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Monday Market Momentum – Still Heading Higher

ImageUp and up we go!

Efforts are, of course, being made, to end the quarter on a good note but it's only June 7th, so three more weeks of this ahead.  We still have earnings trickling in but the bulk of them have been put to bed and, although GameStop (GME) will be interesting on Wednesday – there's nothing here that's likely to move the market very much.  

That leaves us with Data and there's not much of that this week either with Consumer Credit this afternoon (yawn), Small Business Optimism tomorrow, a 10-Year Note Auction on Wednesday (that might go badly), CPI Thursday and Consumer Sentiment Friday so, other than signs of inflation near the week's end – there's nothing likely to derail this market train, which is on a very bullish track at the moment.  

ImageOther than Donald Trump giving a crazy speech with his pants on backwards, it was a quiet weekend.  The former President claimed that Joe Biden wasn't half the man Trump was and no one who saw Trump lumbering onto the stage in North Carolina was going to argue that point.  Joe Biden later showed off by walking up and down stairs without assistance (we have a very, VERY low bar for Presidents these days) and speaking in what experts considered to be complete sentences.

Unfortunately, Biden is still talking to Republicans about Infrarstructure – despite Friday's deadline coming and going.  He's leaving for a foreign road trip on Wedndesday so this will likely be the last chance for Republicans to have a say but I'm surprised he's giving them more time  as there's been no progress on that side.

Half of Biden's Infrastructure Bill has already morphed into an Industrial Policy Bill that will promote US Manufacturing and that has the support of Republicans as it's being packaged as a way to compete with China – which they love to talk about.  Also, it's a fantastic way to shovel more money to the Top 1%, which is something else the Republicans love to do.

What is most striking about the legislation is the degree to which the projects that the bill funds closely parallel those in China’s “Made in China 2025” program, which funnels huge government spending into technologies where the country is seeking to be independent of outside suppliers. The Chinese government announced its initiative six years ago.  Senator John Cornyn, a Conservative Texas Republican who has been critical in the past of government funding of Industry, said of the semiconductor funding, “Frankly, I think China has left us no option but to make these investments.”

The G7 has backed a Global Minimum Tax Rate of 15%, which is more than the average US company pays (12%) and will hopefully stop all this nonsense of companies shuffling their books to keep earnings from being taxes.  Over the weekend, Janet Yellen once again called inflation "transitory" but what else can she do when Central Banks added $7Tn to their balance sheets last year and simply don't have any firepower left to fight with?  If inflation comes along, the central bank governor is in a pickle. Raise rates, and the government screams. Keep them low, and you prove that your independence (and credibility to fight inflation) has gone.

We'll see how the week progresses but we're off to a good start with the indexes looking green this morning, on a low-volume Monday.

 


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  1. Good Morning.


  2. Morning. NRG seems be catching a bid lately and I looked at the 2023 35 calls to cover my 25's .. the calls are literally 1/2 the price of Puts!!  Not sure if it's IB or the planet has a very negative view of this bounce. Saw this with INTC too. Maybe a new 'bottoming' indicator..lol 


  3. NRG bid/ ask spreads are leveling out now. Must have been early prices


  4. seriously, I'm trying to figure how to put trousers on backwards, and it's not computing. Maybe Big T really is a genius.


  5. Oops, so much for the strong open.  Russell having fun though.

       

    VIX is still running hot.

    If that's the new normal, options will be fund for a long time.

        

    Dollar holding 90

    NRG/Jeddah – Hopefully the bottom holds.


  6. Wasn't there someone here who was in to OPK? Frost is the Ceo. Remember something about this but there is a 20% short interest in this stock. Into diagnostic blood work for the big C? Anyways, there is another one CDNA which is a bio company also but they are working on the genetic matching for organ transplants. Has had one heck of a move up. Who was it that mentioned this opk? Will have to mention it to my grandson who is on the Reddit feed. They love this stuff.


