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Friday Already? Ending the Week Weakly

SATURDAY AT THE FAT MAN'S | Fat Harold's Ocean Drive NMBI thought it was Saturday!  

Don't ask how, that's the most senile thing I've ever done and I'll be 59 in March – in case you are keeping track.  I had a nice, relaxing morning, woke up at 6 and did some reading and then caught up on some late-night talk shows (I just watch the monologs) and, in my defense, Seth Meyer's said he'd be back in the studio on Monday and I didn't realize he doesn't do Friday shows so I think that's where I got the impression it was Saturday.  

Anyway, I got some washing done and then I went out for breakfast and, on the TV, the stock tickers were going by and we were down about as much as yesterday so I thought it was just showing yesterday's finish but then I saw the Nas below 15,500 and I realized something was wrong and I raced back home.  First time I've ever done that.

So, it's 10:10 now and the indexes are down a bit more this morning but nothing tragic.  Looking at our bounce chart, which we've had since Dec 21st, the only change since Wednesday's rally is the Weak Bounce line on the Russell, which has turned black (too close to call) – also, we have a new bottom for the Nasdaq, better reflecting our expectations:

  • Dow  36,000 to 34,200 has bounce lines of 34,560 (weak) and 34,920 (strong) 
  • S&P 4,700 to 4,465 has bounce lines of 4,512 (weak) and 4,559 (strong) 
  • Nasdaq 16,500 to 15,000 has bounce lines of 15,300 (weak) and 15,600 (strong) 
  • Russell 2,400 to 2,080 has bounce lines of 2,144 (weak) and 2,208 (strong)

As you can see,, we tested 15,300 this morning but already bouncing back to the strong bounce line but failing this at the end of a bad two weeks would not be a good sign.  

It's a holiday weekend and Oil (/CL) is jacked up at $83 and I'm still playing it painfully short.  Brent is trading over $85 ($85.50) so it's not a good sign but I think the whole thing is way overdone as Retail Sales were off 1.9% in December, down from +0.2% expected by leading Economorons.  Ex-Auto they were down 2.3% so a total disaster of a report.  Industrial Production was also down 0.1% in December – a 125% miss from the +0.4% expected by our leading prognosticators

Consumer Sentiment is also dropping – down to 68.8 in January from 70.6 in December.  And, keep in mind, by the way, that Retail Sales are not adjusted for the 7% inflation we've had this year so, on the whole, people bought about 10% less stuff at higher prices – this is getting into recessionary territory, folks.  

Bank earnings were scattered this morning with JP Morgan (JPM) showing 14% less profit than last year and Citigroup down 26% from last year at 0.20 below expectations.  Neither one is being hit very hard as rising rates are good for the outlook – as it gives the banks the chance to put the squeeze on borrowers.  

Black Rock (BLK) has been getting no respect since May, despite now having $10,000,000,000,000 under management.  They made $1.64Bn in Q4 or $10.63 per $846 share, which is $132Bn in market cap.  So 20x earnings is reasonable for BLK though we haven't played them since they were $200 and won't be playing them again unless they go on a better sale than this because, the problem with having $10Tn to invest in a toppy market, is that you end up investing in things that you shouldn't.

Beware the stories you are hearing about Covid numbers turning down.  We just had a surge based on Thanksgiving and Christmas and New Year's gatherings so, of course we hit very high infection rates and of course they will head a bit lower unless we are all heading out to MLK gatherings this weekend?  You can't react to small data samples – long-term trends are what we need to watch – like 24 (out of 50) states now have hospitals at or near capacity.  The country as a whole and 26 states have reported more coronavirus cases in the past week than in any other seven-day period.  

Since Thanksgiving, the White House has sent more than 350 military doctors, nurses, medics and other personnel to 24 states to help hospitals with staffing challenges, President Biden said this week, and plans to send an additional 1,000 service members to six hard-hit states. That is in addition to the more than 14,000 National Guard members deployed in 49 states to help staff hospitals and other medical facilities, he and other officials said.  Do you think Biden is doing this because the crisis is over?  

Biden is distributing 500M N95 masks (the kind that actually work) and that won't even begin until March so that would be a huge, futile waste of money if this was all going away this weekend, wouldn't it?  Pay attention to what the politicians are doing – not what they are saying…  

nurse strikeAfter spending $11Tn on SOMETHING over the past two years, it turns out it was not medical supplies as nurses across the US are joining protests against working conditions at their hospitals, where the ones that haven't come down with Covid are working double shifts to cover the ones who did.  

“We don’t have food service people … we don’t have supply chain people to deliver our most critical supplies, we don’t have people to repair our equipment,” a nurse said. “But every job that doesn’t get done by somebody else ends up falling to the bedside nurse. We’re overwhelmed.”

Next week is officially the start of earnings season so we'll see how things shake out.  Monday is a holiday in the US and it will be mostly Housing Data along with the NY (Tues) and Philly (Thurs) Fed Indexs and Leading Economic Indicators on Friday.  After that, on Jan 27th, Q4 GDP makes its debut.

Have a great weekend (starting tomorow), 

- Phil


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  1. Good Morning Sunshine!  :)

  2. Woah Phil! Let's put you on a plan. Green tea, almonds, etc etc etc

  3. Never and I mean never party on a Thursday night! Man, you had me worried. My maternal tendencies got the better of me and I was thinking the worst had happened. I had visions of you tied up and stuffed into a trunk, kidnapped by some oil cartel or Albanians! Never do that again young man! 

  4. Time has no meaning in this bold new world :-)

  5. Phil deserves the occasional luxury of going out to have breakfast like we mortals do !!!

  6. It is rare to be able to roast Phil. Have you ever noticed that the market can be volatile when he is "away "? Hmmm

    Monday is the market holiday, today is the warm up.

  7. /CL – What happens if you hold /CL short and the Feb Futures expire (5 days)? Do I need to roll them forward to the next month's futures?

  8. Phil/CL


    Do you have a target?

  9. Good morning! 

    Andy has Covid now, so he was no help this morning.  Jackie, thank God, has no lasting effects.  

    Green Tea and Almonds/Pman – 2 of my favorite things.  

