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Inflationary Thursday – CPI Report Colors Our Week

We're waiting on inflation data this morning.

CPI is expected to come in at 0.5% for January but October was 0.9% and November was 0.8% and December was 0.5% but that was when Oil FELL from $80 to $65 to start the month and we finished at $75 so there's your 0.5%.  That did not happen in January as Oil blasted from $75 to $87.50 over the month. 

Core CPI excludes Food and Energy but headline CPI does not, so I wonder what our Leading Economorons are thinking when they predict January will be as low as December?  Yesterday morning, as we expected from Friday's discussion on rates and affordability, the Mortgage Application Index was down 8.1% and we can't read too much into one report but that's a pretty shocking decline.  Wholesale Inventories blasted up 2.2% in December (they are supposed to go down) and November was revised up from 1.4% to 1.7% so two big builds during holiday shopping season is not ideal in a robust economy.

Of course, you can leave 2.2% on the shelves if you are charging 10% more for the goods and it looks like you sold ((100 x 1.1) x 0.978) = 107.58 (7.58% more) goods than last year – even though all you did was sell less stuff for more money.  This is why Consumers (who are getting less stuff for more money) are not very confident – and we get that report tomorrow morning but, as you can see on the chart – we're on a track that looks more like the crisis of 2008/9 than record high market prices.

 Yesterday's 10-year note auction did not go well, notes going off at 1.929% – the highest level since November of 2019 – before the pandemic.  The last time they traded at 2% was August, 2019 and this is how the Fed's hand gets forced because, as much as they want to pretend there's no inflation, Bond Investors literally are not buying their BS and the wost thing the Fed can do is lose credibility so they are forced to raise rates to make it look like it was their idea and not the result of market forces that are out of their control.   

Dollars and Sense - When a Fire Starts to BurnThe next Fed meeting is March 16th and there are only 8 meetings all year and we burned January last week so there basically HAS to be a rate hike at the next meeting as the Fed can't set the benchark at 0.25% while investors are paying 2% for 10-year notes – it makes them look silly.

8:30 Update:  As we expected, CPI came in over expectations but only 0.6%, so not too terrible.  What is worrying is that Core CPI is also 6% and that's a running hot which means the Fed HAS to do something about it which means rates will rise which means the Dollar will rise and the indexes will fall this morning.

We'll see how much if a hit we take as I find it hard to believe people are going to be shocked by a report showing inflation is high – why do you think we call them Economorons?  They have no idea what's really going on in the World….  We've had a lovely run in our indexes in the past few days so we'll just see how much of it we give up but now, even the Junior Economorons must realize that tomorrow's Consumer Sentiment Index is likely to be BAD – so it's going to be a bumpy ride into the end of the week.

   

At the moment (8:40), we are still much improved from yesterday with the S&P having lost a red box (though not green yet) but the Nasdaq and the Russell still have a lot of work to do before we can call it a proper bullish trend and, as I noted on Monday – none of it matters if we don't finish the week with our weak bounces covered:

  • 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 15,675 has bounce lines of 15,840 (weak) and 16,005 (strong) 
  • Russell 2,400 to 2,080 has bounce lines of 2,144 (weak) and 2,208 (strong)

The Dow got more good news this morning as Disney (DIS) is up $12, which adds about 100 Dow points so the +70 we're seeing on that index this morning is more than 100 DIS.  We started the week at $135 so $160 is up 25 for the week and 200 Dow points out of 700 are DIS with AAPL putting in another 150, XOM 170 and CVX 145.  That's why the Dow is a stupid index – just 4 stocks can account for all the gains or losses in a week.

Still watching and waiting this week.  We're very well-hedged and well-balanced – just waiting for the market to give us a clear directional signal.

 


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  1. Good Morning!


  2. Good morning!  

    Not too much damage from CPI, already bouncing back from the initial selling – we'll see what sticks. 

    Crushed /NG unfortunately but I'm adding 2 more down here to bring avg to about $3.95 since I'm pretty sure it's the Dollar pushing us lower (Nat gas report comes at 10:30). 