  7. OPK/Pirate – They are interesting to play with all their ups and downs.  I know Albo liked to play them and they were in the LTP when they had that scandal (2018) but then we got out when they popped later that year and haven't gone back since.  They actually made $30M last year and expect to make $100M this year so – yay! – finally.  You're buying the whole thing for $2.4Bn at $3.70 so that's fine as they certainly have some upside potential.

    With any Biotech I try to just set up a good risk/reward trade like:

    • Sell 10 OPK 2023 $4 puts for $1.60 ($1,600)
    • Buy 20 OPK 2023 $3 calls for $1.80 ($3,600)
    • Sell 20 OPK 2023 $5 calls for $1.10 ($2,200) 

    That's a net $200 credit on the $4,000 spread so $4,200 (2,100%) upside potential at $5 and over $3.90 is a profit and under $4 you own 1,000 shares for net $3.80 (current price) as your worst case.  


  8. Phil// What are your thoughts on GDRX and CPNG?  Any trade suggestions on these?  Thanks.


  9. GOODRX/Rookie – $39.30 is $27.5Bn and the most they've made is $66M in 2019 on $388M in sales and they lost $294M last year – even though sales were $551 and this year $750M and next year $1Bn with a projected $200M profit is still 100x earnings 2 years from now.  I'm sure someone will tell you the prescription industry is a $1Tn industry or whatever but all these guys do is collect a small fee for saving you money on prescriptions – something Groupon could do if they thought it was worth the bother.  They've been doing it since 2015 and 50% annual growth is great but they are growing like that because they are small and even if they are 50% profitable, they aren't going to make $1Bn until 2026 – even if things go well and they are only 20% profitable – so 2036 is more likely to justify this market cap.  

    CPNG/Rookie -  I have no way to judge them.  No idea what a SoKo website does.  It's hard enough figuring out Bidu.  Same crap as above though – $75Bn market cap for a company that doesn't make money (and is 1/20th the size of AMZN).  Amazon took 20 years to make a profit – these guys have been trying for 10 years but SoKo only has 52M people and Coupang is not first to market by miles so you don't have the infinite(ish) growth model AMZN has to offset the risk of shoveling your money into a growing black hole.  In other words, not for me…


  10. Thanks Phil


  11. CPNG/rookie……as you probably already know, Coupang is one of several delivery companies in Korea, very busy, especially during the pandemic. However, I thought I'd heard something negative about them recently, and, sure enough, here it is – overwork, in a Korean company! I'm shocked, shocked – https://asia.nikkei.com/Business/Companies/Coupang-faces-scrutiny-over-driver-s-death-ahead-of-NY-listing


  12. Shocking, Snow!  

    • The U.S. Justice Department will hold a press conference regarding the ransomware attack on Colonial Pipeline.
    • The press conference starts at 3:15 PM ET and can be streamed here.
    • The U.S. government has come out with a strong response against the attack by ransomware-as-a-service group DarkSide.
    • Cybersecurity stocks that have previously moved on Colonial Pipeline-related news: FireEye (FEYE +4.4%), CrowdStrike (CRWD +4.3%), and CyberArk (CYBR +3.2%).
    • On last Friday alone, FBI Director Christopher Wray compared the national security response for ransomware attacks to 9/11, Deputy Attorney General Lisa Monaco called for more cooperation from cryptocurrency exchanges to fight such attacks, and the FBI called attack response a "top priority."
    • Meme stocks in the retail sector come off the weekend with momentum still working in their favor.
    • Arcimoto (NASDAQ:FUV) is up 16.77% on high volume.
    • Bed Bath & Beyond (NASDAQ:BBBY) is 6.55% higher and is more than 25% since June 1.
    • Naked Brand Group (NASDAQ:NAKD) is showing a 12.85% gain as the sub-$1 stock keeps up its volatile ways.
    • Lordstown Motors (NASDAQ:RIDE) is one of the leading gainers in the electric vehicle sector with a 7.50% jump. The EV stock has seen Reddit discussion move higher over the last three weeks.
    • Express (NYSE:EXPR) is 16.25% higher without any corporate news out.
    • Build-A-Bear Workshop (NYSE:BBW) has cooled off a bit, but is still showing a 3.55% gain in afternoon trading.
    • The number of stocks in the retail sector with A+ Seeking Alpha momentum grades continues to expand.
    • The two meme stocks drawing the most attention are also having a solid day. GameStop (NYSE:GME) is 9.85% higher and AMC Entertainment (NYSE:AMC) is up 14.95% even with the SEC keeping a watch on volatility.