    Party/Kustomz – Went out with the kids and was home by 8 – just got it in my head it was Saturday this morning and didn't give it a second thought until I saw a live TV.  I think that's the problem – with a smart TV I never watch anything live – there's no sense of days from the shows I watch.  

    Time/Malsg – There's a song for that.  ^

    Luxury/Jij – Oh we used to dream of having breakfast…  

    Yes Randers, me not in my chair is still the best predictor of a market sell-off. 

    /CL/Dave – Neve let your futures contracts expire on you!  Have to roll them.

    /CL/Jeff – My average entry is $80.4175 so I'm praying we get back to that.  I don't see any reason $80 should hold though.  We're just under $2.50 for gasoline, which is essentially $4 at the pumps and $5 in some place – usually that's where things tend to pull back. 

  10. Phil- Rolling /CL – That's what I figured. I assume the spread gets smaller, as its about $0.50 at the moment.

  11. This move in oil is pretty impressive considering the move up in the $.

  12. Are you and Andy related or just coincidental last names?

  13. My brother. 

  14. /CL, Dave – The Feb contract is /CLG22 and expires next week and is $82.95 at the moment.  /CLH22 is March and it's at $82.50, so lower than Feb as no one thinks $83 will stand.  

    PPIH -0.23%Jan. 14, 2022 11:42 AM ET12 Comments

    • New York Fed President John Williams expects inflation to drop to around 2.5% this year as U.S. economic growth slows and supply constraints gradually ease, according to his speech on Friday.
    • This figure would come much closer to the FOMC's 2% average inflation target, and well below the current 7% Y/Y print in December. He anticipates headline inflation to get close to 2% in 2023.
    • Contributors to surging consumer price inflation in the past year include "very strong demand, especially for goods," and supply and demand imbalances sparked by the pandemic, Williams notes – similar to what Richmond Fed President Thomas Barkin recently alluded to with regards to soaring goods inflation vs. services inflation.
    • Williams also thinks that inflation in the form of personal consumption expenditure index, the Fed's preferred gauge of inflation, could hit 5% in 2021.
    • "The Fed is focused on ensuring that inflation fails," he notes. Earlier this week, Fed Governor Lael Brainard said she's confident that policy actions will tame inflation.
    • On the labor front, Williams sees the unemployment rate continuing to fade to 3.5% this year amid record job openings, quits and wage growth. This compares with the current unemployment rate at 3.9%.
    • For economic growth, he expects inflation-adjusted gross domestic product to increase by 5.5% in 2021, which would mark the strongest growth rate between fourth quarters in more than 35 years, Williams highlights. Looking forward, real GDP could cool off to around 3.5% this year, which would still be above its long-term trend, he adds.
    • Towards the end of September, John Williams said the inflation spike may take another year to subside.

    That can happen in a Recession.


    SAP -3.03%Jan. 14, 2022 11:12 AM ET4 Comments

    • Citing recent survey results, Philadelphia Federal Reserve Bank President Patrick Harker gave an upbeat view of the current economy, but he warned that a labor shortage could become a stumbling block to maintaining momentum.
    • "Things will keep improving as long as employers have enough workers to staff their businesses," Harker told a virtual event held by The Chamber of Commerce for Greater Philadelphia on Friday.
    • Disclosing results of a survey of members of the Philadelphia chamber of commerce, Harker reported that 56% of respondents saw higher new order volumes in 2021 compared to 2020. The same data showed that 72% reported higher year-over-year sales.
    • However, the Philly Fed president pointed to labor issues as the key concerns of business owners. He noted that 47% of respondents saw wages as the biggest worry going forward, with 35% citing the availability of labor.
    • In addition, 92% said that wages and benefit costs were likely to increase. On labor availability, 56% of the Philadelphia-based business leaders surveyed said they had difficulty hiring in the last three months because of a lack of qualified applicants.
    • Harker noted that the survey was conducted before the number of Omicron cases spiked, so labor conditions might even be tighter at the current moment.
    • Even with this challenge, Harker expressed optimism about the ability of companies to discover the best way to find the workers they need, even if that means changing some of the ways they have traditionally handled labor relations.
    • "Going forward, employers are going to have to think creatively about how to attract and retain talent. In the end, I believe we will all benefit from that," he said.
    • Harker has kept a high profile this week. See his recent recommendations for Fed policy and how he thinks the central bank should handle the threat of inflation.


    SP500 -0.37%Jan. 14, 2022 11:19 AM ET4 Comments

    • The major averages are still lower in choppy trading following a big miss on December retail sale.
    • The Dow (DJI) -0.9% is faring the worst with a big post-earnings price decline from JPMorgan.
    • The S&P (SP500) -0.5% is down and the Nasdaq (COMP.IND) -0.3% is doing the best with three of six megacaps higher.
    • Ten of 11 S&P sectors are down, with Energy the sole one in the green. Materials and Real Estate are at the bottom.
    • The 10-year Treasury yield is 3 basis points higher to 1.74%.
    • Headline retail sales feel unexpectedly, dropping 1.9% last month, while the core rate sank 2.3%.
    • "Ouch. The overall numbers are terrible, but the details are all over the map," Pantheon Macro's Ian Shepherdson says. "Sales of building materials rose 0.9%, but online sales plunged by 8.7%, furniture sales dropped 5.5%, and clothing sales fell 3.5%."
    • "Lack of cash is not the issue, so we expect a strong rebound in sales once the Omicron wave subsides. January is a probably a write-off but February and March will be much better."
    • The weak report disrupts the hawkish Fed narrative growing this week that markets should prepare for a March rate hike.
    • Suddenly there will be speculation that the Fed is hiking into weakness.
    • "Fed communication alerting markets to a March rate hike is becoming so consistent and prevalent, that it wouldn’t shock me if they rented a billboard in Time Square that said, 'Rates are rising in March," Kinsale Trading's Tom Essaye says. "And while I might be wrong, I think that every single Fed speaker that has said something about monetary policy so far in 2022 has essentially said that rates are going to rise in March, and that completes what is, frankly, the most violently hawkish 'about face' on Fed policy I’ve seen in my career."
    • If "you asked me on Nov. 3 where the S&P 500 would be if the Fed was hiking rates in March, I would not have said just under 4,700!" he adds. "But I will say this: The pace of this hawkish turn will need to slow otherwise I do not think the market will be able to hold up as well over the coming weeks."
    • Among active stocks, casinos are at the top of the S&P leaderboard on favorable gaming law changes in Macau.