  3. You guys sometimes ask me my opinion about Korean companies, and I'm always pretty negative. Here's a good write-up of reasons to stay away: https://www.koreatimes.co.kr/www/biz/2022/02/175_323668.html


  4. Don't you love it? Uber is up 2 bucks because they only lost .26 instead of .35? This market is truly amazing. And Disney raising fees so made more then they thought. Insanity reins. Found this stock which would be a Reddit darling VLDR which is 4.60 and has a 24% short interest. One for my grandson and the "Hood" crowd!


  5. SBUX -0.52%Feb. 10, 2022 9:44 AM ET

    Starbucks (NASDAQ:SBUX) fell 1.05% in opening trades on Thursday after the coffee giant was fined around 1.36 million yuan ($210K) by Wuxi Market Supervision Administration in the eastern Chinese city of Wuxi, Jiangsu Province. The fine was levied after two of its outlets in the city were found to have adjusted ingredient shelf life and used expired ingredients.

    "According to the surveillance video in the store, workers tampered, replaced and destroyed shelf life labels for food ingredients, and continued to use expired ingredients," read the statement from the local market regulator.

    The local investigations followed reports in the The Beijing News last year that revealed the outcome of an undercover investigation.

    SBUX headlines in China have sometimes impacted trading on Luckin Coffee (OTCPK:LKNCY). Analysts have factored in a small risk that Starbucks (SBUX) will face retaliatory action in China from the government if geopolitical tension rise. For its part, Luckin Coffee said last month that it is moving forward from a position of financial strength and remains focused on the continued execution of our growth strategy.

    Sector watch: China coffee sector heats up with upstart Manner growing and Luckin Coffee restructuring.

    Feb. 10, 2022 8:34 AM ET274 Comments

    Inflation continued to scale higher in January, as prices for food, electricity, and housing contributed the most to the increase, the U.S. Bureau of Labor Statistics said. That continued pricing pressure may push the Federal Reserve to get more aggressive on normalizing monetary policy.

    The 10-year Treasury yield spikes almost 8 basis points to 2.00%.

    January consumer price index +0.6% M/M vs. +0.5% expected and +0.5% prior.

    CPI +7.5% Y/Y vs. 7.3% expected and +7.0% prior. This represents the largest increase since February 1982.

    The food index increased 0.9% in January after a 0.5% rise in December. The energy index also rose 0.9%, with higher electricity prices partly offset by declines in gasoline and natural gas indexes.

    Core CPI, which excludes food and energy, +0.6% M/M vs. +0.5% expected and +0.6% prior.

    Core CPI +6.0% Y/Y vs. +5.9% expected and +5.5% prior.

    In the core index, prices for household furnishings and operations, used cars and trucks, medical care, and apparel all rose during the month.

    The continued pressure on prices could prompt the Federal Reserve to take stronger actions in controlling inflation.

    "Nothing in the data implies a peak & the conversation around the magnitude of coming Fed rate hikes will intensify even as year-ago base effects bring down the topline," said Joseph Brusuelas, RSM US chief economist.

    The U.S. dollar index rises 0.4% to 95.91.

    The CME FedWatch Tool now places a 48.2% probability of a 50bps rate hike in March vs. 24% on Wednesday.

    Economist Mohammed El-Erian notes that the sharp rise in the 2-year yield to over 1.40%, along with a flattening of the 2s10s shows that markets are "worrying about a late Fed forced into playing massive catchup."

    Previously (Jan. 29), Fight off rising inflation concerns with these ETFs

    SP500 -0.79%Feb. 10, 2022 9:30 AM ET22 Comments

    The stock market is selling off, as are bonds, as investors gear up for a hawkish response to a bigger-than-expected jump in January prices.

    "In one line: Ouch," Pantheon Macro's Ian Shepherdson wrote.

    The Nasdaq (COMP.IND) -1.8% is the hardest hit as rates climb. The S&P (SP500) -1.2% and Dow (DJI) -0.7% are also down, but faring better.