     

     

    • Eli Lilly (LLY +13.2%) has gained more than tenth in value to record a 52-week high after Biogen (BIIB +41.9%) and its partner Eisai won FDA approval for Alzheimer's disease drug Aduhelm (aducanumab) today.
    • In January, Eli Lilly spiked on the announcement of favorable Phase 2 data for its Alzheimer's candidate donanemab from the TRAILBLAZER-ALZ study.
    • After the FDA extended the review period for aducanumab by three months in January, Morgan Stanley saw it as a positive sign for ‘Lilly’s Alzheimer's perception,’ noting that a lower bar in granting regulatory approval for aducanumab could mean a lower bar for donanemab as well.
    • A positive decision for Biogen’s Alzheimer's therapy “could signal probably more regulatory flexibility," said Bank of America analyst Geoff Meacham recently.
    • Facebook (FB +1.7%) has taken a swing at Apple (AAPL -0.6%) during the latter's Worldwide Developer Conference, saying that the company won't take revenue share from creators on its platform until 2023.
    • "To help more creators make a living on our platforms, we're going to keep paid online events, fan subscriptions, badges, and our upcoming independent news products free for creators until 2023," CEO Mark Zuckerberg says in a post on his platform.
    • "When we do introduce a rev share, it will be less than the 30% that Apple & others take," he says.
    • The company will start a payout interface made to show creators how different companies' fees and taxes affect earnings, he goes on to say.
    • During today's WWDC 2021, Apple (AAPL -0.7%) previewed iOS 15, which includes some new FaceTime capabilities.
    • FaceTime gains spatial audio and voice isolation to improve sound quality and reduce background sounds. Rival Zoom Video (ZM +1.8%) is moving higher after the announcement.
    • Users will be able to share music and videos during FaceTime calls and use the blurred backgrounds of Portrait mode.
    • The Wallet on iPhones will gain the ability to store a user's driver license.
    • AirPods Pro will be able to automatically dim music when someone speaks to the wearer. Dolby Atmos will be available for the wearables.
    • The company also announced iPad OS 15, which will allow users to place widgets wherever they want on the screen and have a shelf view that shows everything that's open within an application.
    • Recent news: Apple reportedly plans iPad Pro with wireless charging for 2022

     

     

    • What if the military could deliver supplies and equipment across the world in under one hour via quick trips through space? What if that technology could eventually be leveraged to enable point-to-point commercial space travel anywhere on the globe? Those realities may be possible in the future, with the U.S. expanding a small development program that wants to use reusable rockets for a program called Rocket Cargo.
    • "The Department of the Air Force seeks to leverage the current multi-billion dollar commercial investment to develop the largest rockets ever, and with full reusability to develop and test the capability to leverage a commercial rocket to deliver AF cargo anywhere on the Earth in less than one hour, with a 100-ton capacity," according to the latest budget proposal from the Pentagon. "The Air Force is not investing in the commercial rocket development, but rather investing in the Science & Technology needed to interface the capability with DoD logistics needs, and extend the commercial capability to DoD-unique missions."
    • Who would vie for the contract? SpaceX (SPACE) would be the likeliest candidate, but others that competed under NASA's Commercial Lunar Payload Services program may also be looking for some business. Those include Blue Origin (BORGN), Firefly Aerospace, Lockheed Martin (NYSE:LMT), Masten Space Systems and Sierra Nevada Corporation. Nearly $50M was allocated to the Rocket Cargo concept, but it could be years and billions of more dollars until things finally take off. Example: The Commercial Crew program for NASA took almost a decade to come to fruition, and it's currently only launching a handful of astronauts to the International Space Station.
    • Go deeper: Point-to-point space travel is something out of the science fiction theater, though it's increasingly being looked upon as an emerging industry. The space tourism market, like the one being pursued by Virgin Galactic (NYSE:SPCE), could be a precursor that could bring costs down, though other challenges would need to be overcome. Flying over land masses presents problems, as well as the logistics, infrastructure and last-mile travel to proposed spaceports. Safety concerns would additionally need to be addressed and customers would need to feel that trips through space are routine as aviation transportation.
    • Need for speed? United Airlines is looking to get in on the supersonic travel revival, ordering 15 jets from Denver-based startup Boom.