    GOOG +0.63%Jan. 14, 2022 11:11 AM ET

    • Google (GOOGGOOGL) misled publishers and advertisers about the inner workings of its ad auctions, according to newly unredacted allegations in a December 2020 lawsuit brought against the tech giant by state attorneys general.
    • That boosted prices for buyers and deflated sales for companies, while Google pocketed the difference, according to what's now been revealed in the complaint.
    • That includes internal correspondence where some Google employees compared the practice to growing the business through "insider information," the WSJ notes.
    • Google owner Alphabet's stock is shedding some morning gains, now: GOOG flat, GOOGL +0.2%.
    • Google maintains the lawsuit is "full of inaccuracies and lacks legal merit" and says it intends to file a motion to dismiss it next week.
    • The suit (from more than a dozen states, led by Texas) charges Google with inflating ad costs through its practices – costs that brands pass on to consumers through higher-priced products – and suppressing competition from rival exchanges and limiting options for ad delivery.
    • The case is separate from a search-focused antitrust case pursued by the U.S. Justice Dept. and more than three dozen states.

    AAPL +0.28%Jan. 14, 2022 11:01 AM ET6 Comments

    • Apple (AAPL +0.1%) is weighing a delay of a heavily anticipated mixed-reality headset by at least a few months, which could push it into 2023, Bloomberg reports.
    • The device, which could blend virtual reality and augmented reality, was likely headed for an unveiling at the June Worldwide Developers Conference and a release later in the year.
    • The company is facing hardware development challenges, though, ranging from overheating to cameras and software, according to the report.
    • Apple has done work on such a device for years, and once planned to roll out a headset last year and ship in 2022. It's aiming to create products with more appeal than current augmented-reality viewers such as Spectacles from Snap (SNAP -3.9%) – and previous big stabs at the product space, like Google Glass (GOOG +0.7%GOOGL +1%) or Magic Leap, haven't gotten traction.
    • Virtual-reality products have done better, however, led recently by Meta's (FB +1.4%) Quest 2 headset.
    • The likelihood of a 2022 launch for the product led Evercore to match a Street-high price target for Apple.

    AAPL +0.28%Jan. 14, 2022 10:58 AM ET3 Comments

    • Apple (NASDAQ:AAPL) is reportedly in talks with Major League Baseball about broadcasting games on its Apple TV+ service, and if it should come to fruition, it would be considered a "major strategic move" for Apple, Wedbush Securities pointed out.
    • Analyst Dan Ives, who rates Apple (AAPL) outperform with a $200 price target, pointed out that the tech giant is going down a different path for content growth as opposed to just buying a movie studio and believes that live sports programming could be a "key potential" for success with the service in the future.
    • The package being discussed would allow a network or streaming service to show regular-season games on Mondays and Wednesdays that were not picked up by ESPN.
    • Pointing out that Amazon (NASDAQ:AMZN) has already spent $1 billion to air Thursday Night Football on its Prime service, a deal for Apple with live sports "will be a key linchpin to its streaming success along with original content as competition builds for live sports packages," Ives wrote in a note to investors.
    • Apple (AAPL) has had some notable successes with its streaming service, including TV shows "Ted Lasso," "The Morning Show," and movies like "Greyhound" and "CODA," but it lags the subscriber count of other services, such as Netflix (NASDAQ:NFLX), Disney+ (NYSE:DIS) and HBO Max (NYSE:T), with an estimated 20 million paid subscribers and 45 million around the world. By adding sports packages such as the MLB package, or others like college football, it should be a "shot across the bow" to other networks or streaming services that Apple is serious about live sports content to help drive growth for its service.
    • "Taking a step back, Apple TV+ is a small, but highly strategic component of the overall services ecosystem ($80 billion annual revenue in FY22) that is becoming a key monetization engine for the company over the coming years to tap its golden and unmatched installed base," Ives added.
    • Loop Capital recently raised its price target on Apple (AAPL) to $210, tying a Wall Street high, on near-term iPhone strength.

  15. MRCY -0.91%Jan. 14, 2022 10:31 AM ET6 Comments

    • Billionaire fund manager Howard Marks explained in a letter to investors that the decision to sell a stock largely relates to the specific situation.
    • "The decision to trim positions or to sell out entirely comes down to judgment … like everything else that matters in investing," the co-founder of Oaktree Capital wrote in a fund letter released this week.
    • Marks noted that many investors make mistakes by looking only at the price level of an asset. They will sell investments that go down in value or will cash out after the asset's price has climbed.
    • However, the billionaire argued that neither of these situations make sense.
    • To illustrate his point, he detailed the story of Amazon, which rose from $5 in 1998 to a level of more than $3,300 today. However, he contended that few investors would have captured this value because they would have sold at some point along the way.
    • He noted that Amazon rose from $5 in 1998 to $85 in 1999 but then crashed back to $6 as the internet bubble popped. Anyone who bought at $5 was likely to sell before it reached $85 and anyone who bought at $85 would likely sell as it declined to $6, he asserted.
    • Talking about a fictional investor who purchased the stock at its 2001 low of $6: "And who wouldn’t have sold by late 2015 when it hit $600 – up 100x from the 2001 low? Yet anyone who sold at $600 captured only the first 18% of the overall rise from that low."
    • Rather, Marks gave two basic rules to determine if someone should sell an asset they hold:
    • "If your investment thesis seems less valid than it did previously and/or the probability that it will prove accurate has declined, selling some or all of the holding is probably appropriate."
    • "Likewise, if another investment comes along that appears to have more promise – to offer a superior risk-adjusted prospective return – it’s reasonable to reduce or eliminate existing holdings to make room for it."
    • The Oaktree founder added: "Selling an asset is a decision that must not be considered in isolation."
    • Marks also lambasted the idea of market timing, arguing that guessing at near-term highs and lows often leads to missing out on longer-term gains.
    • "You can try to add to returns by engaging in such machinations, but these actions are unlikely to work at best and can get in the way at worst," he said of market timing.
    • Want more from Howard Marks? See what he expects from the Federal Reserve.