    The 10-year Treasury yield topped 2% for the first time since August 2019 (if you count three decimal places not four) but has backed off at that psychological level.

    Headline CPI came in at an annual rate of 7.5% for January, topping forecasts for 7.3%. The core CPI was also hot at 6%, ahead of expectations for 5.9%.

    "US January CPI: primary drivers of inflation have not changed: energy, transportation & industrial goods," RSM economist Joseph Brusuelas tweeted. "Nothing in the data implies a peak & the conversation around the magnitude of coming Fed rate hikes will intensify even as year ago base effects bring down topline."

    The Treasury yield curve is flattening. The 10-year Treasury yield is up 6 basis points to 1.99%, but the 2-year, more sensitive to Fed hikes, is up 13 basis points to 1.48%.

    Fed swaps are now pricing in the fed funds rate hitting 1% by July (four meetings).

    "Quite a reaction in yields on US government #bonds with spillovers for other asset classes," Mohamed El-Erian tweeted. "This includes a sharp rise in the 2-year yield to above 1.40% together with a flattening of the 2s-10s. Bottom line: #Markets worrying about a late #Fed forced into playing massive catchup."

    "The good news in this (NYSEARCA:CPI) report – really – is that new vehicle prices were unchanged, after eight straight monthly increases of more than 1% per month," Shepherdson added. "This is a significant development. Rising inventory, on the back of increasing chip supply, is both boosting sales and capping prices. We expect new vehicle prices to fall outright over the next few months."

    "Used vehicle prices will fall too. They rose 1.5% in January, consistent with rising auction prices a couple months ago, but auction prices appear now to be falling and the CPI measure will follow. Used vehicle inflation is 40.5% y/y, compared to the zero pre-Covid trend, so they have a long way to fall."

    See the stocks making the biggest moves this morning.

    DIS +5.43%Feb. 10, 2022 9:17 AM ET3 Comments

    Walt Disney (NYSE:DIS) shares surged in premarket trading on Thursday after the entertainment giant posted strong first-quarter results that Bank of America were nothing short of a "Hulk smash," giving a nod to the popular Marvel character.

    Analyst Jessica Reif Ehrlich noted that the results were largely driven by the company's Disney+ direct-to-consumer segment, as well as "significantly better" results from its parks, experience and products business, which generated $2.45 billion, compared to estimates of $1.35 billion.

    As a result, Reif Ehrlich "significantly" raised her earnings estimates for fiscal 2022 to $4.18 per share, up from a prior outlook of $3.34 per share, due to the first-quarter results and "improving PECP trajectory."

    During the quarter, Disney added roughly 11.8 million Disney+ subscribers, totaling 129.8 million. Across all subscriptions, Disney ended the period with 196.4 million subscribers, including 45.3 million for Hulu.

    For the quarter, Disney earned $1.06 per share on $21.82 billion in revenue, compared to estimates of 63 cents per share and $20.99 billion in sales.

    Disney (DIS) shares rose nearly 7% to $157.26 in premarket trading on Thursday.

    In addition, Reif Ehrlich added that near-term catalysts for Disney include "continued theme park improvement/recovery," along with direct-to-consumer rollouts in new countries and "increased content output in 2HFY22 and potential price increases."

    Earlier this week, Disney received the second-most Oscar nominations among film studios, second only to Netflix, led by "West Side Story's" seven nods.


  6. The Unilever (UL) butterfly position from 2 days ago is an even better buy today; UL reported earnings, and surprise surprise, inflation hit them and prices are going up.

    On a related note, https://www.cnbc.com/2022/02/08/bank-of-englands-bailey-faces-backlash-after-discouraging-pay-rises.html.

    He has a point. If only the unwashed masses stopped using soap and eating, the price of soap and food would not go up.


  7. Snow- I had what I thought was a cold for 10 days, no fever but I couldn't get any at home tests. Now I hear the at home tests are not reliable. My Doc ordered the covid PCR but I would have had to get to the hosp or clinic which is over an hour away to get it. Just wondering of how many undiagnosed people are slipping through the "official" count. I isolated for two weeks, but I was frustrated, to say the least. We were never able to get the supposedly "free" masks either. And of course you can't find any N94 or 95's either. WBA said they hadn't come in. After two years of this one truly wonders about the veracity of any count from the govt.