    • The stock market remains cautious in trading today, with the S&P (NYSEARCA:SPY) -0.3% down slightly. And investors may shy away from big bets until Thursday's big inflation report.
    • The core CPI is expected to show a 3.4% annual rate for May, up from 3% in April.
    • And while much of the price increases could prove to be transitory, inflation could settle down above the 2% level, which, historically, has proven beneficial for hedge funds, Wells Fargo says.
    • "Any macro driver that can lead to either asset price trends or asset price dispersion should ultimately be a boon to active management, and inflation is no different," Justin Lenaric, senior global alternative investment strategist, writes in a note today.
    • "In fact, inflation may actually be the single best macro variable for hedge funds since it is closely intertwined with interest rates, commodities, and equities."
    • Looking at six episodes of increasing inflation, including the current one, since hedge funds began to be tracked in 1990, the HFRI Fund Weighted Composite Index (NYSEARCA:HDG) is up 21.6%, Lenaric notes.
    • A 60% to 40% split between the S&P 1500 (NYSEARCA:SPTM) and the Bloomberg Barclays U.S. Aggregate Bond Index (NYSEARCA:AGG) returned 17.4% for the same six periods.
    • "Collectively, we believe that higher inflation should benefit hedge funds as another driver of fundamental dispersion," he adds. "Increasing inflation not only affects corporate margins but can also be a catalyst for deal activity and credit cycles."
    • "Moreover, since increased inflation has often coincided with with higher interest rates, strategies such as Relative Value, have tended to outperform traditional fixed income."
    • Check out Goldman Sachs' list of hedge fund VIP stocks.


  13. Phil / $$$

    i hope it's ok that i type specifics here, i feel it's better than talking in abstracts.   I'm looking for some overall financial advice and hoping you can help. 

    Backstory: 38, one kid, trying to buy a house (NYC) end of this year.  Saved 300k for downpayment, sitting in savings.  Can save about 6k a month currently (including mortgage).  Have 50k in an options account - some in line with your LTP, some others. 

    What should my next steps be? My retirement fund is very minimal.  I'm sitting in cash.  Should i put some of the 300k to work? What should i do with 6k a month?  My advertising business prospered during covid. It's constantly growing and my income is steadily rising. I want to figure out a longer term plan. 

    I know this is broad, so please, only if you have time.  

    Monk.


    • Biogen (NASDAQ:BIIB) shares resumed trading at 130p and are surging more than 41% to $403.70 in afternoon trading.
    • Shares had been halted since 1044a ET, just before the FDA announced approval of the company's Aduhelm (aducanumab) for Alzheimer's disease.
    • The U.S. Food and Drug Administration has approved Biogen (NASDAQ:BIIB) and Eisai's Aduhelm (aducanumab) to help treat patients who have Alzheimer's disease. The approval of Aduhelm is the first new Alzheimer's related drug since 2003 and can help slow the disease's progression.
    • Three exchange traded funds that can benefit from the new drug approval are the Invesco Dynamic Biotechnology & Genome ETF (NYSEARCA:PBE), VanEck Vectors Biotech ETF (NASDAQ:BBH), and Invesco BuyBack Achievers ETF (NASDAQ:PKW).
    • Breaking down the daily performance on PBE, BBH, and PKW and market participants can see the topside move. Below are the three ETFs' daily performance and a recent chart showing the recent tail end uptick in price for these funds.
    • PBE: +6.72%.
    • BBH: +5.01%.
    • PKW: +2.93%.

