven by pent-up gaming demand and limited international travel for Chinese tourists, given continuation of safety concerns and lack of vaccine against COVID-19.
    • On the positive side, Farley sees lower liquidity risk with Macau operators compared to a few months ago, given sufficient cash levels and undrawn borrowing capacity.
    • President Trump said he "wants blanket lockdowns to end" in a news conference held at the White House after the release of the better-than-expected May jobs report.
    • Says we'll "stomp out" any virus flare-up as they occur.
    • "We've made a big step in our comeback," Trump said.
    • He points out that the employment situation improved even though "very few" U.S. states are fully open.
    • At the end of the briefing, Trump signs legislation to adjust the Paycheck Protection Program to help restaurants, hotels, and other businesses that were hit hard by the COVID-19 pandemic.
    • Update at 11:22 AM ET: Trump says he still wants a payroll tax cut and will seek additional stimulus measures. "We'll be doing things for restaurants and various pieces of the entertainment industry" which may have "something to do with" tax incentives.
    • Briefing ends.
    • Preliminary results from an Oxford University-led study, RECOVERY, evaluating a range of medicines, including malaria drug hydroxychloroquine, in hospitalized COVID-19 patients failed to show a benefit from the malaria med compared to standard-of-care treatment.
    • Based on a review of results by the independent Data Monitoring Committee, hydroxychloroquine showed no incremental benefit in 28-day mortality, duration of hospital stay or other outcomes.
    • As a result, enrollment will be terminated in this treatment arm.
    • The disappointing results are the second blow this week to hopes that the malaria med could help during the pandemic considering the millions of doses available. A study just published in the New England Journal of Medicine showed no benefit in people at moderate-to-high risk of exposure.

    Tenet Healthcare (NYSE:THC+15%.

    • Papua New Guinea's mining regulator says it will bring criminal proceedings against a Barrick Gold (GOLD -4.9%) joint venture over what it says was an attempt to illegally export $13M in silver and gold to Australia.
    • PNG's Mineral Resources Authority says it received paperwork from the Barrick Niugini joint venture earlier this week seeking clearance to export silver and gold worth $13M to the Perth Mint, but the MRA says the JV is prohibited from processing or exporting gold following the government's refusal to extend its mining lease in April.
    • The JV between Barrick and China's Zijin Mining (OTCPK:ZIJMF) says it has always complied with its legal obligations regarding gold exports
    • Shopping center REIT CBL & Associates (NYSE:CBL) says its ability to continue to operate as a "going concern" for the next year is in "substantial doubt" after it skipped an interest payment because many of its tenants aren't paying rent.
    • Hired Weil, Gotshal & Manges and Moelis & Co. to assist in exploring alternatives to reduce overall leverage and interest expense and to extend the maturity of its debt.
    • The advisers recently started talks with advisers to certain holders of its notes and the credit committee of its senior secured credit facility.
    • CBL, which is now essentially a penny stock, rises 11% after falling 21% from May 29 to June 4.
    • CBL said most of its tenants requested rent relief. It has received ~27% of billed cash rents for April and estimates the collection rate for May at 25%-30%.
    • Expects that as many as eight JCPenney stores in its portfolio may close, comprising $2.1M of gross annual rent.
    • Earlier this week, CBL said it missed a $11.8M interest payment due on June 1
    • Bentley Sports (OTC:BESR) to cut 1,000 jobs in U.K. and has warned of more downsizing in future due to ongoing COVID-19 impact.
    • Bentley said the pandemic has derailed its growth plans and that "an urgent reduction in the workforce was unfortunately required." Union Unite said the announcement was "another heavy blow" for the automotive industry.
    • Source

  63. The bottom line is 5% of the people who lost their jobs in the last few months got their jobs back in May. At this place it will take two years to get back to full employment. I don’t think you can really call that a V-shaped recovery. 


  64. Where is the recovery outside the financial markets (and companies raising lots of capital with no risk premium)? Like you said the "jobs" were all printed and paid for.

    Meanwhile, there are protests everywhere and a guaranteed 2nd wave (if we ever actually conclude a 1st wave?).   

    Is the declining USD hinting at something? Or part of the reason for the risk on…


  65. Have a great weekend,

    - Phil


  66. Dollar weakness is a function of a our money printing versus the rest of the world. So far we are printing a lot more than everybody else. 



  67. CHK wow.

    Unemployment numbers were fake. Should be 16.3%, not 13.3%. Market may care Monday, might not.


  68. George Floyd doesn't like to look down at unemployment numbers that are 4's and 5's. He prefers 9's and 10's.


  69. AZ COVID cases up by 6.94%! That is HUGE. US over 25k new cases in one day. Most since 5/21.


  70. The Dow, S&P500, Nikkei and DAX all look like they are about to have a parabolic rocket launch straight up




  71. Mayor Frey seeks federal, state aid for Minneapolis, with early estimate showing at least $55M in damage