  8. The Bug/Pirate – well, surveillance data are never clinical-diagnosis perfect. Part of what we learn as epidemiologists is where the missing data most likely are, and the ways to adjust for that. For example, a technique we shamelessly stole from wildlife ecologists is called "capture-recapture". The Census people proposed using that a few years ago, and were met with cries of "count everyone!" (which, by the way, is simply not possible). I haven't heard of capture-recapture being used to adjust covid data, but there's so much out there I could've missed.

    I probably mentioned it here, but what I'm watching is sewage (so you don't have to): https://biobot.io/data/


  9. China Plans More Rules to Ease Academic Burden on Children





  10. US inflation jumped 7.5% in the past year, a 40-year high


  11. Gay Veggie Burgers?  Geez, florida…..


  12. Snow- Thanks yes I did read about the sewage monitoring which is basically urban areas which I presume has easier access to services. I still have a persistent cough and we are losing about 2 people a week in No country of all ages who were vaccinated. Our little enclave is under attack it seems. I do read the CIDRAP too. It seems from pure anecdotal evidence that flying is very suspect. Friends are always isolating because family members came back or visited and tested positive. We are all getting very weary of this constant, never-ending stress.


  13. Snow – Thanks for the article. Been looking at more international diversification and will definitely avoid Korea. 


  14. We were discussing picking up a travel stock yesterday and they all seem overbought but LVS is not too bad.  Shelly died so new management and it is a bad time to lose him as China/Macau is iffy and he had personal connections that may not continue – that's the big knock on them but I think it's priced in at $46.82.

    They used to make $2.5Bn and lost $2.5Bn in the past two years and will be lucky to make $2.5Bn in 2022/3 combined but THEN, going forward, $36Bn is not too bad a price to pay.  The main worry I have with LVS is that they sold their Vegas properties so they are very Asia-Centric now but, when China lifts covid restrictions – they can really pop.  

    So, for the LTP, let's just Sell 10 2024 $40 puts for $6.40 ($6,400), which nets us in for $33.60 – that's a good initial entry.

    Also, let's hedge our bet with Vegas-centric MGM, which is at $48.30 but we can sell 10 2024 $40 puts for $6 ($6,000) to net in for $34.

    MGM looks toppy but a very reasonable $22.7Bn and they make $2Bn in a good year and "only" lost $1Bn last year so arguably stronger than LVS.

    UL/RN – Not too much damage and, of course, our goal is for them to be fairly flat.

    Bailey is just saying the quiet part out loud.  The CBs work for the Banksters and our Corporate Masters and don't give a crap about the general public or their countries, for that matter.  That's just too funny – "combat inflation by refusing to take a raise"!  We are so doomed….

    However, the governor’s comments were seen as grossly insensitive, not least because his latest annual pay packet was worth over £575,000 ($777,115) — 18 times the U.K. average for a full-time employee.

    Britain is currently battling soaring living costs, with household finances already stretched and post-tax incomes forecast to fall 2% this year.

    Inflation usually helps the economy at large, but not the 1% if wages rise.  So

    TOP 25 INFLATION QUOTES (of 410) | A-Z Quotes

    12 Inflation Quotes & Sayings with Wallpapers & Posters - Quotes.Pub

    Positive Quotes For The Day : Standard of Living???????????? Inflation @DocDarB  #DariaBrezinski???????????? - Quotess | Bringing you the best creative stories  from around the world

    Thomas Jefferson warned us against the power of the banks... - Framing  Bitcoin

    Good article, Snow.

    VLDR/Pirate – Pre-profit almost penny stock.  Don't know enough about them to say their Lidar is better than others.

    Counts/Pirate – Clearly way underreported.  Think of how many red state people have "very bad cold" and never get tested or treated – so not counted.  Home testing even lowers reporting further.  My daughter and brother had Covid recently and no one counted them (NJ and FL).  That's why,. with statistics, you can only look at the deltas – the raw numbers are fairly meaningless due to sampling and reporting errors.  