    WGO +0.20%Jan. 14, 2022 10:20 AM ET

    • Winnebago Industries (NYSE:WGO) is set to demonstrate an all-electric concept motorhome at the Florida RV Super Show in Tampa, Florida.
    • The concept was developed over two years by the firm's Advanced Technology Group (ATG), and the onsite vehicle will be supplemented by a virtual Facebook event on January 18, 2022.
    • ATG was established in 2019 to develop emerging technologies for future products and services at Winnebago. The all-electric concept motorhome is its first public facing example.
    • Winnebago is undervalued and outperforming its peers, says SA contributor Robert F. Abbott in a recent bullish analysis on the stock.

    Jan. 13, 2022 5:29 PM ET7 Comments

    • Closely watched hedge fund manager Kyle Bass said Thursday that oil prices could rise "well north of $100" in 2022 as a lack of investment in the hydrocarbon industry meets a surge in demand as the global economy emerges from COVID restrictions.
    • "I think you should buckle your seatbelts," the founder and chief investment officer of Hayman Capital Management said. "We're going to see really high prices very soon."
    • Bass explained that policies designed to fund the development of green energy sources have pulled capital away from oil development. As a result, the industry will not have enough capacity to keep up with demand as the COVID impact fades.
    • "You can't just turn off hydrocarbons. It takes 40 or 50 years to switch fuel sources," he said.
    • Looking at the broader market, Bass predicted that the Federal Reserve might not be able to raise interest rates as quickly as it needs to because doing so would trigger a massive correction in the stock market.
    • "The Fed doesn't have the stomach for the market to drop. … If the market is down 20%-25%, I think the Fed stops raising rates," he said.
    • "My personal view is that I don't think they can raise short rates more than 100-125 basis points before they have to stop," he added.
    • Bass also contended that the real inflation rate is actually running at 14%-15%, or even higher.
    • On China, the Hayman Capital founder maintained his long-standing belief that the country's equities remain uninvestable given the structure of the economy, a lack of transparency and the Chinese government's stance toward private enterprise.
    • "People who are betting on a bounce, I think that is kind of fool's game," he said. "I think people investing in Chinese equities are breaching their fiduciary duties to their investors."
    • For more on Bass' view on China, see why he says the U.S. holds the "nuclear economic button" with the country.

    CSCW -4.60%Jan. 13, 2022 5:22 PM ET4 Comments

    • With the help of China's state-backed Blockchain Services Network, the country expects to introduce blockchain infrastructure to support non-fungible token deployment, the South China Morning Post reports.
    • This comes when cryptocurrency transactions are illegal in China, though NFTs – which are different to digital tokens like bitcoin (BTC-USD) and ethereum (ETH-USD), "have no legal issue," Red Date technology Chief Executive He Yifan told the South China Morning Post in an interview.
    • The infrastructure, dubbed BSN-Distributed Digital Certificate, will offer application programming interfaces for entities or individuals so they can build their own portals or applications to manage NFTs. Note that only Chinese yuan is allowed for transactions.
    • BSN-DDC will integrate 10 chains, including the adapted version of ether (ETH-USD) and corda, He Yifan told the South China Morning Post.
    • Keep in mind that Ant Group (NYSE:BABA) and Tencent Holdings (OTCPK:TCEHY) (OTCPK:TCTZF) are the first Chinese tech giants to embrace NFTs.
    • Some NFT stocks include: Vinco Ventures (NASDAQ:BBIG), Dolphin Entertainment (NASDAQ:DLPN), Takung Art (NYSE:TKAT), Liquid Media Group (NASDAQ:YVR), Hall of Fame Resort and Entertainment (NASDAQ:HOFV) and Color Star Technology (NASDAQ:CSCW).
    • Previously, (Jan. 6) NFT market topped $40B in 2021.

    MA +0.60%Jan. 13, 2022 5:07 PM ET1 Comment

    • Even as some retailers warn that the Omicron COVID variant is hurting sales, Mastercard (NYSE:MA) CEO Michael Miebach observes: "We're coming with a momentum of the holiday season into the New Year, and trends continue to look relatively positive."
    • Consumers are likely to keep spending even if they don't feel comfortable going to brick-and-mortar stores, he said in a CNBC interview.
    • "They have adapted, and they show all signs of wanting to do more online in digital banking and online shopping and so forth," Miebach said.
    • Spending will be aided by savings that have consumers have built up during the pandemic, he added.
    • Mastercard (MA) shares rose 0.6% in regular trading on Thursday, on a day when its rival Visa (NYSE:V) fell 0.3%.
    • Previously (Dec. 26), Holiday retail sales shine in 2021, as shoppers return to stores and shop early

    Jan. 13, 2022 5:01 PM ET

    • Philadelphia Federal Reserve Bank President Patrick Harker said Thursday that the central bank should tighten monetary policy in stages, removing stimulus methodically in order to tamp down inflationary pressures without sparking a major economic or market reaction.
    • "We do need to take action on inflation. It is more persistent than we thought a while ago," Harker said, noting that he has "penciled in" three rate hikes during the year but contended that "four is not out of the question."
    • The Philly Fed president argued that the Fed should take a measured approach to its hawkish move, removing its stimulus program in stages.
    • This starts by tapering its asset-purchase programs. Once the central bank is no longer buying Treasury bonds and mortgage-backed securities, Harker recommended a series of rate hikes meant to take short-term interest rates "sufficiently away from zero."
    • At that point, he advocated normalizing the central bank's balance sheet, which would involve selling off the assets it bought during its quantitative easing.
    • Harker stressed that these actions shouldn't happen all at once to limit the risk of tipping the economy into recession by tightening too quickly.
    • "We do it carefully and methodically. This is why I am not in the camp of raising rates and doing balance sheet normalization all at the same time," he said.
    • Harker said the eventual process of quantitative tightening will be more aggressive than the last time the Fed ran the process, as it has expanded the balance sheet significantly more.
    • The Philly Fed president suggested that he will also look at the market reaction when judging policy, saying a methodical approach will also limit the risk of a massive sell-off in response to central bank action.
    • Going forward, Harker contended that the Fed should try to use changes in the federal funds rate to steer policy rather than changes in the central bank's balance sheet.
    • On COVID, Harker predicted that people will "learn to live with" the virus and that companies will solve supply chain issues over time.
    • For more on what's in store for the Fed, see why fund manager Daniel Gladiš thinks central banks "have their hands tied" fighting inflation.

