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Watchful Wednesday – China Races to Battle the Delta Virus

Pull Me GIFs - Get the best GIF on GIPHYJust when we thought we were out….

China has had 483 cases of the Delta Virus in the past 2 weeks – more than they had in the first 5 months of the year.  15 of 31 Chinese provinces are reporting Delta cases.  According to Chen Xi, a professor of Public Health at Yale:

Once it reaches so many provinces, it’s very hard to mitigate.  I think this would be surprising and shocking to the rest of the world. Such a powerful government has been breached by Delta. This will be a very important lesson — we cannot let our guard down.”

For now, China has stuck to its strict playbook. Across the country, the government has instructed people not to travel unless necessary. In the cities of Zhangjiajie and Zhuzhou, 5.4 million people have been barred from leaving their homes. Roughly 13 million residents in the city of Zhengzhou, the site of deadly floods in July, had to stand in line for virus testing starting last weekend.

US investors are also following the same playbook as last year – ignorning the Delta Varient the same way we ignored Covid-19 (original recipe) back in March of last year.  After all, how could something all the way over in China affect the US markets, right?  

Money Printer GIFs - Get the best GIF on GIPHYOf course, now we know that, should the market begin to falter – the Government will jump right in and hand us Trillions and Trillions of Dollars and it won't have any sort of negative repercussions at all – not even inflation!  It is so great to live in this magical land where there are no consequences for our actions, right?  

35% of all the money in the World was printed in 2020.  If there's 35% more money and the same amount of goods, Econ 101 tells us that the price of goods will tend to INFLATE to match the greater money supply.  So far, in 2021, inflation is running at a 10% pace but the Fed says the inflation is "transitory" and all those stores and restaurants can't wait to mark those prices back down, right?  

Maybe that was a lesson in Econ 404 – I never made it that far as it was so boring but a very surprising twist if that's the way it turned out at the end.  Whether inflation is transitory or not matters a lot as we are now entering the peak of the Baby Boomers retiring.  2023 is going to be our biggest year with over 7.5M Americans (2.5% of the population) turning 65 in a single year.  We remain near that pace until 2029, when things start to drop off but the damage will be done with over 75M people (1/4 of the population) hitting retirement age in the next 10 years.  

Line Graph showing The Aging U.S. Population for both males and females by people turning 65 each day in thousands

What is your plan to support these people?  If you don't have a plan to support them, what is your plan to deal with the deaths from starvation, disease and poor living conditions?  How will you deal with the protests and the riots and the social upheaval?  Where will you find the workers to replace them?  How will we support Social Security and Medicare with 1/4 of the contributors going from paying into the sytem to being paid by the system?  

Everything is fine until it isn't.  Miami will be underwater in 2050 but people are still buying beachfront condos and, at the current pace, our Social Security system will run out of money in 2035, but that was calculated using 2% annual inflation rates.  At 10%, we won't last this decade.  So inflation better be "transitory" or we're totally screwed.  

We also still need $2.6Tn just to FIX the Infrastructure that already exists in the US.  That does not include improving our grid, our Internet and it doesn't even include clean energy projects as that's under the $10Tn we need to get to Carbon Neutral by 2035 – in order to save the planet.   

That's quite a shopping list we have and Congress is currently finalizing a 6-month debate over $500Bn in Infrastructure Spending (was $3.5Tn when they started) and we still haven't passed a budget for 2021.  We're already running a $1Tn deficit going forward but this year it will be over $3Tn due to the prior stimulus (the thing we'll need more of to prop up the market if Delta spreads).   

And we NEED more stimulus as, now that we are past most of the large-cap earnings, the small-caps are starting to look shakey.  Last night, we had misses from BNFT, CDLX, DCPH, ET, HTA, H, KAR, NBIX, OSUR, PRIM, PUMP, TSLX, SKLZ, VRSK and WTI and we had guide-downs from ATVI, AKAM, BNFT, CDLX, FMC, JAZZ, MCRY, NPTN, OSUR, PRO, SPWR, VREX and WK.   That's 25 out of 100 reports with negatives in them!   10% is usually considered alarming….

ISM and Construction Spending missed on Monday, Mortgage Applications were down 1.7% this morning and ADP missed by a mile (300,000 vs 700,000 expected by leading Economorons)  and we're waiting for IHS Service PMI and ISM Service Reports but Friday we get Non-Farm Payroll and, if that's as much below 900,000 as ADP was – BIG TROUBLE!  

