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Fabulous Friday Finish – Everything is Awesome

Best week since April!  

We're up 2.5% this week and sure, it's a low-volume rally based on Powell's promises that inflation isn't real and there's plenty of free money backed by Biden saying the Government will print even more money and nobody seems to think debt matters anymore so PARTY!!!  “That also reassures the market that the Fed will not be overly hawkish in their tightening policy,” said Peter van der Welle, a strategist at Robeco. At the same time, “the infrastructure deal also portrays that the fiscal thrust is still very much with us,” he added.

Of course, the Dow still isn't back to the May/June highs but an optimist would say that means we have 1,000 points more to climb and who isn't a market optimist these days?  The S&P 500 is at new highs (4,260) and the Nasdaq is testing 14,400 and the Russell is almost back to 2,375, where it was in March, when we were being promised $2.2Tn in Infrastrucuture.  So now we're getting $1Tn – that's just as good, right?  

Any excuse for a low-volume rally and Gasoline (/RB) is back at decade highs – even though we're using substantially less of it.  What differecne does that make?  Consumers have money and our Corporate Masters have all the data they need to figure out the best way to squeeze it out of you.  They know what buttons to push and when to push them, don't they?  

And what could possibly go wrong, just check out the headlines from the Corporate Media (WSJ front page):

Wow, all this great news makes me want to run out and buy stocks before the Nasdaq hits 30,000!  

Oops, forgot about that, didn't we?  Well, it's only Sydney – they are on the other side of the World.  When did a virus on the other side of the World have anything to do with us, right?  They say those that forget the past are condemned to repeat is but is this even the past?  Aren't we still kind of in the same crisis?  I don't know, it's hard to remember with all the bullishness.  After all, ONLY 12,436 people in the US caught Covid YESTERDAY and ONLY 375 people died of the disease YESTERDAY - it's not like it's a problem or anything, right?  

Cruise ships are starting to sail agin – that's a GREAT idea, right?  Even better – some cruise lines don't require you to be vaccinated to sail.  They don't even require their workers to be vaccinated.  That is f'ing unbelievable!  Even more unbelievable is that Florida Governor, Ron DeSantis, has banned the concept of vaccine passports in the state.  

What do unvaccinated people do on cruises?  They spend a week together in a very tight space taking occasional breaks to walk around other countries, insuring maximum exposure to every possible variant.  Then, before an infection is likely to show up in a test – they head straight back to the airport and get in close proximity to another 200 people plus thousands more at airports all over the country.  What could possibly go wrong?  Oh yes, and their kids go back to school, of course – all such great ideas!  

In Texas (another state cruise ships leave from), 59% of Republicans surveyed said they are either reluctant to be vaccinated or refuse to take it outright.  But the trend among Republicans is nationwide. A Civiqs poll updated in March indicated that white Republicans make up the largest demographic of people in the U.S. who remain vaccine hesitant with 53% saying they were either unsure about or not getting the vaccine.

Most hesitancy among Republicans stems from a distrust of scientists and an unfounded concern about how new the vaccine is, said Timothy Callaghan, an assistant professor of health policy management at the Texas A&M School of Public Health.  “What you do find is that over time conservatives have been more vaccine hesitant than liberals, which you can largely attribute to higher levels of distrust in the scientific establishment among conservatives,” Callaghan said.

Gosh, I wonder where all these crazy ideas came from?  

Have a great weekend, 

- Phil

 


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  1. Well Phil what comments on vaccination. Sometimes it is hard for me to believe there are such non-believers in respect of vaccination.
    I can only hope they will feel the pain finally. We are both fully vaccinated and even masks are still a must in shops etc. we really feel relieved, not feeling the fear of being attacked by an invisible enemy.


  2. Well, GM PSW!  That $1T infrastructure plan is just the beginning. Dems will add to it under the reconciliation legislative plan….OH BOY OH BOY! 


  3. Here my small idea on option trade today.

    TAN buy 4x Jan23 70/90 BCS a 9.00 and sell 2x Jan23 70 puts for 7.70. Prices may change at opening and you can do any multiples in respect to my sample. Conservatively you as well can start looking at  selling 1/2 the Aug 90 or 95 short call, more as a monthly play while you waiting.


  4. @Pharmboy

    Any updates on or thoughts on KPTI, TRIL, ABUS?  Holding a small amount and hoping.

    Thanks


  5. Jeff…I have been adding to KPTI and TRIL. ABUS just holding.  Fall should be better for biotech.  GLUE just went public as well.  Watch them, although disclosure…I cannot comment on them. :)   One can compare them to KYMR or CCCC…and know either GLUE goes up, or the other two come down.


  6. CRIS is one that we played many eons ago. I am also in them for stock selling the Aug 10Cs.  Data are compelling.


  7. Good morning!

    Here's that Seminar I did with TD last week – mostly the basics.