  16. "We do it carefully and methodically"

    Ah, the time tested soft landing gambit. Good luck with that. Decades of borrowing/spending building to the crescendo of Covid relief now measured if the TRILLIONS ? Keep calm and carry on.

  17. That's the funniest thing I have read in a while Phil.  Welcome back! :)

  18. Jamie Dimon Takes High View of Fed Hikes: ‘It Could Be Six or Seven’

  19. Keeping calm/Pstas – It's just hard to imagine how this all ends well.  

    That's $29.8Tn PLUS a $3Tn deficit for this year WITHOUT any additional spending to combat Covid or Climate Change or keep mean old Russia out of the Ukraine or keep nasty old China out of Taiwan.  We can't even remember the Iran nuclear thing – it's so far down the list, as is starvation in Africa, Economic Collapse in Turkey and serious conflicts in Afghanistan (remember them?), Yemen, Haiti (the President was assassinated), Myanmar and, of course, Palestine (yawn).  We certainly haven't given those things a thought and, before you know it, the mid-terms are on us and we can watch this Democracy descend into chaos as well.  2022 is going to be fun!  

    Thanks Pharm.

    VTV -0.64%Jan. 14, 2022 1:59 PM ET

    • Value-based exchange traded funds continue to build momentum in 2022 as investors are looking at a rotation play away from high-growth names.
    • According to data generated from Eric Balchunas of Bloomberg, 82 different value ETFs have taken in capital inflows YTD that total $4.6B.
    • Even more significant is that the $4.6B represents 23% of the total inflows to the entire ETF marketplace.
    • So far this year, the top five value-based ETF fund flow leaders are the Vanguard Value ETF (NYSEARCA:VTV), iShares S&P 500 Value ETF (NYSEARCA:IVE), iShares MSCI EAFE Value ETF (BATS:EFV), SPDR Portfolio S&P 500 Value ETF (NYSEARCA:SPYV), and the iShares Edge MSCI USA Value Factor ETF (BATS:VLUE).
    • Per Bloomberg data, year-to-date VTV has attracted $1.15B, IVE has taken in $680.54M, EFV garnered $543.53M, SPYV pulled in $463M, and VLUE has taken in #307.61M.
    • From a performance stance, so far in 2022 VTV is +1%, IVE +0.3%, EFV +4.5%, SPYV +0.3%, and VLUE is +2.6%.
    • Aside from value ETFs, fund assets in general that include both exchange traded funds and conventional funds retracted $21.1B on the trading week.

    INTC +1.02%Jan. 14, 2022 1:48 PM ET12 Comments

    • Intel (NASDAQ:INTC) has chosen the Greater Columbus area to build a new factory that it intends to invest up to $20 billion in to expand semiconductor capacity, The Dispatch reports.
    • The new plant will employ 3,000 workers and will be situated on a 3,190 acre plot of land near the Columbus suburb of New Albany.
    • The move is part of Intel Chief Executive Officer Pat Gelsinger's decision to expand capacity in the U.S. to help deal with the global semiconductor shortage, as well as produce more chips in the country, amid national security concerns.
    • It's unclear when the factory will be built, as it requires incentives from Congress, which is currently debating the CHIPs Act to bring semiconductor manufacturing back onshore. The Dispatch notes that the U.S. Innovation and Competition Act was passed by the Senate in June, but it is still being debated in the House.
    • Approximately 12% of the world's chips are made in the U.S., with 80% made in Asia, according to industry data.
    • Earlier this week, Senator Marco Rubio said Intel (INTC) should not get funding from the CHIPS Act after it removed a reference to Xinjiang, an area with alleged human rights abuses, in a letter to suppliers.

    JNJ -0.67%Jan. 14, 2022 1:18 PM ET5 Comments

    • U.S. Bankruptcy Judge Michael B. Kaplan is set to rule by Feb. 28 on a demand to throw out a bankruptcy case filed by a unit of Johnson & Johnson (NYSE:JNJ) over claims that the company’s baby powder led to cancer.
    • “We can then see where this case is going by the end of February,” Bloomberg reported quoting Kaplan as saying in court Friday.
    • Having set up a unit called LTL Management to offload its talc liabilities, Johnson & Johnson (JNJ) put it in bankruptcy last year to deal with all current and future lawsuits.
    • All the cases are temporarily on hold amid ongoing legal proceedings on bankruptcy.
    • However, if the Judge rules in favor of the bankruptcy, a company-funded trust would be created by LTL to pay for talc claims.
    • Read more on the creation of LTL Management and its subsequent filing for Chapter 11 bankruptcy protection.

    USO +2.65%Jan. 14, 2022 1:09 PM ET8 Comments

    • The count of active drilling rigs in the U.S. continues its upward march, jumping by 13 to 601, 61% above levels from this time a year ago, according to the latest weekly survey from Baker Hughes.
    • U.S. drilling rigs targeting crude oil surged by 11 to 492, 71% higher than the year-earlier count of 287, while gas rigs gained 2 to 109, up 28% from 85 rigs a year ago.
    • Most of this week's action was in the Eagle Ford, where oil rigs rose by 5 to 43, while rigs targeting oil in the Permian Basin added just 1 to 293.
    • Bank of America's commodities team has forecast 900K bbl/day of lower-48 supply additions on ~100 horizontal rig additions throughout 2022; the count is up 12 in the first two weeks of this year.