Outside of Consumer Spending, Contruction Spending is the backbone of this economy and, as you can see from this chart – it's not very pretty. Even with TRILLIONS of Dollars in stimulus, we're still not even as strong as the weakest pre-pandemic months and we haven't even begun kicking 10M families (10%) out of their homes as the eviction moratorium expires.  Who will move in to fill up those spaces?  10M recently evicted families with bad credit and no money for deposits?  Immigrants?  Oops, we don't have those anymore and we're not making any new Americans either with negaive birth rates in 2020.

Less people, less homes, less money…  Hey, maybe this inflation is going to be transitory – no one can afford it long-term!

 


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  1. Good Morning.


  2. Good morning everyone. Here is the link to today's webinar

    https://attendee.gotowebinar.com/register/4176247944779938319


  3. Good morning


  4. Phil/PFE for 2023 i’ve got 2 dividend positions each with 

    1000PFE at 31.3

     

    and -10 33C at 8.2 and 33P at 4.78

     

    also -10 37C at 3.08 and 35P at 4.13

     

    and 1 LTP position 

    2023 and 10 of 

    +25C at 11.88/-35C at 5.37, funded by -5 of 37P at 7.05.

     

    already doing well, however a bit small so i’m inclined to cash out and do something bigger for PFE. what do you think? Tia


  5. Interesting Play 7/28 I set up a Play for  AMGN Buy the stock and sell the Aug 21 240 call My cost per 100 shares were 236.25. 

    AMGN is trading today for 235.50 so .75 cents below my cost price. Well this is after the following remarks:

    Amgen (AMGN) earned an adjusted $4.38 per share for its latest quarter, compared with a consensus estimate of $4.09. The biotech giant's revenue topped analyst estimates as well, although it said visits and procedures remain below pre-pandemic levels. Amgen also said it is in a dispute with the IRS, fighting a claim that it owes $3.6 billion in back taxes.

    It shows you how you can still come out more or less even by selling a deep in the money call with still good extrinsic value.

    We will see how the stock will recover after today.


  6. I see AMGN it is even dropping further as all sheep are jumping over the cliff. I did not mention I will still be in for the div. 1.76 on the 8/16/21!!!!


  7. Comment content omitted because it is too long.


  8. The next play is the buy stock and sell the 225 Sept. caller for a cost of 222.85. the caller still has an extrinsic value of 2.16.


  9. Good morning!

    Things are crazy already with the Dollar swinging manically:

     

        

     

     

    It's not a net rise though – so not so much more downside pressure.


  10. Generally, though, the indexes are under pressure:

       

    Services PMI were in-line and ISM Services were BTE so nothing to get too upset about.  

    • A big rally in nominal and real Treasury yields will leave U.S. equities in an unfavorable position compared with other regions, Citi says.
    • Calling the recent rally in government bonds "largely technical," Robert Buckland, chief global equity strategist at Citi, is forecasting the 10-year Treasury yield (NYSEARCA:TBT) (NASDAQ:TLT) to rise to 2% through 2022, with real yields rising 70 basis points.
    • The 10-year is currently up 2 basis points to 1.2%, while the 10-year TIPS (NYSEARCA:TIP) is just above a record low, down 2 basis points to -1.21%.
    • "What is the bond market trying to tell us?" Buckland writes in a note. "Is it worried that the Delta Covid variant may hold back global economic recovery? Is it now convinced that the current inflationary upturn is transitory? Or does curve flattening (short yields up, long yields down) suggest potentially over-zealous monetary tightening, that a 'policy mistake' is now imminent? Maybe the bond markets are worried about a China slowdown?"
    • "Citi US rates strategists are not especially convinced by these tempting narratives," he says. "Instead, they attribute much of the move to technical factors. Most notably, US treasury issuance has dropped over the summer, but will rise again later in the year. They think that this, along with ongoing economic recovery and likely QE tapering, will push 10-year bond yields back towards 2.0%."
    • "We factor this bearish bond view into our global equity strategy," he adds. "Amongst regions, we downgrade the Tech-heavy US to Neutral. We upgrade Japan to Overweight, where valuations and cyclical exposure should be supportive, along with a weaker yen. We remain Overweight UK equities, our favourite value trade."
    • "Amongst global sectors, we downgrade real yield-sensitive IT to Neutral and raise Health Care to Overweight. We remain Overweight Financials and Materials, which should outperform as bond yields rise."
    • Citi strategist Tobias Levkovich, who has a target of 4,000 for the S&P 500 (SP500) (NYSEARCA:SPY) for 2021, says central banks have been keeping rates repressed since 2008, which indcates that they do not have confindence in sustainable growth and keeps risk premiums high.
    • In 2008, the U.S. equity market was 30% deep cyclicals and 30% secular growth, he said on Bloomberg. But now it is 55% to 15% in favor of growth.
    • "If you think bond yields are going to go higher, then growth stocks are probably going to take it on the chin."
    • A big nonfarm payrolls number could jolt yields higher, but today's ADP showed a much-smaller-than-expected rise.