    • SEC Chair Gary Gensler outlined an aggressive plan to update the SEC's rules surrounding a number of issues. This included possible regulations concerning insider trading, Wall Street gamification, SPACs, and corporate disclosures related to climate risk.
    • Gensler also suggested a tougher line on certain corporate practices. As part of this, the SEC chief called on organizations within the SEC to "reinvigorate" their "enforcement mission."
    • In an interview with the Wall Street Journal, Gensler outlined potential new disclosure rules that he hopes will curtail inappropriate insider trading at public companies.
    • The SEC chief also said he would put a "high priority" on new rules related to climate-risk disclosures.
    • New regulations could also be in the works related to the gamification of stock trading. Gensler said he called on staff to recommend new rules in this area as well.
    • In addition, Gensler put a focus on increased enforcement, calling it a "critical role" for the SEC. He pointed out that this function represents about a quarter of the commission's staff.
    • Speaking about climate-risk disclosures, Gensler said he thinks that investors are calling for more transparency from companies in this area. As part of this, he would like the SEC to "help bring consistency, comparability, and reliability" to these disclosures.
    • Gensler didn't provide specific proposals concerning climate-risk disclosures but said he has asked the SEC staff to recommend potential rules.
    • He said formulating these regulations would be a high priority, so that market participants could get "investment-decision useful" information related to climate change.
    • Responding to last week's announcement that the SEC has fired the head of a key accounting oversight board, Gensler said he didn't think the organization was "living up to its potential" in terms of its enforcement mission.
    • On Friday, the SEC announced that it was removing William D. Duhnke III from the Public Company Accounting Oversight Board, or PCAOB.
    • Gensler also unveiled some changes he wanted to make regarding insider trading rules. Specifically, he aimed to "freshen up" regulations surrounding 10b5-1 plans, which allow executives to trade in shares of their companies.
    • As part of his insider trader focus, Gensler suggested a cooling-off period after execs adopt their 10b5-1 plans. He also argued for the value of limitations on when these stock-trading programs can be canceled.
    • At the same time, Gensler advocated for more disclosures related to 10b5-1 plans and limits on the number of stock-trading programs that executives can put in place at once.
    • Commenting on 10b5-1 plans in general, Gensler warned that these programs could be misused under current SEC rules.
    • "In my view, these plans, though, have led to real cracks in our insider trader regimes," he said.
    • On the topic of gamification of Wall Street, Gensler said that, while finance and technology have always lived in a symbiotic relationship, recent bouts of volatility have pointed to the possible need for new rules.
    • "I have to ask staff to take a close look and make recommendations…around, for instance, gamification and how behavioral prompts are used within trading platforms," he said.
    • On specific issue Gensler said was on the SEC's radar involved payment for order flow. This practice forms a central business model for many online trading platforms, like Robinhood, which have become popular with high-volume retail investors.
    • However, in the interview, Gensler did not provide any details about potential rules related to payments for order flow.
    • On the topic of special purpose acquisition companies, or SPACs, Gensler said he worried about retail investors who put money into these so-called blank-check IPOs. The SEC chief suggested that he would prefer more rigorous disclosure rules, especially surrounding any acquisition targets a SPAC might set its sights on.