    Vaccination/Yodi – It is a tremendous weight off.  Still, even my youngest daughter, who loves cruises, said she won't go on one until this is much more over.  She didn't mind flying down here last week.  Down in Florida, the waiters have stopped wearing masks but still most people in the grocery store wear them.  Stores are left to their own policies.  I stay away from the low end but, sadly, many upper-class white Republicans in Florida who refuse to get vaccinated.  

    And don't forget reparations, Pharm!  They should do that too and watch the Republicans' heads explode….

    What happens if I put my head inside (physical constraints ignored) a  microwave Oven and turn it on? - Quora

    Live from Mar a Lago 

    TAN/Yodi – A lot of expensive stocks in there.  SPWR only $27.92 – what else do you need?  You are putting in $2,060 cash and obligate to own 200 @ $70 ($16,060) so $80.30/share if all fails.  Upside potential is $5,940 at $90.

    On SPWR, we can do this:

    • Sell 10 2023 $20 puts for $3.65 ($3,650) 
    • Buy 20 2023 $20 calls for $11.75 ($23,500) 
    • Sell 20 2023 $30 calls for $7.50 ($15,000) 

    That's net $4,850 so more cash but a very small commitment on the put side ($20,000) so $24,850 is $24.80/share on 1,000 if assigned and the upside potential is $15,150 at $30.  There's very few ETFs where I wouldn't rather pick my own components out of the mix.

    Thanks Pharm!

    GLUE just went public:

    • In its first day of trading, shares of Monte Rosa Therapeutics (NASDAQ:GLUE) are up 15.8% to $22 in afternoon trading.
    • The company priced its upsided IPO of 11.7M common shares at $19.00/share, for expected gross proceeds of ~$222.3M.
    • Monte Rosa's lead program is a series of molecular glue degrader ("MGD") molecules being developed  to treat various types of lung cancer.
    • These MGDs can induce protein-protein interactions, enabling the elimination of protein targets without binding pockets — so-called undruggable proteins by conventional drug discovery approaches.

    Cool stuff!


  8. Thanks Pharm 


  9. SPWR 

    im having a tough time with the search function – do you have easy access to your general thesis on them? thanks!


  10. Yes our upper mid class sister in law escaped death by a hair, but is still in the hospital with ongoing lung and other health problems. I'm still wearing masks as I do believe about 50% are clueless of how devastating this illness is even if you survive.


  11. SPWR/Monk – Doesn't get much easier than this:

    Year End 3rd Jan 2016 2017 2018 2019 2020 2021 TTM 2022E 2023E CAGR / Avg
    Total Revenue
    $m

    1,576 2,553 1,794 1,202 1,092 1,125 1,141 1,509 1,871 -6.53%
    Operating Profit
    $m

    -206 -372 -1,025 -303 60.6 -6.01 11.3      
    Net Profit
    $m

    -187 -449 -929 -811 22.2 475 405 49.0 116  
    EPS Reported
    $

    -1.39 -3.25 -4.49 -1.97 1.31 3.11 2.79      
    EPS Normalised
    $

    -1.36 -2.57 -1.48 -0.953 0.790 3.06 2.75 0.303 0.652  
    EPS Growth
    %

              +287 +59.3 -90.1 +115  
    PE Ratio
    x

              9.08 10.1 91.7 42.6  
    PEG
     

                  0.796 0.874  
     

    All yours for 5Bn at $28.  My logic is it only takes a small amount of Government love to make a big difference in their bottom line and they're already growing nicely.  A few contracts and some favorable loans or LCs and they could be flying.  Maxeon (MAXN, who they spun off) is supplying them so no China issues and the new chips are significantly cheaper than the high-end solar SPWR is famous for (they are most efficient in the market on the high end).  

    SunPower currently offers IBC [interdigitated back contact] solar modules to their residential and commercial customers in the U.S. Their IBC modules are widely regarded as the best commercial solar modules money can buy. What differentiates SunPower's n-type IBC modules from p-type silicon-based modules widely used today are extra manufacturing steps and components. Without getting too technical, SunPower's IBC modules are more rugged and thus degrade at a lower rate compared to mainstream p-type solar modules. Higher purity silicon combined with a full-contact back-plate also make IBC cells more efficient than high-end p-type mono-PERC cells.

     

    As a result, IBC modules perform better in lower light, intermittent shade, higher heat and humidity conditions over the warrantied lifetime. Even without negative environmental factors, IBC modules can potentially produce 10% more power over a 25-year period than higher-end mainstream mono-PERC modules with the same power output rating. With negative contributing environmental factors, the advantage could exceed 20% especially when shading is a factor. However, quality comes at a price. Total installed cost can vary by state and competing brand, but customers can expect to pay anywhere from 10% to 20% for a SunPower system with similar components. While higher upfront costs can be recovered in time due to superior IBC module performance, the sticker shock especially for customers paying in cash could make SunPower's systems a harder sell.