  11. Are you willing to not get your booster shot so others can get their first shots?  

    • The World Health Organization ("WHO") today is calling for a moratorium on countries considering giving COVID-19 booster shots through at least September so poorer countries can gain access to the vaccine, The Washington Post .
    • "We cannot and should not accept countries that have already used most of the global supply of vaccines using even more of it while the world’s most vulnerable people remain unprotected,” WHO Director General Tedros Adhanom Ghebreyesus said at a news conference today.
    • Some European countries say they plan to begin administering booster shots.
    • In the U.S., a CDC committee last month discussed giving booster doses to immunocompromised individuals.
    • Pfizer (PFE -1.2%) has also been pushing the U.S. government to grant an Emergency Use Authorization for booster doses.
    • Vaccine maker: BioNTech (BNTX +7.4%), Moderna (MRNA +4.0%), Johnson & Johnson (JNJ -0.4%), and AstraZeneca (AZN -0.2%).

    Ah ethics….

    • Toyota Motor Corporation (TM -2.3%) trades lower despite besting analyst estimates with its FQ1 report and notching a record profit tally for the quarter.
    • Investors seem to be focused on the COVID-related production updates from the Japanese automaker.
    • Toyota (NYSE:TM) has suspended production at an assembly line in Guangzhou that it operates with Guangzhou Automobile and halted production at three separate factories in Thailand due to parts shortage, per Reuters.
    • For FQ1, Toyota's operating profit jumped to ¥997.5B ($9.15B) vs. ¥752B consensus. However, Toyota held its full-year forecasts due to the pandemic uncertainty.
    • Dig a bit further into Toyota's earnings report.
    • Investors drove Lyft (NASDAQ:LYFT) shares down as much as 8% Wednesday as concerns about the company's revenue outlook outweighed what was a generally positive second-quarter earnings report.
    • At issue was Lyft (LYFT) saying on Tuesday that it expects its third-quarter revenue to be in a range of $850 million to $860 million. Wall Street analysts had earlier estimates the company would report $869.1 million for the quarter that ends in September. On a conference call, Chief Executive Brian Roberts said the ride-sharing company anticipates ride prices to be lower than during the second quarter of this year.
    • Those ride fares were a big reason why Lyft (LYFT) reported second-quarter revenue that topped analysts' estimates. The company reported active rider revenue of $44.63 per rider compared with $39.06 per rider year ago. Total revenue of $765 million was more than double that of the second quarter of 2020, and also topped analysts' forecast for $701 million in sales.
    • Analyst Dan Ives, of Wedbush, said that while Lyft's (LYFT) shares retreated following the company's forecast, the forecast include's company plans to keep investing in incentives to attract new drivers to its service. "We see the added incentives in the near-term as a positive, and an effort [for the company] to capture as much demand as it can on its platform as the reopening moves forward," Ives said, in a research note.
    • Ives maintains an outperform rating and $85-a-share price target on Lyft's (LYFT) stock.
    • In addition to reporting better-than-expected second-quarter sales, the company also turned in an adjusted EBITDA profit for the first time, with EBITDA earnings of $23.8 million during the period that ended June 30.
    • Lyft's (LYFT) top rival, Uber (NYSE:UBER) was down by 2.2% ahead of its second-quarter results, which are scheduled for after the close of trading on Wednesday.
    • Ford Motor (F -2.3%) reports U.S. sales down 31.8% Y/Y to 120,053 vehicles in the month of July.
    • Truck sales was down 27% Y/Y to 72,574 units, Car sales down 74.5% Y/Y to 4,365 units, and SUVs -27.3% Y/Y to 43,114 units.
    • Total retail sales -37.7%: Truck -34.5%, Cars -78.7% and SUV -30.5%.
    • Ford’s electrified vehicle sales were up 57.5% on sales of 9,103 vehicles with expanding presence in California; Mustang Mach-E sales were up 15.8% to 2,854 and F-150 PowerBoost Hybrid sales up 23.4% to 4,498 compared to June.
    • F-150 Lightning reservations exceeded 120,000.