    • The Department of Justice announces two new steps aimed at the continuing epidemic of gun violence affecting communities across the country.
    • The DOJ issued a notice of proposed rulemaking that makes clear that when individuals use accessories to convert pistols into short-barreled rifles that they must comply with the heightened regulations on those dangerous and easily concealable weapons. In addition, the department published model legislation to help states craft their own "extreme risk protection order" laws also known as red flag laws. The DOJ says it department met the deadlines that the Attorney General announced alongside President Biden in April.
    • There were no great surprises with the DOJ announcement.
    • Firearm-related stocks have rallied this year.
    • On watch: Smith & Wesson (SWBI +2.5%), Sturm Ruger (RGR +0.4%), Vista Outdoor (VSTO +1.9%), Sportsman's Warehouse (SPWH +0.1%), Ammo (POWW +3.8%) and Olin Corporation (OLN -2.3%).
    • Last week: Firearm background checks still high but off record levels.
    • For the two months ended May 31, 2021, Public Storage (NYSE:PSA) reported annual contract rent of $17.1/sq. foot moved in compared to $11.13 in the same period a year ago; contrary, sq. feet moved in dipped 13.1% to 15.9.
    • Annual contract rent of $16.74/sq. foot moved in compared to $15.26 in the same period a year ago while sq. feet moved out dipped 8%.
    • When compared to peers, the company standing is as follows:

    • As of May 31, sq. foot occupancy widened to 96.5% from 94% while annual contract rent per occupied sq. foot increased 6.4% to $18.54.
    • Same store facilities consists of 2,278 facilities that have been owned and operated on a stabilized basis since Jan. 1, 2019; facilities represented ~85% of the aggregate net rentable square feet of its U.S. consolidated self-storage portfolio at Mar. 31, 2021.
    • The company indicates engines of long-term growth:


  14. I have a really small RMED position (I think Pharm ? mentioned it a while back)  — I don't see any news on why it's up nearly 100% — anyone?


    • The stock market remains little changed with defensive sectors in control.
    • The Nasdaq (COMP.IND) -0.1%, S&P (SP500) -0.3% and Dow (DJI) -0.3% are slightly lower.
    • The 10-year Treasury yield is still up 1 basis point to 1.57%.
    • Trading is echoing last week's pattern, where the market traded sideways until the big payrolls report. This week's economic indicator of note will be May consumer inflation on Thursday.
    • "Economic data have been erratic, and we expect more of the same as economies restart amid pent-up consumer demand and supply shortages," BlackRock says. "We advocate looking through near-term market volatility and remain pro-risk, predicated on our belief that the Fed faces a very high bar to change its easy monetary policy stance."
    • Four of the 11 S&P sectors are higher, with Healthcare (NYSEARCA:XLV) on top. Eli Lilly is rallying more than 10% after Biogen's Alzheimer's drug was approved.
    • Materials (NYSEARCA:XLB) is at the bottom.
    • Among other active stocks, cruise lines are higher after Norwegian unveiled additional voyage resumption plans.
    • And Progressive is the biggest S&P decliner after a Morgan Stanley downgrade.