    By the way, we forgot about that counting our SPWR gains in the portfolios – we got all that free MAXN stock too!  

    Having a company-branded mainstream option could be huge. SunPower is already regarded as a premium brand with high-quality solar modules. The company could use this brand advantage to both upsell and downsell systems based on a customer's needs and/or budget. P-Series systems could be priced similar to peers but under a single brand and warranty. Most installers today sell systems comprised of mix-matched brand components. The lower cost point of P-Series systems would also make commercial installations more financially rewarding by lowering the system's payback period.

     

    In short, it would open SunPower to the entire U.S. residential and commercial market where growth is booming instead of confining the company to the high-end niche segment where growth potential could be capped. For example, competitor Sunrun's (RUN) installed volume in 2020 rose by 46% annually while SunPower's recognized volume declined by 5% from 2019. With P-Series modules available as early as the start of 2022, SunPower could potentially match peers such as Sunrun in terms of installed volume growth in the markets it competes in. If Maxeon allocates just 10% of its intended 3600 MW capacity to SunPower, SunPower's annual installed volume could grow by over 50% from the estimated 600 MW this year.

    Q1 EARNINGS

    Q1 EARNINGS

    Q1 EARNINGS

    Q1 EARNINGS

    Devastating/Pirate – And isn't it ridiculous, almost 18 months into this crisis – how uneducated the public still is about the disease and it's effects?  How are we not all experts on this by now?  Corporate Media and Corporate Government don't want people focusing on the negatives so even healthy discussions of the facts are discouraged.  

    Detailed findings:

     1. Americans are venturing out into the world at increasing rates as fears about COVID decline.

    • Two thirds of Americans (66%) saw family and friends in the last week and almost as many (61%) went out to eat. Both of these figures are up three percentage points from before Memorial Day and represent the greatest level of out of home activity since the start of the pandemic.

      • The vaccinated (63%) and unvaccinated (58%) are not significantly different when it comes to dining out.
    • At the same time, less than half (44%) of Americans report social distancing in the last week, the same level as before Memorial Day.
    • This comes as only a third (30%) of Americans view returning to their pre-coronavirus life as a risk, down eight points from late May and less than half the number who felt risk throughout last year.
    • More Americans report their emotional (19%) and mental (17%) health improved in the last week than got worse (13% emotional, 10% mental).

    W47

     2. The block of opponents to getting vaccinated does not appear to have shrunk, even as some of the harder-to-reach groups continue to get their shots.

    • Two in three American adults (66%) report receiving a COVID vaccine, in line with current CDC figures (64%).
    • Seven percent report they remain likely to get a COVID vaccination with an additional seven percent saying they are not likely, but not hard opposed (14% total reachable adult population).
    • One in five (19%) report they are not at all likely to get the vaccine. This ‘hard pass’ group has remained approximately the same size since January.
    • Turning to parents, approximately half (45%) continue to say they are not very or not at all likely to get their children vaccinated. About one in eight (15%) report that their child has been vaccinated.

      • That number of vaccinated children climbs to 30% if we look only at parents of 12-17 year olds (the age group currently eligible) with 40% saying they are not likely to get their child vaccinated.

     3. Americans are divided on the need for vaccines (or proof of vaccine status) as the country reopens.

    • A majority of Americans support requiring vaccination and proof of vaccination to travel or attend a large event.
    • About half of Americans support requiring vaccination to dine indoors (47%), go to a salon (49%), or to return to places of employment (52%).

      • However, Democrats and Republicans are far apart on these Three quarters (76%) of Democrats support showing vaccine status to return to the workplace compared to less than a third (29%) of Republicans.

  12. TAN Phil a combination of many, Look how FSLR is up in two days.


  13. FSLR benefitting from Chinese ban.

    Bank of America believes inflation will remain higher for up to four years

    • Bank of America expects that inflation will continue to likely remain elevated for two-four years, going against the grain of the Federal Reserve's "transitory" position.
    • Michael Hartnett, one of Bank of America's top strategists, believes that inflation will continue to stay in the 2-4% range for the next two-four years. In a note by BofA, they outlined that U.S. inflation has an overall average of 3% over the past 100 years. It also averaged 2% in the 2010s and 1% in 2020. However, from an annualizing standpoint, in 2021, inflation is 8%.
    • Hartnett stated that it was "fascinating so many deem inflation as transitory when stimulus, economic growth, asset/commodity/housing inflations (are) deemed permanent."
    • For investors who share a similar point of view with BofA, they may look to analyze a handful of exchange-traded funds that are known to provide protection against inflationary pressures.
    • Treasury inflation-protected ETFs: iShares TIPS Bond ETF (NYSEARCA:TIP), SPDR Portfolio TIPS ETF (NYSEARCA:SPIP), Schwab U.S. TIPS ETF (NYSEARCA:SCHP), and Vanguard Short-Term Inflation-Protected Securities ETF (NASDAQ:VTIP).
    • This perspective by Bank of America is unlike the viewpoint that PIMCO has. In a recent report put out by PIMCO, they stated the following: "Overall, we forecast developed market inflation to end 2021 running at a 3% average annual pace, before moderating back to 1.5% in 2022 – below developed market central bank targets."