    • "In addition to the sales we delivered in July, our retail order bank increased over 70,000 units, excluding our Bronco and Maverick retail orders, which is 10 times higher than we were a year ago. Our newest products, including F-150 PowerBoost, Mustang Mach-E, Bronco and Bronco Sport, are conquesting at a rate that is almost 14 points higher than Ford overall. With our strong portfolio of new products, robust transaction pricing and a big order bank, we are perfectly positioned for significant growth as the semiconductor chip situation improves," says Andrew Frick, vice president, Ford Sales U.S. and Canada.
    • In the earnings result announced last week, Ford boosted its expectation for full-year with volumes expected to increase by about 30% sequentially.
    • The latest commercial registration trend in European Union shows 12.4% growth to 185,573 units in June
    • Mary Barra, chair and CEO of General Motors (NYSE:GM), expressed confidence in the wake of the company's poorly received Q2 results that it will have a strong rest of year, despite "some unknowns" related to COVID and the global chip shortage.
    • Speaking to CNBC on Wednesday, Barra said it took "resiliency and creativity" on the part of the company's employees to overcome the semiconductor shortage and secure a profit for its latest quarter.
    • Earlier in the day, GM announced its Q2 results, posting a profit for the three-month period compared to a loss in the same timeframe last year. The company also raised its guidance for the full year.
    • Despite the ongoing chip shortage, Barra said the launch of new GM electric vehicles, including the EV version of the Hummer, remained on track.
    • Commenting on the recall of its Chevy Bolt due to potential fire hazards, Berra noted that the problem stemmed from a combination of two manufacturing flaws appearing in the same battery.
    • She said that future EV brands will use a new battery system, meaning the issue won't persist in other models.
    • Barra also repeated the company's plan to be all EV with light-duty vehicles by 2035.
    • GM slipped more than 7% in Wednesday's intraday action, despite the quarterly profit and the raised guidance. The dip took shares to $53.54.
    • The stock has generally moved sideways over the last few weeks, holding steady after coming off a 52-week high of $64.30 in early June.


    • Jefferies warns that the Macau sector is likely to remain under near-term pressure as COVID-related travel restrictions continue to increase and visitations are capped.
    • "We expect GGR rebound to be delayed further. The update challenges the investability of Macau-oriented names, thus we prefer US names, given faster recovery and catalysts, notably MGM and CZR," updates analyst David Katz.
    • It was only a few months ago that analysts were circling August and September on the calendar as breakout months for Macau gross gaming revenue. The National Day holiday period in October is also looming.
    • Macau watch: MGM Resorts (NYSE:MGM) is down 14.6% over the last month, Las Vegas Sands (NYSE:LVS) is off 24.4%, Melco Resorts & Entertainment (NASDAQ:MLCO) is down 22.2% and Wynn Resorts (NASDAQ:WYNN) is 21.7% lower over the 30-day period.
    • While the sector has hit a rough patch, MGM Resorts (MGM +3.1%) is breaking higher today after a deal was struck to sell MGM Growth Properties to VICI Properties.

    • CVS Health (CVS -2.4%) is trading lower despite announcing better-than-expected Q2 2021 financials and a guidance raise that topped analyst estimates for 2021.
    • The weakness is attributed to the comments made by the company CFO Shawn Guertin at the earnings call.
    • The combined effect of the diminished outlook for vaccines, slightly higher medical benefit ratio (MBR), and health care benefits has made the pandemic “a modest negative,” for 2021, CFO has reportedly said.
    • According to CNBC, the company would also focus on investments in future growth rather than initiating a dividend increase or share buybacks.
    • The rivals of CVS Health (NYSE:CVS) such as Rite Aid (RAD -3.2%) and Walgreens Boots Alliance (WBA -1.7%) are also moving lower in morning hours.
    • The medical benefit ratio, the portion of premium revenue spent on healthcare services, stood at ~84.1% for CVS in Q2 2021 compared to ~70.3% in the previous year’s quarter and ~83.2% in Q1 2021.