    • May TD Ameritrade Investor Movement Index8.32 vs. 8.14 in April.
    • “Clients took some risk off the table in May, favoring assets such as U.S. ETFs and Fixed Income over equities,” said JJ Kinahan, chief market strategist, TD Ameritrade.
    • AMC Entertainment (NYSE:AMC) +17% is rallying again on very heavy volume, while regulators say they are keeping an eye on certain stocks.
    • "SEC staff continues to monitor the market in light of the ongoing volatility in certain stocks to determine if there have been any disruptions of the market, manipulative trading, or other misconduct," the SEC says in a statement. "In addition, we will act to protect retail investors if violations of federal securities laws are found."
    • More than 194M shares of AMC have changed hands today, more than double the volume of the second-most-active stock, fellow meme play BlackBerry (NYSE:BB) +11%.
    • RA Medical (NYSE:RMED) +50% is third in volume on all exchanges, after it gained the attention of the WallStreetBets crowd.
    • Last week Trey Collins, one of the faces of the AMC "Ape Army" said the fundamentals indicate a fair share price of $20 to $25.
    • AMC has asked shareholders to approve the sale of 25M more shares in 2022.
    • And even though its market cap has topped $25B, AMC will remain in the Russell 2000.
    • Low for-sale inventories and record low interest rates pushed home prices up 14.8% in April, the highest annual home price growth rate that Black Knight has seen in it almost 30 years of collecting data and the 17th straight month of increases.
    • For-sale listings are down 53% in April vs. a year ago causing a 750K deficit in homes listed on the market. The data firm's Collateral Analytics group estimates there were just two months' worth of single-family inventory nationwide in March, the lowest supply on record.
    • The accelerating pace of home price increases is making home ownership less affordable.
    • "It now takes 20.5% of the median income to make monthly payments on the median-priced home, which roughly has been the tipping point between accelerating and decelerating home price growth in recent years," Black Knight notes.
    • That's still better than the 25-year average of 23.6%, but exceeds the five-year average of 20.1%, even with interest rates back below 3%, according to Black Knight.
    • The median sales price of existing homes is $341,600 in April, an increase from $286,800 in April 2020, according to the National Association of Realtors. 
    • If home price appreciation continues at its current pace and 30-year rates rise to 3.5% by the end of 2022, the national payment-to-income ratio would hit 21.6% by the end of this year and 25% by 2022. If the 30-year rate increased to 4% by the end of 2022, the ratio would rise to 22% by the end of 2021 and 26.7% by the end of 2022.
    • But that's only if home price appreciation continues at the current pace. If buyers drop out of the market, then the pace may moderate.
    • The inventory of homes for sale may also soon start to increase as COVID fears recede. A survey of would-be home sellers found that 77% of respondents say they're expecting to list their home in 2021, Better.com said, citing a Clever Real Estate survey; of those planning to list, 45% plan to by the end of June.
    • The question remains: Will the increase in inventory be enough to slow price appreciation, and thus, keep the affordability measure stable?
    • Related stocks to watch include mortgage companies like Rocket Companies (RKT -0.5%) and UWM Holdings (UWMC +1.9%) and real estate brokerages like Re/Max (RMAX +0.9%),  Redfin (RDFN +4.1%), Realogy (RLGY -0.4%), Zillow (Z +2.4%), eXp World Holdings (EXPI +7.2%), and Compass (COMP -2.1%).
    • SA contributor Ironman at Political Calculations observes that April's surge in median household income is being accompanied by rapidly rising inflation, which is eroding the purchasing power of households.
    • Global miners slide alongside prices for copper and iron ore following weaker than expected trade data from top consumer China that showed lackluster demand for raw materials.
    • Imports to the world's biggest steel market slowed to 89.79M metric tons in May, well below the 98.57M tons China bought in April and 102.11M tons in March and marking the lowest level in a year.
    • China's May steel exports plunged by a third from a month earlier to 5.27M metric tons.
    • Also, Peru's election remains too close to call; Peru is the world's second-largest copper producer and presidential contender Pedro Castillo has promised to extract more taxes from multinational miners.
    • Freeport McMoRan (FCX -2.8%) is one of today's biggest losers on the S&P 500, with other major miners trading broadly lower: SCCO -4.6%CLF -2.6%NUE -2.6%X -2.1%STLD -2.3%AA -3.3%HBM -5.2%TECK -3.4%RIO -2%TRQ -2.7%BHP -1.7%VALE -1.3%.

     

     

    • Penn National Gaming (PENN +3.5%) is the leading gainer in the S&P 500 Index after reports indicate another strong weekend of casino traffic across the U.S.
    • Bally's (BALY +2.2%), MGM Resorts (MGM +1.1%), Century Casinos (CNTY +1.8%) and Caesars Entertainment (CZR +0.9%) are also notably higher. Hotel stocks Marriott International (MAR +0.3%) and Hilton Worldwide (HLT +0.6%) are only seeing minor gains, despite strong booking data.
    • Bank of America reports COVID-era highs for credit/debit card spending on lodging and airline purchases, while domestic flight searches and TSA check-ins also hit post-pandemic highs. U.S. revenue per available room was down 6% from the level seen for the same week in 2019 in another sign of a strong recovery.
    • Compare Penn to other casino stocks.
    • See Seeking Alpha Quant Ratings across the casino sector.