     

    • University of Michigan June Consumer Sentiment 85.5 vs. 86.5 consensus and 86.4 prior.
    • The print, the second-highest since the start of the pandemic, is still higher than the 82.9 reading in May 2021 and is 9.5% higher than a year ago.
    • All of the June gain was among households with incomes above $100K, and mainly a result of views on future economic prospects, said Richard Curtain, Surveys of Consumers chief economist.
    • Consumers' views on inflation are also moderating some. "Not only did year-ahead inflation expectations fall slightly to 4.2% in June from May's decade peak of 4.6%, consumers also believed that the price surges will mostly be temporary," Curtain said.
    • Current Economic Conditions: 88.6 vs. 90.7 expected and 90.6 prior.
    • Index of Consumer Expectations: 83.5 vs. 83.8 expected and 83.8 prior.
    • Inflation expectations: 4.2% vs. 4.0% expected and 4.6% in May.
    • Another interesting observation in the report: "The growing strength in the economy meant that nearly three-quarters of all consumers expected rising interest rates during the year ahead, the highest proportion since 2018 when the economy was near its last peak."
    • Consumers still see risks from COVID variants as "appreciable," Curtain added

     

    • A large funding bill approved yesterday by the House Appropriations Financial Services and General Government Subcommittee includes provisions that protects banks from penalties if they do business with cannabis companies, Marijuana Moment reports.
    • The bill, which will be go before the House Appropriations Committee next week, states that no funds included in the legislation can penalize a financial institution that engages  with a manufacturer, producer or business involved with hemp, cannabidiol, or marijuana products.
    • In April, the full House approved the SAFE Banking Act, which gives legitimate, US cannabis business access to the US banking system.
    • Multi-state operators in morning trading: Trulieve (OTCQX:TCNNF) +1.5%, Harvest Health & Recreation (OTCQX:HRVSF) +0.9%, Curaleaf Holdings (OTCPK:CURLF) +1%, Acreage Holdings (OTCQX:ACRHF) +0.1%, Cresco Labs (OTCQX:CRLBF) +0.3%, Green Thumb Industries (OTCQX:GTBIF) +0.7%, and MedMen Enterprises (OTCQB:MMNFF) +0.1%.

    Europe's local-content streaming rules are set to pain Disney – report

    • Europe is set to enforce new regulations on streaming services requiring minimum percentages of localized content – restrictions that will land with uneven impact on the streaming contenders based on their investments so far.
    • The European Commission rules indicate that a minimum of 30% of movies and TV shows on streaming services be European in origin – and that is being followed by country-specific rules that could go further (France has just passed a 60% minimum for European content).
    • And of the big providers, Disney Plus (NYSE:DIS) has the least European content in the region, The Information notes.
    • Disney is well short of 30% Europe content on its country-specific versions of Disney Plus, landing at 8-11% overall.
    • And Disney suffers there particularly in comparison to its biggest rivals. Netflix (NASDAQ:NFLX) - one of the biggest content investors overall and the dominant platform in most European streaming markets – is just under the 30% threshold in major markets. And Amazon Prime Video (NASDAQ:AMZN) is well above 30% in Italy, Germany and Spain.
    • (Nobody is close to getting the 60% called for by France, however.)
    • It's unclear exactly when the new rules will be effective, as the COVID-19 pandemic led to some indefinite delays in deadlines. And meeting the new guidelines might get even harder soon: Regulators are reportedly considering excluding British programs (like Netflix's hit The Crown) from the definition of European works now that the UK has exited the European Union.