    • Robinhood Markets (NASDAQ:HOOD) jumps 65% after the stock resumes trading.
    • Nasdaq briefly halted trading in the stock from 9:35 AM to 9:40 AM ET.
    • CNBC's Jim Cramer has been touting the stock and floating the idea that the stock trading app company should buy "Buy Now, Pay Later" company Affirm (AFRM +2.6%).
    • That coincides with Cathie Wood's ARK Innovation ETF adding to its stake in HOOD.
    • Earlier this week, Square's agreement to buy Afterpay raises Affirm's profile as a takeover target.
    • July U.S. PMI Composite (Final): 59.9 vs. 59.7 consensus and 63.7 prior.
    • The latest upturn in business activity was marked overall, despite easing to a five-month low. Greater output was linked to strong demand conditions and a sustained increase in new orders. Some companies stated that capacity constraints hampered activity growth, however. New business continued to rise in July, and at one of the fastest rates since data collection began in October 2009.
    • Services PMI: 59.9 vs. 59.8 consensus and 64.6 prior.
    • “The pace of US economic growth cooled in July, according to the final PMI data, but remained impressively strong to suggest that GDP will rise robustly again in the third quarter. Stimulus measures combined with the vaccine roll out and reopening of the economy continued to boost demand for goods and services, most notably among households and especially in consumer-facing services such as travel and hospitality," said Chris Williamson, Chief Business Economist
    • Lumber Liquidators Flooring (LL +4.1%) shares rose today after beating earnings. The company had comparable sales of growth of 31.3% and improved operating margin by 290bps compared to the same quarter in 2020. Compared to 2019, those numbers improved by 10% and 600bps, respectively.
    • The strong results were driven by "increasing traction on our transformation initiatives as well as continued strong demand for home improvement projects and consumers’ growing comfort allowing contractors into their homes," said CEO Charles Tyson.
    • The company is cautious concerning COVID-19 related supply chain disruptions and higher transportation and material costs and declined to provide financial guidance given the uncertain circumstances.
    • LL Flooring repaid all $101M of outstanding debt during the quarter and will be focusing on rebuilding inventory and maintaining disciplined expense management.
    • Read about other stocks that could see major price swings in Seeking Alpha's catalyst watch here.


    • Live Ventures (NASDAQ:LIVE) has cratered, sinking 48.2% out of today's open after the SEC accused the company and top executives of disclosure violations.
    • CEO Jon Isaac (along with the company) is charged in the SEC complaint with recording income from a backdated contract in order to boost pretax income for fiscal 2016 by 20%. They also are alleged to have overstated earnings per share by 40% by understating outstanding shares.
    • Meanwhile, the SEC says Isaac and Chief Financial Officer Virland Johnson took part in a scheme to mispresent the effective acquisition date of a new subsidiary from Appliance Recycling Centers of America that swung the company to a profit in the first quarter of 2018 – and that they lied to auditors about the acquisition date.
    • For its part, Live Ventures "categorically denies all charges and will vigorously defend itself."
    • The company asserts that the SEC’s pursuit of this matter will not result in any benefit to investors and instead will only serve as a distraction from core business. … The company looks forward to its day in court and vindication at trial.

    You've got to love analysts:

    Live Ventures: A Massively Underpriced Holdings Company, The Market Has A Lot Of Catching Up To Do

    Live Ventures: A Mini Berkshire, Price Target $198

    Did The Underlying Business Drive Live Ventures' (NASDAQ:LIVE) Lovely 593% Share Price Gain?

