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Wednesday Worries: Durable Goods, Investor Confidence and Business Uncertainty

Durable goods are down 0.1%.

That's down from up 0.8% last month.  Notice we haven't had big numbers since last Summer and that's only because they measure against the previous months and last Sping was a complete disaster.   Durable Goods is a volatile measure and, ex-transportation, we are up 0.7%, so it's not terrible – just disappointing.  

Later we get the Investor Confidence Report, which you would imagine must be high with the S&P around 4,500.  We also have the Business Uncertainty Report coming up and, if Business Optimism is any indicator – it's not going to be good as we took a very ugly turn in the recent report:

United States: NFIB Small Business Survey : Moody's Analytics Economic View

Businesses are, of course, worried about being shut down again due to Covid and people are worried about catching Covid from their maskless customers.  Imagine being a waiter or a teacher or any of those jobs where you are surrounded by people all day long – those people should get combat pay!  

In nod to Delta variant, Fed moves Jackson Hole meet online | ReutersWe get the GDP Report tomorrow and that covers last Quarter, before we got a real bite from the Delta virus so things should be good there.  Powell will speak at the now-virtual Jackson Hole conference because Teton County, where the event takes place, hit the highest risk level on the CDC's scale for the outbreak.  If it were a country, US citizens would be banned from traveling there…  

So the World's 2nd largest economic conference is cancelled during an ongoing economic crisis and the market would seem to not possibly care less.  Of course, Wyoming are a bunch of ameteurs at catching Covid compared to my home state of Florida, where we have now blasted past last summer's record infection rate by 50%!  Now THAT is a good reason to cancel a conference but, of course, we cancel nothing!

Russ is playing in Miami this weekend and Gary Allen will be over at the Hard Rock Casino along with dozens of other super-spreader events – and we have a holiday weekend coming up and that should really pack the people in.  Can Florida hit 2,000 cases per day in time for the Holidays?  We can do it!  


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  1. Good Morning.

  2. Good morning!

    Nordstrom's (JWN) getting whacked despite beating on earnings:

    • July Durable Goods: -0.1% vs. -0.2% expected and +0.8% prior.
    • The headline durable goods number slips after two straight months of increases.
    • Transportation equipment drove the decrease, falling 2.2%, its first decline after two consecutive months of increases.
    • Excluding transportation, new orders +0.7% vs. +0.5% expected and % prior (revised from +0.3%).
    • Shipments of manufactured durable goods in July, up in four o of the last five months, rose 2.2%, following a 1.6% increase. Transportation equipment, up two straight months, increased 4.6% to $75.9B.
    • Unfilled orders for manufactured durable goods, rising for six straight months, increased 0.3% to $1.23T. Machinery, up 16 straight months, led the increase, rising 2.1% to $109.2B.
    • Nondefense new orders for capital goods in July fell 8.0% to $80.6B; shipments increased 0.4% to $79.4B; unfilled orders rose 0.2% to $742.2B.
    • On Tuesday, Democrats break stalemate in $3.5T budget resolution, $1T infrastructure plan

    I missed that earlier.  This was all about Defense spending and not Consumer.  