     

     

    • Pete Buttigieg, a former Democratic presidential candidate and Transportation Secretary in President Joe Biden's cabinet, downplayed lingering tensions in Washington on Friday, saying that passing a compromise infrastructure bill with Republicans while still pursuing budget reconciliation for other spending preferred by Democrats was "how two-tracks strategy works."
    • In an interview with CNBC, Buttigieg couldn't say whether moderate Democratic senators Kyrsten Sinema (D-Ariz.) and Joe Manchin (D-W.Va.) would vote for the additional spending through budget reconciliation.
    • "You can't guarantee how a senator is going to vote on a bill that hasn't yet been written," he said.
    • However, Buttigieg suggested that a compromise infrastructure spending bill reached with Republicans improved the chances that deals could be reached on other matters as well.
    • "This atmosphere of compromise and collaboration, I think makes progress more likely and more possible on all fronts," he added.
    • Buttigieg also pushed back on the idea that moving forward with the budget reconciliation strategy somehow undermined the infrastructure compromise. He said he believes all parties "understood from the beginning" that the budget reconciliation process would continue.
    • On Thursday, President Biden announced that he had reached a deal with congressional Republicans on a bipartisan infrastructure deal worth $1.2T over eight years, including more than $500B of new spending.
    • However, Biden later said that he wouldn't sign the infrastructure compromise unless other provisions not included in the bill were passed as part of the separate reconciliation process.
    • Following the announcement of the infrastructure compromise, shares of construction firms and steelmakers got a lift. This included big names like Caterpillar (NYSE:CAT) and Vulcan Materials (NYSE:VMC).
    • Increased spending on infrastructure has been a goal of the Biden Administration for months. For some commentary on how to invest in enhanced government-sponsored construction projects, take a look at a report prepared by SA contributor Michael Fitzsimmons.

    • A strong earnings report from Nike and a wave of bullish notes from analysts are giving a lift to a number of sporting goods and apparel retail stocks.
    • Notable gainers include Hibbett Sports (NASDAQ:HIBB) +6.07%, Adidas (OTCQX:ADDYY) +5.61%, Under Armour (NYSE:UA) +3.11%, Foot Locker (NYSE:FL) +2.95%, Skechers (NYSE:SKX) +2.93%, Deckers Outdoor (NYSE:DECK) +2.69%, Big 5 Sporting Goods (NASDAQ:BGFV) +2.77%, Dick's Sporting Goods (NYSE:DKS) +1.78%, Lululemon (NASDAQ:LULU) +1.55%.
    • Nike's positive read on consumer demand for athletic apparel and footwear has reset some thinking on the post-pandemic growth potential. Nike management also seemed comfortable on the path in China and persistent inflation headwinds during the earnings call. While Nike expects supply chain delays and higher logistics costs to persist throughout much of FY22, the company also anticipates losing some of its COVID-related costs, gain efficiency and see strong full price realization.
    • The S&P Retail ETF (XRT +1.3%) is outperforming the broad market today, with the Nike earnings report pitching in.
    • Read the Nike earnings call transcript.
    • Sens. Bill Cassidy (R-La.) and Elizabeth Warren (D-Mass.) are calling for a hearing to examine questions surrounding how Medicare will be able to fund coverage of Biogen's (NASDAQ:BIIB) Alzheimer's drug Aduhelm (aducanumab).
    • In a letter to Senate Finance Committee Chairman Ron Wyden (D-Ore.) and Ranking Member Mike Crapo (R-Idaho), Cassidy and Warren write that the approval "has dramatic implications for our health care system that stretch well beyond the scope of FDA’s jurisdiction."
    • The pair say they are "troubled by reports" that Aduhelm could cost Medicare between $37B and $90B.
    • Aduhelm has a list price of $56K. Its labeling allows use of the drug in patients in all stages of the disease, which the senators say could number more than 6M.
    • "This level of potential new spending, particularly for just one product with limited evidence of clinical efficacy thus far, tests the program’s resiliency," the letter continues.
    • The pair note that FDA approval does not guarantee Medicare coverage so the Centers for Medicare and Medicare Services has to answer a tough question: "Should it cover a new and expensive Alzheimer's medication, and if so, how?"
    • Biogen shares are up 0.4% to $350.55 in morning trading.
    • There is some buzz building over an investor event that United Airlines (NASDAQ:UAL) has scheduled for next week.
    • Analysts think United will update some financial information and cover post-pandemic strategy, but the highlight could be details on a large plane order.
    • Separate reports indicate United could announce an order of 100 Boeing (NYSE:BA) 737 Max 8 jets or 200 single-aisle jets in a combo deal of Airbus (OTCPK:EADSF) A321 and Boeing 737 Max jets. Some industry sources think the aircraft deal will be one of the largest ever.
    • United operates one of the industry's oldest fleets. United is also taking into consideration the benefit of fuel-efficient models as part of its fleet upgrade strategy.