    Live Ventures Expands into Financial Services Industry with Agreement to Acquire Salomon Whitney LLC

    Live Ventures (NASDAQ:LIVE) Is Investing Its Capital With Increasing Efficiency

    Live Ventures Extends Stock Buyback Program


    • Victoria's Secret & Co. (NYSE:VSCO) is seeing a wave of bull ratings pour in following the retailer's break from Bath & Body Works under the old L Brand umbrella.
    • Bank of America calls VSCO a promising retail turnaround with inexpensive valuation and new categories for growth. The firm assigns a Buy rating and price objective of $75.
    • Analyst Lorraine Hutchinson: "We expect revenues from new product launches to offset the impact of reduced store fleet size as VSCO continues to trim less productive stores. In 2023 (the first normalized year post-COVID), we model sales +4%, EBIT +4% (margins 12.5%) and EPS +10% as VSCO uses excess Free Cash Flow to buy back stock. We think each of these metrics could have upside potential in the case of a better turnaround."
    • MKM Partners also starts off VSCO with a Buy rating and sets a price target of $88, while Wells Fargo is in with an Overweight rating and price target of $100. Morgan Stanley slotted VSCO at Overweight yesterday.
    • Shares of Victoria's Secret (VSCO) are up another 5.05% premarket after gaining 21.31% yesterday in its debut.

     

     

    • Royal Caribbean (NYSE:RCL) is lower in early action after missing consensus marks with its Q2 report.
    • The cruise line operator updates that 36 ships across five brands have either resumed sailing or announced their intention to resume sailing by August 31. That is about 60% of the total fleet capacity. RCL anticipates 80% of its fleet to be back in service by the end of the year, which may be a lower level than investors anticipated. On the cost side, Royal Caribbean (RCL) says as it continues to ramp up operations, it expects to incur "incremental spend" related to bringing ships back to operating status, returning crew members to ships and implementing enhanced safety protocols. Those extra COVID-19 costs and overall cash burn rate could also be higher than what investors anticipated just a few weeks ago.
    • The new bookings update from Royal Caribbean (RCL) is very positive. By June, the company notes it was receiving about 90% more bookings each week when compared to Q1 with improvements of a similar magnitude for both 2021 and 2022 sailings.
    • Shares of RCL are down 2.27% premarket to $72.80, while peer Norwegian Cruise Line Holdings (NYSE:NCLH) is off 1.85% and Carnival (NYSE:CCL) is down 1.40%.
    • Compare valuation marks and Quant Factor Grades on CCL, RCL and NCLH.
    • BeyondSpring (NASDAQ:BYSI) soars 332.5% premarket after announcing positive topline data of DUBLIN-3 trial in plinabulin in combination with docetaxel (DP) to treat 2nd and 3rd line NSCLC (EGFR wild type) compared to docetaxel alone (D) (n=559).
    • The combination met the primary endpoint of increasing overall survival (OS) (mean OS, p=0.03; OS log rank: p <0.04).
    • The study also met key secondary endpoints, including significantly improving ORR (p<0.03), PFS  (p<0.01) and 24 (DP: 22.1% vs. D: 12.5%; p <0.01) and 36 (DP: 11.7% vs. D: 5.3%; p = 0.04) month OS rates, and significant reduction in the incidence of Grade 4 neutropenia.
    • No unexpected AE concerns were identified.
    • “A pre-NDA meeting will be scheduled with the FDA in 2021 to agree on the contents for our NDA, to support a NSCLC indication NDA submission in the first half of 2022," said Dr. Lan Huang, BeyondSpring's co-founder, CEO.
    • The first NDA submission of plinabulin in CIN prevention is under FDA priority review with a PDUFA date of November 30, 2021.

    • ADP Jobs Report: +330K vs. +700K consensus and +692K prior (unrevised).
    • July's 330K job gain was the weakest since February's 180K. Leisure & Hospitality jobs led the way, with 139K jobs added. Education & Health saw 64K new jobs.
    • ADP chief economist Nela Richardson: "Bottlenecks in hiring continue to hold back stronger gains, particularly in light of the new Covid-19 concerns tied to viral variants. These barriers should ebb in coming months."
    • Bonds appear to be reacting to the news, with the 10-year Treasury yield now off a full four basis points to 1.135%. The iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT) is higher by 0.45% premarket. The dollar (USDOLLAR) has given up a bit of ground, with UUP off marginally premarket.
    • Tellurian (NASDAQ:TELL) slumps 12.5% in premarket trade after pricing its earlier announced public offering of 35M shares for total gross proceeds of $105M.
    • Underwriters granted 30-day option to purchase up to 5.25M shares.
    • Net proceeds to be used for general corporate purposes, including the potential acquisition of upstream assets.
    • Offer is expected to close on or about Aug.6
    • Royal Caribbean Cruises (NYSE:RCL): Q2 Non-GAAP EPS of -$5.06 misses by $0.68; GAAP EPS of -$5.29 misses by $0.79.
    • Revenue of $50.91M (-71.0% Y/Y) misses by $89.45M.
    • The average monthly cash burn rate for the second quarter of 2021 was approximately $330 million, slightly higher than the prior quarter as the Company returned additional ships into operation.
    • "We're thrilled to be back on the water at accelerated speed in the US and elsewhere. After 16 months of being at a virtual standstill and another painful financial result this quarter, the flywheel is clearly picking up momentum," said Richard D. Fain, Chairman and CEO. "Since the pandemic began, our objective has been to make our ships safer than Main Street, and today, we are proving that ambitious goal is achievable. We are also encouraged by the booking outlook especially for 2022 and beyond."
    • Press Release