    MSFT -4.23%Jan. 14, 2022 1:01 PM ET5 Comments

    • Microsoft (NASDAQ:MSFT) is likely to be one of the "big" winners in the metaverse, investment firm Bernstein noted, pointing out that the journey from concept to reality will be beneficial for software spending, particularly from the Redmond, Washington-based tech giant.
    • Analyst Dr. Mark Moerdler, who rates the Satya Nadella-led company outperform with a $364 price target, notes that Microsoft is well positioned to help deliver a metaverse platform today, even if it's still a nascent idea: it has the Azure platform, it's already created the HoloLens and Mixed Reality devices, Microsoft Graph to understand a person's relationships and how they interact; Microsoft Mesh, its expertise in gaming as well as LinkedIn, to help drive the business social aspect of the metaverse.
    • "Microsoft is delivering on what many expect will be needed for the Metaverse," Moerdler wrote in a note to clients." While this potential next driver of growth is not part of our thesis today it could be a meaningful driver for numerous parts of the business."
    • Microsoft (MSFT) shares are up more than 1% to $307.94 in mid-day trading.
    • There's a lot of hype surrounding the metaverse and just exactly what it will entail, but one thing is clear, Moerdler believes: that it will be good for enterprise software and different companies will see upside depending on what they offer and how it evolves.
    • Though Microsoft (MSFT) is expected to be the "big winner," according to Bernstein's Moerdler, other software companies are also likely to benefit, notably Adobe (NASDAQ:ADBE) and (NYSE:CRM).
    • Salesforce's acquisition of Slack is being integrated into its existing customer relationship management solutions and the company has been positive about the metaverse, particularly as it relates to marketing. "We would expect to see meaningful investments by Salesforce in the Multiverse including one or more acquisitions to capture IP, market position, market share, and of course revenue," Moerdler explained.
    • Adobe (ADBE) could see upside from its Creative Cloud suite, "especially as more and different types of content creators will be required," Moerdler explained.
    • Nonetheless, the firm believes that it is Microsoft (MSFT) that will likely benefit the most, as "the best probability of success is going to be based, in our opinion, on those companies with the depth and breadth of functionality that could be required by the Metaverse as well as the market position and financial position to drive a successful outcome."

  20. Would love your thoughts on JPM. I had an old 1/22 JPM (JP Morgan Chase) BCS 90/115 BCS (with 85 puts). I sold the 90 calls for $75, but didn't do anything with the short calls.  The short calls were called  ..  I now have 1000 short position in  JP Morgan. Thoughts? Should I just close out. 

  21. PLUG -1.99%Jan. 14, 2022 3:00 PM ET

    Welcome to Seeking Alpha's Catalyst Watch – a breakdown of some of next week's actionable events that stand out. Check out Saturday morning's regular Stocks to Watch article for a full list of events planned for the week or the Seeking Alpha earnings calendar for companies due to report.

    Monday – January 17

    • All day - The stock market is closed for the Martin Luther King holiday.
    • All day - The three-day North American Bitcoin Conference begins in Miami, Florida. Notable speakers include Mark Cuban, Nick Spanos, Tezos (XTZ-USD) co-founder Kathleen Breitman, Tether (USDT-USD) co-founder Craig Sellars and Ripple (XRP-USD) CTO David Schwartz. Bitcoin (BTC-USD) and other cryptos are beginning to attract more attention as potential inflation and government instability hedges.

    Tuesday – January 18

    • Volatility watch - Options trading has spiked higher on Arrival (NASDAQ:ARVL) and Ginkgo Bioworks Holdings (NYSE:DNA). Stocks generating strong interest on Reddit's WallStreetBets include Virgin Galactic (NYSE:SPCE) and Roblox (NYSE:RBLX). On Stocktwits, Vinco Ventures (NASDAQ:BBIG) and Cenntro Electric Group (NASDAQ:CENN) are at the top of the buzz list. Short interest positions are elevated on Skillz (NYSE:SKLZ) and Nikola (NASDAQ:NKLA) heading into the week. Also keep an eye on Rocket Lab (NASDAQ:RKLB), with a deadline for a redemption of public warrants hitting.
    • All week - Notable conferences scheduled for the week include the Santander 26th Annual Latin American Conference, the Sidoti Winter Small Cap Virtual Investor Conference, Bank of America New York Asia Week 2022 and the CIBC Western Institutional Investor Conference.
    • All day - The National Retail Federation hosts its NRF2022 event which follows closely after the ICR Conference. Notable speakers include Best Buy (NYSE:BBY) CEO Corie Barry, Lowe's (NYSE:LOW) CEO Marvin Ellison, Ralph Lauren (NYSE:RL) CEO Patric Louvet and Walmart U.S. (NYSE:WMT) CEO John Furner.
    • All day - The U.S. Global Sea to Sky Cargo ETF (NYSEARCA:SEA) debuts on the New York Stock Exchange. The ETF will seek to provide diversified access to the global sea shipping and air freight industries. Consisting of common stocks listed on developed and emerging market exchanges across the globe, the fund manager says the ETF will use a smart-beta strategy to determine the most efficient sea shipping and air freight companies in the world.
    • All day - OPEC issues its monthly oil market report.
    • All day - Bloomberg hosts its The Year Ahead Summit with business leaders like Visa (NYSE:V) CEO Alfred Kelly, Intel (NASDAQ:INTC) CEO Patrick Gelsinger, Cisco (NASDAQ:CSCO) CEO Chuck Robbins and Virgin Atlantic CEO Shai Weiss discussing the overall business climate. Bloomberg Intelligence will also list its 50 companies to watch in 2022 as part of the two-day event.
    • All day - Keep an eye out for some buzz on Winnebago (NYSE:WGO) with the company scheduled to reveal an all-electric concept motorhome at the Florida RV Super Show.
    • All day - Ryan Specialty Group Holdings (NYSE:RYAN) stands out of the large group of companies with an IPO lockup period expiring. Shares of RYAN are up more than 50% from their IPO pricing level.
    • 10:30 a.m. FTC Solar (NASDAQ:FTCI) hosts a business insights call. The company's new CEO is following through on a promise to update analysts and investors with a report of his findings and 2022 plans following his first 100 days in charge. Shares of FTC Solar are down more than 30% over the last two months.
    • 11:00 a.m. 23andMe (NASDAQ:ME) holds its first R&D Day in a virtual format. Shares of 23andMe trade at the very low end of their post-SPAC range.
    • 1:00 p.m. The launch window for a Astra Space (NASDAQ:ASTR) rocket flight opens. The company's Rocket 3.3 is scheduled to carry Six CubeSats into orbit on a mission sponsored by NASA. Shares of Astra Space are down 33% over the last six week, with a negative report on the stock from Kerrisdale Capital accounting for some of the negative sentiment. Space stocks have been very volatile before and after launches over the last year.
    • 5:00 p.m. Cardiff Oncology (NASDAQ:CRDF) hosts a conference call to discuss updated data from its lead clinical program in KRAS-mutated metastatic colorectal cancer.