  15. Retirement/Monk – Well you need to talk to a Financial Advisor, I'm not one.  Someone who has your whole situation in front of them.  Generally though, 38 is pretty young and it's nice you have $300,000 and saving $6,000/month with $50,000 in an account.  If you are talking about putting the deposit on your house to work for a short period – that's not ideal.  What you need to decide is do you have a proper retirement goal?  

    That always goes back to the good old Compound Rate Calculator and, if you have $50,000 now and add $72,000 a year for 30 years at 7%, you'll have $7.65M in 2051.  If you stick to good, solid dividend stocks – they should move up with inflation and then, at 5%, you'd have $380,000 a year coming out during retirement and hopefully some bonus money from selling your business, your paid-off home, etc.  

    And that's just making 7% a year (including bad years), below the market average.  At 10% it would be double that but it also means your not using that money to pay for college, etc.  

    If you have that discipline to keep saving as a priority, you should do well simply investing in blue-chips like the LTP or the Dividend Portfolio.  When you have an extra-good year (like the Dividend Portfolio had this year), then you can take an extra whatever and be a little more aggressive but never take your eye off that retirement ball.  

    For example:  

    • 1,000 shares of T at $29.10 ($29,100) 
    • Sell 10 2023 $27 puts for $3.20 ($3,200)
    • Sell 10 2023 $27 calls for $3.20 ($3,200) 

    That's net $22,800 and, if assigned 1,000 more at $27 ($27,000), you'd be in for an average of $24.90 as your worst case.  That's year one.  The dividend is $2.08 ($2,080) per year so $3,120 through Jan 2023 and let's say you get called away at $27,000, that's $30,120 back for a $7,320 (32%) profit in 18 months.  

    If I have $50,000 to work with and $108,000 coming in ($6K x 18) between now and Jan, 2023, then I'd sell more puts on the next stock I want like:

    • 5 RIO 2023 $79.07 puts for $11 ($5,500) in January (22) 
    • 10 MO 2023 $42.50 puts for $4.50 ($4,500) in June (22) – assuming the first puts are on track
    • 10 WBA 2023 $45 puts for $4 ($4,000) in Jan (23) – assuming the other puts are on track

    So now, in this 18-month cycle, you cash T at $30,120, you never touched $27,200 of your $50,000 and you added $108,000 and added $14,000 in short call money.  Of course the strikes and stocks may change but the point is you now (18 months from now) have $179,320 from your initial $50,000 + $108,000 that you added so a gain of $21,320 (13.5%) in the first 18 months playing super-conservative.  

    In the next cycle, you can have 2 or 3 active stocks paying you while you follow the same pattern collecting put money on things you would like to buy if they get cheaper and those gains compile quickly – even though you are being very careful with your investments.  

    That's all it takes to retire with $7.6M (plus house, plus selling business) starting from where you are now in 30 years.  You just need to get started…


  16. RMED/Jeff – It's another one of those Reddit-followed stocks – just their turn today. 


  17. In Gemini, if you hold USD as GUSD (Gemini's USD stable coin), it earns 7.4%. You do have to trust the stable coin though. Stipulating that, the following is true.

    As an example of leveraging I'm sitting on $25k I could use to pay off a used car, but the loan rate is 2.74%, so I'm making 4.66% APY for free. I consider it the arbitrage amount that exists between two different types of economies, the deprecated traditional banking (manufacturing economy) and the emergent decentralized finance of the knowledge economy. As long as the former keeps shrinking in comparison to the expansion of the latter, these types of plays will continue to exist.

    So Monk, if you have $300k and want to make $1850 a month, that's one way to go.



  18. Phil-thanks for the opk trade. It was what I thought sounded good too.