    The problem with that logic is that we don't spend 7 consecutive days on Main Street during a pandemic – that would be foolish so "safer than Main Street" is not safe enough to stuff 9,000 passengers and crew into a ship that's 1,000 feet long.  Even with 12 decks and call it 300 feet wide – that's 3.6M square feet/9,000 =  400 feet per person of enclosed space for a week.  Then consider the bottom few decks are not for living, nor are the top two and the middle of the ship is hollow on the big RCL ships and you're probably breathing, at most, 200 sq feet of your own air – sometimes.


  12. PFE/Stuart – Hard to say what "small" is.  You have a nice position – it's likely to get called away at some point and you'd be left with the short puts but there's no reason to do anything if it's small and you don't need the cash or margin.  June 2023 puts are out but it's too early to say where the prices are.  The short $45 puts just sold for $6.30 so net $38.70 would be your re-entry price if you cashed in the stock at net $33 and bought back the short $33 puts for $1 but is there really a point to that?  You got in at a great price and you made your money and now PFE isn't cheap so why do you feel compelled to chase it?   

    One thing you could do is cash out the stock at $45 and buy the June 2023 $30 calls at $15 to cover your short calls.  When they expire, you can cash out or roll them but you'd put $30 back to work now and you can wait for a dip to sell new puts (I'd buy back the existing short puts now) for more like a net $33ish re-entry.  It's a move that's very unlikely to hurt you and, if you want to be more aggressive, buy a few more 2023 $30 calls than you need – you can always cover those if $45 doesn't hold (I don't think it will).  

    AMGN/Yodi – Well, $3.6Bn is nothing to sneeze at though they do make $9Bn a year against a $140Bn market cap.  If you treat it like any one-time catastrophe, you subtract $360M off earnings going forward (10 years) and it's not much BUT what if the way they account for profits is wrong and they always need to pay more tax going forward?  Then we could be closer to 10% less profits and that can account for the drop.  Either way, great company, steady 5% revenue growth and improving margins – nothing to throw away.

    Almost looks like a good Butterfly play, actually – nicely channel-bound.  


  13. I like this:

      Titanic Symphony of the Seas Empress of the Seas
    Year 1911 2018 1990
    Length 882 ft 1,184 ft 692 ft
    Width 92 ft 215 ft 100 ft
    Decks 10 15 11
    Gross Tonnage 46,328 228,082 48,563
    Passengers 2,435 6,680 2,270
    Crew 892 2,200 668

     


  14. anyone of have any ideas on which company will develop a oral vaccine for cov-19  first

    ?


  15. SPWR miss – anything on the report that changes our "Stock of the Decade" thesis? Or just patiently adjust the dip.


  16. tech question - 

    say a stock is in a downward channel.  Prices are moving consistently lower over many session – and, every time it rallies to the upside, the RSI gets overbought really quickly and then it crashes back down again.  What is happening to cause this?

    thanks!


  17. Oral/QC – They haven't even got an oral flu shot so how are they suddenly going to do oral covid?  Even the nasal sprays take years to develop but I'd look at those guys as most likely to adapt.

    SPWR/Pman – All good.  They do such big projects that it really depends on which quarter they land in and there's no good way to control that at the moment – as each job is a significant portion of revenue.  They guided down for next Q as well due to chip shortages but still on track for the year so investors don't care – day-traders do.   

