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Monday Morning Markets – More Stimulus as We Wait for the Fed

Kentucky can't escape Louise Linton's Instagram clutches | Jeffrey ...More free money!!!

The Senate Republicans are expected to vote on the CARES Act 2 (it's a 5-act play) and this will be the beginning of two weeks of negotiations with the House, who already voted on a much more extensive measure to prop up the economy.  The $600 weekly unemployment benefit will expire on Friday and most economists predict a complete disaster if that's not extended to 30M unemployed Americans.   "We're not going to pay people more money to stay at home than work," US Treasury Secretary Steven Mnuchin said Thursday on CNBC using the poor grammer of a person who's never worked a day in his life and has sold his soul to Satan.

Steve Mnuchin | Our America 2Mnuchin (who's father was a general partner at Goldman Sachs and spit out the silver spoon he was born with - demanding a platinum spoon on his way to Yale and a job with, you guessed it, Goldman Sach after which he took part in the total destruction of Sears, where they looted the pension and cost millions of workers their jobs while getting rich of the real estate they sold out from under the investors' noses) says 70% of minimum wage should be the cap for those lazy bastards who aren't risking their lives to go back to their closed businesses.  

Really people, just tell Daddy you need another job and stop bothering the Government, who you've paid unemployment insurance to for your entire life, to actually pay you when you are unemployed!  What do you think this is – Europe?  At least we're all getting a second $1,200 stimulus check so the rents will probably be paid in August.  It remains to be seen if the moratorium on evictions is extended.  If not, expect total chaos in the housing markets and the courts since 1/3 of Americans have not paid their rents in the past few months.   

While the House plan included $1Tn in aid to state and local Governments, the Senate plan has none.   With so many areas shut down, tax revenues have gone down sharply and this funding was meant to help deal with that shortfall so expect this to be a major point of contention in the weeks ahead.  Senator McConnell has said he wants to see a five-year liability shield for businesses, non-profits, schools, medical providers and professionals dating back to the start of the year. This would protect them from “frivolous” lawsuits arising from the pandemic.  

President Trump had repeatedly called for a payroll tax cut and in a recent interview with Chris Wallace on “Fox News Sunday,” he said that he may not sign a stimulus bill if it doesn’t include a payroll tax cut – that's a looming economic disaster.  Speaking of disasters, we have Consumer Confidence tomorrow morning along with Dallas Fed (today), Richmond Fed (tomorrow), Investor Confidence (Wednesday), GDP (Thursday) and PMI Friday – a busy week.

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A very busy week!  

 


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  1. Good Morning.


  2. RDHL, Pharm are you familiar with this stock supposidely large pipeline and some Covid stuff they are into? Thanks


  3. Good morning! 

    Nas is popping again but it's Monday so ignore.  Oil really falling apart:

    Honey badger don't care.

    That's odd.

    Below 94 on the Dollar, of course other things are popping – we buy them in Dollars!

    Donald Trump As Nero - Toons Mag


  4. Phil/aapl/GS

    Good morning.

    i don't know about anyone else, but I will maintain that GS took aapl down from 390 to 360 so they could load up.

    Question is: how do we prove they/their client were buying?


  5. Headline in WSJ makes it seem like vaccine is days away:

    The pivotal trial will evaluate, in 30,000 subjects across the U.S., whether two doses prevents symptomatic Covid-19.

    Here's what the smartest people in the World are doing:

    The tech giant will keep its employees home until at least next July, people familiar with the matter said, making the search-engine giant the first major U.S. corporation to formalize such an extended timetable.

    Securities regulators have warned Under Armour, its founder Kevin Plank and its chief financial officer that they could face civil-enforcement action related to the sportswear maker’s past accounting practices.

    The metal zoomed to a record for the first time in nine years as a weakening dollar injected new momentum into a rally driven by uncertainty about the world economy.

    People selling the news on NAK – lots of profits to be cashed out.  

    The other option is that the news release clearly highlighted that the Pebble Project is nowhere near complete, with CEO Ron Thiessen stating specifically that, "There is more work to be done." Investors may well have decided that the uncertainty here isn't worth the risk anymore after such a large price gain. Northern Dynasty Minerals' next steps are material, too. For starters, there are additional government hurdles to clear, notably at the state level. And, perhaps the biggest issue of all, is that the company will have to find a partner (or partners) to help it through the final project evaluation, design, and permitting stages of the project. Basically, the Pebble Project is still many years away from producing any copper or gold.   

    Meanwhile, expect the company's share price volatility to continue, especially given that (for now, anyway) the only way for it to raise money would be to tap the capital markets. And every time it sells more stock, as it did earlier in the year, current shareholders get diluted a bit further. Only more aggressive types who are willing to closely track their investments should be looking at Northern Dynasty Minerals stock today. 