    Global crypto market will more than triple by 2030: Allied Market Research

    • The global cryptocurrency market is projected to more than triple to $4.94B by 2030, from an estimated $1.49B in 2020, with a compounded annual growth rate of 12.8% between 2021 and 2030, according to a report from Allied Market Research.
    • International crypto transactions and improved transparency in global payment systems will support the increased demand, Allied Market Research said.
    • Although the transaction segment will see the fastest growth, crypto mining made up two-thirds of the industry's 2020 size, and it's expected to remain dominant through 2030.
    • By region, the Asia-Pacific crypto industry will be the fastest growing due to increased competition from a growing number of exchanges, Allied Market highlights.
    • Key publicly traded companies supplying the crypto industry include Intel (NASDAQ:INTC), Nvidia (NASDAQ:NVDA), Advanced Micro Devices (NASDAQ:AMD), and Xilinx (NASDAQ:XLNX).
    • Another study from Allied Market projects the crypto asset-management market will grow to $9.4B in 2030 from $670M in 2020, Coindesk reports; Asia-Pacific will also see the most growth as there are many crypto mining operations in the area.
    • In the crypto market, Bitcoin (BTC-USDfalls 3.2% in the past 24 hours as it continues to consolidate under $50K resistance.
    • Ethereum (ETH-USD) declines even more by 5%, Cardano (ADA-USDfalls 4.8%, and Binanace Coin (BNB-USD) is down a mere 0.7%.
    • Previously, (Aug. 23) Bitcoin could go much, much higher than $100,000 by year-end - Anthony Pompliano.
    • Cowen downgrades Boston Beer (NYSE:SAM) as it warns of a summer seltzer slump that could lead to category growth softness and earnings disappointment for the beverage company.
    • "While SAM is gaining more share than we'd expected, the category is slowing more dramatically than we'd modeled. We don't see an on-premise recovery as a sufficient offset," updates analyst Vivien Azer.
    • Azer observes that hard seltzer revenue declined 0.4% for the four-week period ending on August 14, marking the first ever decline the firm has seen for the category.
    • Shares of Boston Beer (SAM) are down 3.62% premarket to $586.11.
    • Yesterday, the long-term potential for SAM was defended by Bernstein.
    • Argus downgrades Beyond Meat (NASDAQ:BYND) to a Hold rating after having it lined up at Buy.
    • Analyst John Staszak notes Q3 revenue guidance from BYND fell below the consensus expectation, driven by labor shortages, a July 4 shift and decelerating foodservice revenue growth. "Moreover, we expect concerns about the Delta variant to have a negative impact on Foodservice sales," he notes.
    • As Beyond Meat invests in long-term growth and adds capacity, near-term margins are expected to be negatively impacted. Argus keeps a long-term Buy rating on BYND for investors with the patience to ride out the rough road ahead.
    • Shares of Beyond Meat are down 1.83% premarket to $122.02 vs. the 52-week trading range of $99.86 to $221.00.
    • The Seeking Alpha Quant Rating on BYND is flashing Bearish due to low marks for value and profitability.
    • In a bull market where tech stocks have grown to lofty valuations, a lot of platform-level growth left to be found is among smaller start-ups rather than the giants. But Evercore ISI is pointing out one portfolio standby it says is set for a heavy inflection in the advertising business.
    • That would be Apple (NASDAQ:AAPL), which may be set for a massive new revenue stream, and likely sooner than expected.
    • The company's ad business is an "underappreciated lever for upside" offering a route to monetization enhancement while ensuring consumer privacy, analyst Amit Daryanani and team write.
    • They're forecasting Apple's ad business will grow from $2 billion to about $20 billion in fiscal 2025, "a similar trajectory to the growth of Amazon's (NASDAQ:AMZN) ad business from about $3 billion to over $20 billion in just four years."
    • And given the high margin of the business, Evercore is expecting at 2025 scale, ads would account for 17% of services revenues (5% of company total), and a $0.50 contribution to earnings per share (or about 9%). "The global advertising market is in excess of $1 trillion, so even a single-digit market share could be material."
    • Apple and Google entered mobile ads in a similar way in 2010 – both via acquisition – but the path has diverged from there, Evercore notes: Apple's iAd Network failed to gain traction. But the company is on its way to getting a "fair share," both with the rollout of App Tracking Transparency and the less visible launch of Search Ad campaigns.
    • The firm estimates Apple's current $2 billion business stems from App Store search, with a smaller contribution from News and Stocks. But the ultimate potential may lie in making the App Store about content discovery, not just content "delivery."
    • The ad business is set to grow organically with introducing search ads in China this year, and there are several catalysts that can help: leveraging Apple Maps for a "few billion dollars"; tapping the Roku (NASDAQ:ROKU) model and start leveraging the TV installed base; and the IDFA changes mean Apple could end up with a more intelligent data set vs. peers.
    • All in all, ads mark "yet another upside lever that should support continued double-digit earnings growth for the foreseeable future."
    • The firm has an Outperform rating on Apple and a bullish $180 target, implying 20% upside.



    • Financial stocks got an "alpha signal" and could be set to outperform the S&P (SP500) (NYSEARCA:SPY) in the next few months, according to the latest BofA Securities client flow survey.
    • Financials (NYSEARCA:XLF) are up about 0.2% premarket, the leading S&P sector with the 10-year Treasury yield (NYSEARCA:TBT) (NASDAQ:TLT) up another 2 basis points to 1.31%.
    • Weekly buybacks in Financials from clients were the highest on record since 2010 and nearly a record as a percent of market cap, BofA says.
    • "Buybacks by corporate clients accelerated from the prior week to the highest level since mid-March, driven by Financials," strategists led by Jill Carey Hall write in a note. "Financials has now overtaken Tech as the sector with the largest dollar amount buybacks so far this year."
    • "Based on our flows data from 2010 to today, we have found that the S&P 500 sector buying back the largest dollar amount in a given week have tended to outperform over the next several months with a >50% hit rate," Hall says.

    • "YTD, corporate client buybacks across sectors are +49% y/y but still far from pre-COVID levels: -14% vs. 2019 at this time, and one of the weakest years post-crisis so far when normalized by market cap," Hall adds.
    • Overall, clients broke a two-week selling streak, buying a relatively small net amount of $300M.
    • Hedge funds drove the buying with the biggest inflow in five months, while institutional and retail investors sold.
    • Seven of the 11 S&P sectors saw inflows. Financials were on top with the sixth-largest inflows on record. Info Tech (NYSEARCA:XLK), Health Care (NYSEARCA:XLV), Consumer Discretionary (NYSEARCA:XLY) and Consumer Staples (NYSEARCA:XLP) had net selling.
    • Excluding buybacks, Communication Services (NYSEARCA:XLC), Materials (NYSEARCA:XLB) and Energy (NYSEARCA:XLE) led inflows.
    • This morning, Dick's Sporting Goods raised its buyback program to $400M, along with issuing a special dividend.

  3. Is there seminar today?

  4. Yes Webinar.  

    Good morning!! Here is the link to today's webinar. Enjoy

  5. Phil/WBA Rolled down my 25 long '23 $50 WBA calls to $40s (for $4) but got 30 instead of 25 hoping you might suggest a short sale against the extra 5 $40s.

    30 WBA '23 $40c ($8.8)

    -25 WBA '23 $60c ($4.8)

    -5 WBA '23 $45p ($4.7)


  6. 4,495 – so close.  

    WBA/Wing – Well since you are 5 under-covered, I'd usually sell 10 but since I think WBA is way too low, I'd just sell 5 of the Jan $50 calls, now $2.55 and pick up $1,275.  I'm guessing you paid about $32K for the $60,000 spread and you're using 150 out of 500 days so 3 more sales is another $4K of premium while you wait.  

  7. It’s the Pandemic, Stupid