    Wednesday – January 19

    • All day - The two-day Index Ventures AI Summit features speakers like OpenAI's Sam Altman, Microsoft's (NASDAQ:MSFT) Kevin Scott, Nvidia's (NASDAQ:NVDA) Anima Anandkumar and Greylock Partners' Reid Hoffman.
    • All day - The lockup for many PIPE investors in Lucid Group (NASDAQ:LCID) ends. The lockup expiration will cover about 74% of the outstanding shares on Lucid. Morgan Stanley analyst Adam Jonas thinks the Saudi sovereign wealth fund is unlikely to sell any stock in the near future, but other analysts have warned on a short-term overhang as traders watch the institutional order flow.
    • All day - Shareholders with Vistas Media Acquisition Company (NASDAQ:VMAC) vote on the SPAC deal to take music streaming platform Anghami public. The SPAC deal between Power & Digital Infrastructure Acquisition Corp. (NASDAQ:XPDI) and Core Scientific also goes to a vote. Core Scientific is just coming off reporting bitcoin mining production of 1,044 in December to mark a +313% month-over-month increase.
    • Premarket - Signet Jewelers (NYSE:SIG) posts holiday sales results via a press release. Shares of Signet are typically very active following the sales update on the crucial selling period.
    • 8:00 a.m. Treasury Secretary Janet Yellen gives remarks at the U.S. Conference of Mayors.
    • 8:00 a.m. Polestar CEO Thomas Ingenlath delivers the closing keynote at the Handelsblatt Energy Summit. The electric vehicle maker is set to go public in a SPAC deal with Gores Guggenheim (NASDAQ:GGPI). The Polestar brand is expected to be operating in 30 markets by the end of 2023 as it is looking to ramp up sales to 290K vehicles by the end of 2025.
    • 8:30 a.m. BetMGM releases an update on the sports betting/iGaming operator's 2021 performance and holds a Q&A session. The update could also include details on the online sportsbook's launch in New York earlier in the week. Strong results from BetMGM have led to share price bounces for owners MGM Resorts (NYSE:MGM) and Entain (OTCPK:GMVHF) in the past.
    • 8:30 a.m. Osmotica Pharmaceuticals plc (NASDAQ:OSMT) hosts a call to discuss recent Upneeq trends, pending expansion into the medical Aesthetics market and other general business topics.
    • 10:00 a.m. Plug Power (NASDAQ:PLUG) holds a business update conference call. Shares of Plug Power rose last year when the company boosted guidance during a similar update call.
    • 10:00 a.m. Shareholders with Casper Sleep (NYSE:CSPR) vote on the buyout deal from Durational Capital. Shares of Casper Sleep trade about 15% below the deal price amid some questions on Durational's financing for a deal
    • 11:00 a.m. Silvergate (NYSE:SI) holds its earnings conference call. Options trading on Silvergate implies a share price swing of 13% after the report drops.
    • 12:00 p.m. Vuzix (NASDAQ:VUZI) CEO Paul Travers appears at the BTIG Metaverse Unbound Conference to share his industry and company insights during a fireside chat. ARK Invest has been a buyer of Vuzix this month.

    Thursday – January 20

    • All day - Shareholders with Trebia Acquisition Corp. (NYSE:TREB) meet to vote on the deal to combine with marketing firm System1 in a SPAC transaction.
    • 9:00 a.m. Conn's (NASDAQ:CONN) hosts a virtual Investor Day that will include a live question and answer session with management. The retailer plans to update investors on its enhanced strategic growth plan and long-term financial outlook. Shares of Conn's have rallied three of the last four times the retailer held a similar event.
    • 10:00 a.m. Corsair Gaming (NASDAQ:CRSR) provides an overview of its strategy, growth opportunities and long-term financial targets during a virtual investor day event.
    • Postmarket - Netflix (NASDAQ:NFLX) and Limelight Networks (NASDAQ:LLNW) are both expected to see some share price volatility after their earnings report drop. Options trading on Netflix implies a swing up or down of 7.2%, while options trading on Limelight Networks suggests a post-earnings move of 11.3%.

    Friday – January 21

    • All day - The drama around Lockheed Martin's (NYSE:LMT) planned $4.4B acquisition of Aerojet Rocketdyne (NYSE:AJRD) could ratchet up if the FTC delays the vote on the deal. The proposed combination is raising some eyebrows because it would give top defense contractor Lockheed ownership of Aerojet, which produces 70% of the solid fuel rocket motors and other propulsion products used in arms from antiballistic missiles to air-to-air missiles.
    • Premarket - IHS Markit (NYSE:IHS) releases the last earnings report before the expected close of the company's merger with S&P Global. A report earlier this month indicated that the Justice Department granted antitrust approval for $44B acquisition of INFO.

  22. JPM/Nom – Well you lost $42.50 on the short and made $75 on the calls so you are up $32.50, which is more than the $25 spread so be happy!  Just because you are accidentally short on JPM doesn't means you should stick with it.  They are only at 15x earnings and a very solid company.  

    BYND -6.61%Jan. 14, 2022 3:23 PM ET1 Comment

    • The large swings continue for Beyond Meat (NASDAQ:BYND) with shares peeling off 7.79% today.
    • Short interest on Beyond Meat (BYND) stands at about 37% of total float. One of the more notable bears is Jim Chanos of Kynikos Associates, who warned recently that Beyond Meat is "highly promotional" and puts out press releases "every time the CEO crosses the Street." As it stand today, Beyond Meat (BYND) is the most shorted stock in the Russell 1000 Index.
    • On the flip side of the alternative meat trade, bulls on Beyond Meat (BYND) are looking to the Beyond Fried Chicken partnership with KFC and test run of the McPlant sandwich at McDonald's to provide a spark.