    Or people who already took 1/2 off the table several times!  

    After days of disagreements between the White House and GOP lawmakers, Republicans are set to release their proposal for the next coronavirus relief bill on Monday, with millions of Americans on the verge of losing expanded unemployment benefits.30

    Few Manhattan Office Workers Have Returned Despite New York’s Reopening

    Federal Reserve officials meet Tuesday and Wednesday, facing growing doubts about the prospect for a sustained economic rebound due to the nation’s uneven public-health response to the coronavirus.137

    In Houston, where booming Covid-19 cases have pushed many hospitals beyond their intensive-care unit capacity for the first time, doctors have been sounding alarms for weeks. Harris County Judge Lina Hidalgo, the Democratic elected executive of the county which includes the nation’s fourth-largest city, has been pushing to again implement stay-home orders there. Face coverings, which Republican Gov. Greg Abbottmade mandatory this month, remain a lightning rod of controversy.

    The divide over policies to combat Covid-19 has only deepened in a state where politicians have been at war for months. The governor, who has seen his approval ratings tumble, has struggled to form a consistent public-health response to the crisis as he is buffeted from both right and left. Democrats want tougher restrictions, while many Republicans fear he has already gone too far, leaving him bouncing between policies and yet having appeased no one.

    Four months ago, employees at many U.S. companies went home and did something incredible: They got their work done, seemingly without missing a beat. Executives were amazed at how well their workers performed remotely, even while juggling child care and the distractions of home. Twitter Inc. TWTR -1.25% and Facebook Inc., among others, quickly said they would embrace remote work long term. Some companies even vowed to give up their physical office spaces entirely.

    Now, as the work-from-home experiment stretches on, some cracks are starting to emerge. Projects take longer. Training is tougher. Hiring and integrating new employees, more complicated. Some employers say their workers appear less connected and bosses fear that younger professionals aren’t developing at the same rate as they would in offices, sitting next to colleagues and absorbing how they do their jobs.

    Months into a pandemic that rapidly reshaped how companies operate, an increasing number of executives now say that remote work, while necessary for safety much of this year, is not their preferred long-term solution once the coronavirus crisis passes.

    Biden Tax Plan Targets Profitable Companies Paying Almost Nothing

    Ha!  Who says my articles don't get the ball rolling?


  6. BAC- I see Buffet has upped his stake. I don't see BAC in any of the portfolios but what is your take on them? 



  7. Phil / QCOM
    Thoughts on QCOM and any earnings play on them?
     


  8. Need some help on the following…

    Long 2 GLD Sept 170 calls @ 4.95 currently 13.50

    Been selling one weekly call against the position to lower my cost basis down to 4.25 but always kept one uncovered – but now it has flown up to 182 in the past few days

    So I am short 1 GLD 172 weekly call (expires Friday) at 1.00 now all the way at 10.25 ($925 loss)

    What is the best way to roll/adjust this?


  9. jeffl,

    You made up on the long call more than 8.55 so I would roll the short 172 to Sep 185 for 5.00. you still up about 3.55, your cost 10.25 less the 5$ for the Sept caller plus, I take it you got 1$ for the short 172 caller.



  10. AAPL/Maya – Good luck proving anything.  As Cramer once said/admitted, this is how hedge funds operate – they cause chaos and profit from it.  

    BAC/Pstas – Well at $24 they are $210Bn and made $27Bn last year but, going forward, most like $14Bn this year and $18Bn in 2021 so P/E more like 15x so good but not great price for a bank and certainly not great with looming uncertainties.  Remember in the last crisis, banks fell 80% and BAC is not even down 40% at $24 so I wouldn't go gung-ho bullish but you can sell the 2022 $20 puts for $2.30 to net $17.70, that's pretty reasonable to start and if you pair that with just 1x the 2022 $23 ($4.40)/$28 ($2.40) bull call spread for $2, you are in for a net 0.30 credit so $19.70 is your worst-case entry on 1x and then, let's say they are at $8 and you could sell 2x the $10 puts for $2(+) and then you're net would be ($13.70 + $10 + $10)/3 = $11.23 so, if you don't REALLY want to own 3x BAC at $11.23, don't sell the $20 puts for $2.30, right?

    WBA/Batman – Still crazy cheap.

    QCOM/Jij – The only "earnings plays" I like at the moment is buying things that get stupidly cheap, like INTC last week.  I'm not betting on earnings.  QCOM is right at $100Bn in market cap at $91.25 and they'll make just over $4Bn this year so 25x is no bargain but not so expensive either so it all depends on guidance going forward.  

    INTC at $50, by the way is $210Bn and they make $20Bn a year – see why I have a preference?