    • May Personal Income and Outlays: -2.0% M/M vs. -2.6% consensus and -13.1% prior.
    • Consumer spending: 0.0% M/M vs. +0.3 % consensus and +0.9% prior (revised from +0.5%).
    • PCE Price Index: +0.4% M/M vs. +0.5% consensus and +0.3% prior (revised from +0.6%).
    • Core PCE Price Index: +0.5% M/M vs. +0.6% consensus and +0.7% prior.
    • On a Y/Y basis, core PCE price index rises 3.4%, in line with consensus and representing the fastest increase since the early 1990s, according to the Commerce Department report.
    • Recall, though, that a year ago many prices, especially for energy, were depressed. That's what Fed Chair Jerome Powell refers to the "base effect." In the coming months, that part of inflation should fade, he contends.
    • Futures for the major stock averages continue to stay in the green; S&P futures rise 0.2%, Dow futures +0.4%, Nasdaq futures +0.2%.
    • The decline in personal income in May primarily reflects a decrease in government social benefits, as economic impact payments (known as stimulus checks) continued, but at a lower level than in April.
    • The PCE price index in May reflects Y/Y increases in both goods and services, with energy prices up 27.4% and food prices up 0.4%
    • Self-driving tech company Pony.ai is mulling over going public to help fund its goal of developing a commercial autonomous ride-hailing service, according to Reuters.
    • The time frame for an offering of shares has not been determined by the startup.
    • Pony.ai has already raised more than $1B, including $462B from Toyota (NYSE:TM). The latest funding round valued the self-driving tech firm at $5.3B.
    • Pony.ai has been conducting autonomous driving tests on public roads in California and Guangzhou, China.
    • The plan is to install its technology in hundreds of vehicles next year in 2022 and tens of thousands by 2024 to 2025.
    • "For autonomous driving, it's a big opportunity. But at the same time, it's a long term, big opportunity," says Pony.ai CEO James Peng on the track ahead. Peng says the company's ambitious plan requires a long lead way for spending.
    • Pony.ai plans to partner with Luminar on the next-gen robotaxi platform.
    • California regulators approved a proposal yesterday that will require utilities in the state to buy at least 11,500 MW of capacity from zero-emitting or renewable resources during 2023-26.
    • Relevant tickers: PCGEIXSRE
    • The California Public Utilities Commission says the order will allow for a better response to extreme weather and replace capacity expected to be lost from the retirement of the Diablo Canyon nuclear plant and several natural gas plants later in the decade.
    • The proposal replaces earlier drafts that were opposed by environmental groups because they called for utilities to buy up to 1,500 MW of capacity from fossil-fired generation, mostly natural gas.
    • The PUC also approved changes that will reduce the value of the energy produced by rooftop solar systems by 74% compared with last year.
    • California ISO urged consumers to conserve energy to avoid rotating outages during last week's heatwave.
    • Scott Minerd, co-founder and global chief investment officer at Guggenheim Investments, said Thursday that he sees Bitcoin (BTC-USD) falling to around $15,000, with potentially years worth of consolidation to come.
    • Speaking to CNBC, the well-known investor explained the recent strength in Bitcoin had been supported by significant "central bank liquidity." He said that as that liquidity fades, Bitcoin has fallen.
    • “The real bottom, when you look at the technicals, $10,000 would be the real bottom. You know, that’s probably a little extreme, so I would say $15,000," he said.
    • Minerd added that he "wouldn't be in a hurry" to jump back into Bitcoin at $20,000, noting that washouts in a market can take "a couple of years" to consolidate.
    • "I don’t think people need to be anxious to be putting money in bitcoin right now,” he concluded.
    • Despite his expectation for more declines in the near term, Minerd predicted significant upside for Bitcoin over the long haul.
    • He pointed to Guggenheim research that suggests that Bitcoin would be valued at $400,000 to $600,000 if it were to become a store of value on par with gold. Minerd argued that additional institutional support could push the cryptocurrency toward those levels.
    • Looking for more calls from Minerd? Check out his perspective on the Green New Deal, posted on Seeking Alpha.