    Solid Q2 Execution Drives Improving Confidence in 2021 Forecasts

    Strong Balance Sheet - Best in SunPower History

    Solid Execution in CIS – Strong Backlog Growth

    Attractive Industry Drivers Underlie Future Residential Opportunity

    It's still early in the decade by my reckoning…

    Universal Solutions Provider with Whole-Home Energy Products

    $50,000 per home, 1/3 of 110M homes is 35M is $1.75Tn market that SPWR is an early leader in so let's say it takes 20 years to develop is $87Bn/yr and figure a 10-year run-up until we're hitting that kind of pace.  What's SPWR going to get?  10% is $8.7Bn/yr and they are at $1.5Bn now.  Even 1% would pop their sales by 50%.  So yes, I still like them for the long run.

    RSI/Monk – Complicated so later.

    Webinar time!


  18. SPWR / I can only speak more generally to the renewable energy atmosphere as opposed to the specifics of SunPower.  Batteries are coming (soon) and that is a game changer.  From CATL's Na-Ion battery that was announced a few days ago to Form Energy's announcement of an Fe-Air battery, storage is around the corner.  With Solar and wind being the cheapest methods of adding power to the grid, I expect no real slowdowns.  The only thing that changes the equation much is if perovskite's end up displacing a substantial amount of Si based solar manufacturing. If perovskites take off though, SPWR will end up buying one of them because tandem cells will be the only game in town.

    The other interesting thing to keep an eye on is the development of new TEC materials which could breath new life in to a lot of traditional energy production.

    Good TEC article: https://pubs.acs.org/doi/10.1021/acs.chemmater.0c03657#

    CATL Na-Ion Battery: https://www.reuters.com/business/energy/catls-new-sodium-ion-battery-help-ease-lithium-shortages-2021-08-03/

    Form Energy Fe-Air Battery: https://formenergy.com/technology/battery-technology/

    Perovskites: https://en.wikipedia.org/wiki/Perovskite_solar_cell


  19. Hi All, Please log off and log back in to the webinar. Phil is on and live


  20. 10% inflation is transitory on our way to 40%. What do you guys think of COWN? Nice revenue growth and 3.6ish PE. As a stock not their analysts.  Analysts suck like everyone's. 


  21. AMD and MRNA are wowser 5-year charts


  22. COWN   nice premium on the June options    The June  $40 call pays $6.20    protection on a buy write down to $33.24


  23. Phil/VIAC

    20 '23 $35c @ $12.6

    -10 '23 $40p  @ $9

    Haven't sold the short calls  yet ..   would you roll the longs down to say $30s down here?

    Thx!


  24. Good info JPH, thanks for sharing.

    COWN/Dawg:

    Cowen (COWN) is a company most of us have heard of but none of us have given a second thought.  I was looking over some financials and they came up and I noticed that their strong run to $34.13 is well-deserved as that's still just a $1Bn market cap and COWN has grown to $1.8Bn in revenues and dropped $200M to the bottom line last year so p/e about 5 still.   They took a lot of business during the pandemic and they aren't giving it back (as they are still tiny compared to other IBanks) and I think they are consolidating for a move higher.  Since they are a Bankster of the Future, we can add them to our Future is Now Portfolio as such:

    • Sell 5 COWN June 2022 $35 puts for $5.50 ($2,750)
    • Buy 10 COWN June 2022 $35 calls for $9 ($9,000)
    • Sell 10 COWN January $40 calls for $5 ($5,000) 

    That's net $1,250 on the $5,000 spread but we have 7 months to roll the short Jan $40 calls so I'd say at least the June 22 $45s, which are already $5 and hopefully the $50s and then we'd have a $15,000 spread but. for now, we'll call it a $3,500 (280%) upside potential – which does not suck.  

    Hasn't gone anywhere yet:

    COWN Short Put 2022 17-JUN 35.00 PUT [COWN @ $39.36 $0.12] -5 6/9/2021 (317) $-2,800 $5.60 $-1.30 $-5.60     $4.30 - $650 23.2% $-2,150
    COWN Long Call 2022 17-JUN 35.00 CALL [COWN @ $39.36 $0.12] 10 6/10/2021 (317) $9,000 $9.00 $-1.00     $8.00 - $-1,000 -11.1% $8,000
    COWN Short Call 2022 21-JAN 40.00 CALL [COWN @ $39.36 $0.12] -10 6/9/2021 (170) $-5,150 $5.15 $-0.70     $4.45 - $700 13.6% $-4,450

  25. VIAC/Wing – If it can be done for $2.50 or less, sure.