    GLD/Jeff – It's not a "loss" you simply capped your gains.  Selling weeklies is foolish, you know that already so I won't lecture you as it's pretty obvious why, given your current situation.  So the $172 call is $9.90 and the Sept $186 calls are $4.60 so you do a 2x roll there and you'll get $16 back on the longs if all goes well.  Yodi's being more conservative, probably smart.  


  11. Oil bouncing back off $40.50.



  12. Wealthy donors pour millions into fight over mail-in voting


  13. White House, Senate GOP try again on $1 trillion virus aid


  14.  

     

     

     

    Intel’s Fabs Aren’t Going Anywhere 

    Chip maker’s latest stumble opens the door to more outsourcing, but advantages of being a manufacturer remain

     

    https://www.wsj.com/articles/intels-fabs-arent-going-anywhere-11595862957?mod=lead_feature_below_a_pos1


  15. INTC, large positions that were hoping to bail around 52ish are getting out.


  16. Yodi and Phil

     

    Thanks for the GLD advice…  


  17. I did add some more stock on T cheap today. You can set up as well a BCS Jan 22 28/33 and sell 1/2 28 Jan 22 puts. I sell some shorter calls Oct 20, 31call for try .70 just to make some possible profits on stock and or caller.


  18. Against my long positions on MSFT and INTC trying to sell Sept 210 caller for 6.30 and 57.7 caller respectable, for .50 just to make up some extra cash.


  19. Against my long MU stock selling Sept. 4th 33 caller for 1.50 to 1.52


  20. Phil

    Would you roll 2021 WHR 130 short calls out to 2022 here? Or hedge with a bull call spread

    thanks 


  21. Against MCD selling Aug 21 205 caller for 3.70


  22. Phil/TSLA

    I figured you might be one person that may know.

    how do I find out if tsla is being considered by the S&P for addition to the index?

    would there be some 'cyber noise' somewhere? Where is best place to go digging?

    any ideas are welcome




  23. Opinion: Covid-19 will permanently change the world’s economy



  24. INTC/Batman – Yeah, no kidding.  I love how people write off these massive companies over one little foul-up.  

    You're welcome Jeff.

    T/Yodi – Great for the long-term.

    WHR/Coulter – Would I massively short WHR?  No?  Do you mean puts?  Having seen them drop to $65 recently, I don't think I'd be so brave, frankly.  I liked WHR BECAUSE it got cheap – now it's not cheap at all.  

    TSLA/Maya – You never know on the S&P until they announce it.  It's supposed to be a secret.  Rumors will fly, of course.


  25. WBA/Phil – I was thinking of buying some WBA today. I looked at the prices for 2022 calls and decided not to buy anything, but I have a question. The bid/ask spreads for the out of the money calls are small, like $0.30 or $0.40, but the bid/ask spreads for the in the money calls are much larger, like $2.50 or $3.00.  Can you explain to me what that means? What is going on there? Thanks.


  26. INTC –

    Intel announces organizational changes for Technology, Systems Architecture and Client Group Today, Intel CEO Bob Swan announced changes to the company''s technology organization and executive team to accelerate product leadership and improve focus and accountability in process technology execution. Effective immediately, the Technology, Systems Architecture and Client Group (TSCG) will be separated into the following teams, whose leaders will report directly to the CEO:Technology Development, led by Dr. Ann Kelleher; Manufacturing and Operations, led by Keyvan Esfarjani; Design Engineering, led in the interim by Josh Walden while Intel conducts an accelerated global search to identify a permanent leader; Architecture, Software and Graphics, which will continue to be led by Raja Koduri; and Supply Chain, which will continue to be led by Dr. Randhir Thakur.Ms. Kelleher will now lead Intel technology development focusing on 7nm and 5nm processes. Dr. Mike Mayberry, who has been leading
     Technology Development, will consult and assist in the transition until his planned retirement at the end of the year.   As a result of these changes, Murthy Renduchintala will leave Intel on August 3.  

    Trade:
    https://us.etrade.com/e/t/applogic/orderform?traxui=SA&Symbol=INTC
    —————————————-


  27. Phil

    WHR

    I have the 65 puts but I also sold some 2021 130 calls and I was wondering if I should roll those out to 2022 160s or something similar 


  28. /INTC – interesting. Jim Keller left two weeks ago, now a huge shake-up, and Renduchintala getting bounced out.


  29. Under reporting of Covid cases has begun

    Confirmed U.S. coronavirus cases rose by 55,000, the lowest daily gain since July 7.

    Confirmed U.S. coronavirus cases rose by 55,000, the lowest daily gain since July 7. Some states continued to struggle with rising numbers of infections and fatalities. The nation’s death toll approached 147,000 today. Globally, Covid-19 infections pushed past 16 million over the weekend, with more than one million new cases added to the tally in the past four days, according to data compiled by Johns Hopkins University.


  30. batman, shame on trump