    These guys are back to where we bought them (but we took the money and ran at $100+) and getting interested again but I had plant-based chicken nuggets and they tasted like fried cardboard – so I think there's a lot of work left to be done.  Rather than altering the ingredients, we should use Crisper and alter people's taste buds so they crave healthy food.  "Tastes like cardboard" is a winning slogan when marketing to termites so we have to have those genes in us somewhere…  

    AMAT +5.63%Jan. 14, 2022 3:22 PM ET1 Comment

    • Applied Materials (NASDAQ:AMAT) shares climbed more than 5%, Friday, as Jefferies analyst Mark Lipacis reiterated his buy rating on the company's stock as one of his top picks in the semiconductor equipment sector.
    • Lipacis gave his take on Applied Materials (AMAT) as part of an assessment chip foundry giant Taiwan Semiconductor's (NYSE:TSM) capital spending plans. Taiwan Semi (TSM) is said to be spending between $40 billion and $44 billion on equipment used to make semiconductors at this factories this year.
    • Lipacis said called Applied Materials (AMAT) and KLA (NASDAQ:KLAC) his top picks for the chip foundry and logic processor industries.
    • Earlier this week, analysts at Barclays raised their price target on Applied Materials (AMAT) shares to $165 from $160.
    • For its part, Taiwan Semi (TSM) edged up by 1% after rising more than 5% on Thursday following its upbeat quarterly results and spending forecast.

    NFLX +2.10%Jan. 14, 2022 3:07 PM ET9 Comments

    • Netflix (NASDAQ:NFLX) is jumping, up 3.3%, on news that it's boosting prices by $1 to $2 per month in the United States and Canada.
    • The company's standard plan in the U.S. is going to $15.49 a month from $13.99, and its standard plan in Canada is getting a boost to C$16.49 from C$14.99.
    • Those are Netflix's (NFLX) first price increases in the domestic markets since late 2020. The prices are effective immediately for new members, and existing members will see the hikes in coming weeks with new bills.
    • On the company's U.S. site, it says the lower-tier basic plan, which allows for only one simultaneous viewing stream, is priced at $9.99 a month, and its premium plan, with four simultaneous streams, costs $19.99 a month.
    • Last year brought wide discussion about Netflix's pricing power, which led firms including Citi and Bernstein to raise outlooks expecting higher prices ahead.
    • Netflix Chief Financial Officer Spence Neumann said in October's earnings call that the company only takes price hikes when it believes it's increasing value for members – and while the U.S. and Canada were "a bit more mature" than other international markets, there was "still a lot of runway for growth in both regions."

    10% more – Ouch!

    Are they ever just going to finally arrest Mark Zuckerberg?  Every month it's another bad thing.  At least China knows how to get their tech guys in line…

    China's disappeared: high-profile figures who have gone missing

    FB +1.70%Jan. 14, 2022 2:59 PM ET10 Comments

    • Meta Platforms (FB +1.1%) – and its Oculus virtual reality unit – are the next big targets in the Federal Trade Commission's antitrust crosshairs, Bloomberg reports.
    • The FTC and multiple states are investigating Oculus over potential anticompetitive action, and have reached out to application developers for Oculus' virtual-reality hardware for information.
    • The agency is seeking to explore how Meta may be using market power in the VR space to stifle competition – in particular whether the Oculus app store might be discriminating against third parties selling apps that compete with Meta's software.
    • The inquiry also includes a probe into sales practices and pricing for the Quest 2 headset, at $299 notably less expensive than many rival models, according to the report.
    • Also in hot virtual-reality news today, Apple is reportedly considering a delay in its own headset, a device that Evercore says will provide a big positive catalyst when launched

    T +1.18%Jan. 14, 2022 2:41 PM ET11 Comments

    • AT&T (T +1%) dominated spending in the latest FCC 5G airwaves auction, and was largely joined by Dish Network (DISH -0.1%) – and somewhat surprisingly, Verizon (VZ -0.5%) was absent, the agency has revealed.
    • The Federal Communications Commission unveiled bidders for the 3.45 GHz auction (Auction 110) that wrapped up in November.
    • Verizon (VZ -0.5%) and AT&T (T +1%) were widely expected to spend to catch their spectrum up to the holdings of T-Mobile (TMUS -1.7%), which had a sizable cache after wrapping its merger with Sprint. And AT&T did bid $9.1 billion of the total $21.9 billion bid.
    • Dish Network (DISH -0.1%), the upcoming fourth major national carrier, committed $7.3 billion in spending through a proxy. And T-Mobile (NASDAQ:TMUS) bid just under $3 billion. (U.S. Cellular (USM -0.6%) showed up with about $580 million in bids.)
    • Verizon (VZ -0.5%), though, looks content for now to lean on the heavy C-band spectrum it picked up in a record-setting auction last year. That auction drew a record $81 billion, and AT&T and Verizon accounted for $68.9 billion of that.

    MLCO +15.76%Jan. 14, 2022 2:37 PM ET3 Comments

    • Wynn Resorts (WYNN +7.8%), Las Vegas Sands (LVS +12.1%), MGM Resorts (MGM +0.0%) and Melco Resorts & Entertainment (MLCO +14.1%) are having the best day of the year after a gaming law amendment report issued early in the day relieved some tension over any drastic changes in the gaming mecca with licensing, regulation and taxation.
    • BTIG analyst David Bain thinks the proposed bill helps to remove a substantive overhang for Melco, Las Vegas Sands, Wynn, MGM, Galaxy Entertainment (OTCPK:GXYEF) and SJM Holdings (OTCPK:SJMHF). "While the weak operating environment of Macau should persist due to start-and-stop COVID restrictions and a somewhat disorderly unwinding of the VIP market, for those more interested in the long-term mass gaming and overall Macau story, today's announcement should be taken as welcome news," he notes.
    • In particular, Bain says avoiding a shorter five-year license period and not having government representatives needing to sit on operators' boardd could be considered a positive development.
    • Compare Seeking Alpha Quant Ratings in the casino sector.

  23. Have a great weekend, folks, 

    - Phil