    • The Refinitiv Lipper U.S. fund flow insight report for the week of June 23, 2021, shows that investors were overall net redeemers of fund assets, including conventional funds and exchange traded funds. The market community was net sellers two weeks in a row now as participants withdrew -$15.4B on the week.
    • When examining where the flow of funds went, it can be seen that money markets represented the sole driver of the withdrawals with outflows of -$29.9B. Equity funds, taxable bond funds, and tax-exempt bond funds all attracted new money, +$10.0B, +$2.7B, and +$1.9B, respectively.
    • Exchange traded equity funds for the third week out of the past six has recorded net outflows totaling -$2.84B. From a sector standpoint, technology and real estate ETFs had the most significant attractions of inflows coming in at +$738M and +$669M. On the contrary, the financial and banking segment of the market witnessed the greatest outflows of -$2.5B.
    • During the week, the two-equity exchange traded funds that attracted the largest amount of new capital were SPDR S&P 500 ETF (NYSEARCA:SPY) +$1.7B and Invesco QQQ Trust 1 (NASDAQ:QQQ) +$1.4B. On the flipside Financial Select Sector SPDR ETF (NYSEARCA:XLF) -$2.0B and Invesco S&P 500 Equal Weight ETF (NYSEARCA:RSP) -$1.0B saw the greatest outflows.
    • Dissecting the exchange traded fixed income funds space and the investment community will see that government-mortgage ETFs brought in +$415M and flexible ETFs saw +$377M. The three sub-groups to record net outflows were international & global debt ETFs -$131M, government-Treasury & mortgage ETFs -$99M, and balanced ETFs -$2M.
    • iShares 7-10 Year Treasury Bond ETF (NASDAQ:IEF) +$288M and SPDR Portfolio Mortgage Backed Bond ETF (NYSEARCA:SPMD) +$261M pulled in the most extensive sum of net new money.
    • In other exchange traded fund news, Amplify ETFs has announced the launch of its latest ETF DTOX. DTOX is the market's first pure-play clean living ETF.
    • Rio Tinto (NYSE:RIO) has kept secret since the 1990s its role in the destruction of an iron ore mine site that contained 18K-year-old artifacts showing how people lived during the last Ice Age, an Australian Aboriginal group says.
    • Outrage over Rio's destruction last year of the Juukan Gorge ancient rock shelters considered sacred to indigenous people in Western Australia led to a management shakeup and a company promise to overhaul its heritage protection practices.
    • The new claims, in a submission to a government inquiry, concern different sites in the same region, near the Marandoo iron ore mine.
    • "We know we have a lot of work ahead to right some of these historical wrongs, which fell well short of the standards we expect today," the company says, without addressing the specific allegations.
    • In an effort to cope with the fallout from the Juukan Gorge controversy, Rio recently named an indigenous Australian to its board for the first time.
    • The UK's Competition and Markets Authority has opened a formal probe into Google (GOOGGOOGL) and Amazon (NASDAQ:AMZN) over concerns the companies aren't doing enough to combat fake reviews on their sites.
    • The CMA launched an initial investigation in May 2020 that looked at several platforms and their internal systems for identifying and mitigating fake reviews. The investigation "specific concerns such as whether Amazon and Google have been doing enough" to detect, investigate, and remove fake reviews and impose sanctions on offenders.
    • The watchdog is also concerned that Amazon isn't doing enough to prevent and deter sellers from manipulating product reviews by taking the positive reviews from another product.
    • The new probe will gather more information to determine if the companies broke consumer law by taking "insufficient action" against fake reviews. If the CMA decides the companies have violated the law, the watchdog can ask the companies to formally commit to policy changes or pursue court action.
    • "We are investigating concerns that Amazon and Google have not been doing enough to prevent or remove fake reviews to protect customers and honest businesses. It’s important that these tech platforms take responsibility and we stand ready to take action if we find that they are not doing enough," says CMA Chief Executive Andrea Coscelli.
    • Recent news: Amazon reportedly facing UK competition probe into data practices
    • CarMax (NYSE:KMX) shoots higher after the auto retailer cruises right past estimates with its FQ1 report.
    • Comparable retail used unit sales were up 99.1% compared to last year and were 16.0% higher than the level in 2019.
    • Gross profit per retail used unit was $2,205 and wholesale gross profit per unit was $1,025, a $268 and $47 per unit increase. Gross margin was 12% of sales vs. 11% last year and the consensus estimate of 12.5%.
    • During FQ1, CarMax opened two new locations, both in existing Florida markets.
    • Looking ahead, CarMax says it remains confident in its ability to meet long-term targets on revenue growth, total unit growth and market share gains. The company plans to open a total of 10 new locations in FY22. CarMax expects to grow its market share of national used auto market of cars zero to ten years old to more than 5% by calendar year 2025.
    • Shares of CarMax are up 6.15% premarket to $126.70 after the earnings topper.

  14. Nice head-fakes on Oil and Gasoline today – just to make sure everyone is stopped out:

        


  15. I have to go see the Dr for the first time in 2 years – we'll see how much damage a year of sitting on my ass has done.

    I'll catch up on the weekend.

    - Phil


  16. Doc/Phil – be careful……..I went to see my doc last week. She pronounced me healthy, then said, hey, there's a new shingles vaccine (shingrix) out, do you want it? Well, hell yes, I'm an epidemiologist, and shingles is bad. Let me tell you, that's one humdinger of a vaccine!


  17. Snow…the shingles vaccine knocked me on my tush….!

    Putting SPWR on our house….very excited.

    SRRA…another biotech that we have, and it will explode if it works. Data are due in Q1 2022.  No options unfortunately.


  18. Shingles/Snow – My mom got that, sucks.  I did not have Chicken Pox so I don't think I need it?

     

     

    • Nike is keeping the Dow (DJI) +0.7% comfortably higher, adding nearly 130 points to the price-weighted index on its own following strong earnings.
    • The S&P (SP500) +0.2% is still in the green, but the Nasdaq (COMP.IND) -0.1% is hugging the flatline as weak chip stocks take Info Tech (NYSEARCA:XLK) into the red.
    • Meanwhile, the Treasury market is breaking out of the malaise seen through the week, especially on the long end of the curve.
    • Traders at first seemed to shrug off the hottest core PCE since 1992, but the 10-year yield is now up 5 basis points to 1.54%.
    • And higher rats are expected by consumers, according to the University of Michigan's final June sentiment report, out today.
    • "The growing strength in the economy meant that nearly three-quarters of all consumers expected rising interest rates during the year ahead, the highest proportion since 2018 when the economy was near its last peak" Richard Curtin, Survey of Consumers chief economist, says in the report.
    • Nine of the 11 S&P sectors are higher, led by Financials (NYSEARCA:XLF) as banks rallied following the latest stress tests.

    • Panasonic (OTCPK:PCRFY) confirms that it unloaded its full stake in Tesla (NASDAQ:TSLA) before the end of March. The business relationship between Panasonic and the electric vehicle maker is not changing.
    • The Japanese company is looking to reduce its dependence on Tesla and raise cash for investments.
    • Panasonic bought 1.4M Tesla shares at $21.15 each in 2010 for about $30M. That stake was worth $730M at the end of March 2020, which was before Tesla's share price skyrocketed.
    • Seemingly related to the selling of its Tesla stake, Panasonic reported ¥429.9B yen in proceeds from the sale and redemption of investments as part of its last cash flow statement.
    • "The impact of crypto assets may have pushed Tesla's share price above its intrinsic value, making it a good time to sell," notes Ace Research Institute analyst Hideki Yasuda on the sale.
    • Panasonic closed the day up 4.93% in Tokyo. Tesla is up 1.29% in premarket trading in the U.S.
    • Yesterday: Electric vehicle stocks rally as Green Tidal Wave hopes are recharged.
    • Private equity firms are seeking to capitalize on the single-family home rental market as surging home prices make home ownership too expensive for many buyers.
    • In the latest example, KKR (NYSE:KKR) is forming a new single-family rental company, My Community Homes, that plans to buy and manage single-family rental homes in the U.S., Bloomberg reports, citing people with knowledge of the matter.
    • That's coming after Blackstone agreed earlier this week to buy Home Partners of America, a company that buys single-family homes then rents them out, while giving tenants an option to eventually buy the house.
    • In fact, KKR's credit arm previously backed Home Partners of America expects to generate ~20% internal rate of return from its 2014 and 2018 investments in the company, Bloomberg reported.
    • KKR is investing in the My Community venture through its real estate and private credit funds, according to the Bloomberg report. The number of homes and regions where it expects to operate weren't clear.
    • The new SFR company brings it into competition with Invitation Homes (INVH +0.3%), which Blackstone had originally backed, and American Homes 4 Rent (AMH +0.3%).
    • Earlier this year, homebuilder Lennar formed Upward America Venture with Centerbridge Partners and Allianz Real Estate to acquire single-family homes for rent in high growth markets across the U.S.

     

     

    • Virgin Galactic Holdings (NYSE:SPCE) jumps 34.45% as traded as high as $56.34 earlier in the session after the company landed full FAA approval for its commercial license for spaceflights.
    • The FAA approval was largely expected, but is still considered an important milestone for the company.
    • The rally today has pushed shares of Virgin Galactic back over the 50-day, 100-day and 200-day moving averages.
    • Short interest on SPCE is at an elevated level, which may be impacting today's buying action.
    • What is next for Virgin Galactic? The company has three test flights scheduled with a full crew before it begins flying passengers. The next test flight could occur as early as July and include Richard Branson.
    • Seeking Alpha author Joshua Sorto ran through the math on Virgin Galactic earlier this month.


  19. I am pretty confident in SRRA FYI…..Just don't know 'how well' it will work.


  20. Confident…not pretty confident… surprise


  21. hey Pharm, I remember you mentioned RMED a while back.  Do you have any updated thoughts on it?


  22. If you are up…I would only gamble.  Again, the technology for clearing plaques in the vessels works. Data were delayed to to COVID, but I expect them to pop, but monetizing it will be a challenge.


  23. That RMED pop was from RT traders.  Several 'dollar' biotechs did this.  GLTO was another that ran up for no reason.


  24. They are also selling more shares….@ $5.38


  25. Pharm……thoughts on LQDA?  


  26. Thanks for the response Pharm.  I took a glance at them on Yahoo Finance and noticed they seem to be having some issues.  Looks like executive compensation is high despite losing a lot of money and having a horrendous price history since they IPOd.




  27. Infrastructure deal now in doubt; GOP senators ‘blindsided’


  28. Pacific Northwest braces for historic heat wave, and experts say climate change could be to blame