    Cases are way down from peak but that's still 6M people a month getting Covid (2% of the population) and, again, that's likely way under-reported.  Also, coming off the holiday gatherings and before schools restarted of course things calmed down.  As we expected, deaths are a lagging indicator – still rising at a nasty pace.  A stadium full of people are dying each month, a 9/11 every day - and it's not considered a National Crisis.  In fact, we're being told to "learn to live with it."  

     

    It blows my mind how a person could see this chart and be anti-vax.

    Wastewater/Snow – The great equalizer, I guess.  Seems like we have more active cases than ever now, right?  

    Florida/1020 – So proud.  Living down here, there is nothing you hear in the local news that can be so ridiculous that you think it's fake. I think for the first year or so, I would check to see if these things really happened but, after a while, you start accepting the headlines at face value.  

    Stress/Pirate – Try not to, it diminishes your immunity.  That helps in Florida – we don't stress about Covid because you wouldn't even know it exists if you didn't read about it in the papers.  Seems like some kind of Northern problem like lime disease (we have gators and snakes in our bushes – not deer).  

    A stag had drunk water, suddenly crocodile jumped and attacked him - GIF on  Imgur


  15. Of course, that's what makes golfing exciting down here…


  16. " there is nothing you hear in the local news that can be so ridiculous that you think it's fake"

    Interesting. I had the same reaction when I moved to CA. 

    Whatever, sunshine and 85 degrees in Feb. and surf's up dude!


  17. pstas/CA  Do we have 'Progressive' views and opinions? Yes…Are we Bat Sh*t crazy, No.

     

     

    Surf's up dude….


  18. Comment content omitted because it is too long.


  19. Oil made a big move up but /NG just laying around so far.

        

    Summary

    Working gas in storage was 2,101 Bcf as of Friday, February 4, 2022, according to EIA estimates. This represents a net decrease of 222 Bcf from the previous week. Stocks were 441 Bcf less than last year at this time and 215 Bcf below the five-year average of 2,316 Bcf. At 2,101 Bcf, total working gas is within the five-year historical range.

    For information on sampling error in this report, see Estimated Measures of Sampling Variability table below.

    Working Gas in Underground Storage Compared with Five-Year Range

    XOM -0.03%Feb. 10, 2022 10:34 AM ET21 Comments

    The Bureau of Labor Statistics monthly CPI reports are generally quoted on an "ex food and energy" basis; however, higher energy costs are beginning to make their way into consumer price headlines, following a 27% rise year on year in January.

    Market commentators, and at times the Federal Reserve, like to exclude energy-price inflation from forward looking assessments, given historic volatility and a tendency for prices to revert to historic averages. Consumers, however, are well aware of energy's impact on prices for everyday items of late. In January, the price for gasoline rose 40% from a year ago. Natural gas prices were up 24%, lifting consumer heating bills. Electricity prices also increased, marking an 11% rise in the past year.

    Historically, rising energy prices have led to additional capital investment from commodity-producing companies (oil, gas, coal, etc.), resulting in more balanced markets and lower prices. Whether energy prices revert to historic averages this time around remains to be seen.

    Gasoline prices are directly tied to the price of oil. With oil inventories in the US falling at record rates, and prices hitting multi-year highs, consumers might expect oil companies to accelerate production growth. They are not. Exxon (NYSE:XOM), Chevron (NYSE:CVX), Conoco (NYSE:COP) and BP (NYSE:BP) all reported 2021 results in the past two weeks and provided production guidance for 2022 — all four companies forecast flat year-over-year production growth, despite higher prices.

    On the electricity front, coal remains the second largest source of generation nationwide. Unfortunately for US consumers, coal trades on a global market, and reduced nuclear power generation in Europe has resulted in coal prices reaching record highs. US producers CONSOL (NYSE:CEIX) and Peabody (NYSE:BTU) reported earnings this week; both companies told shareholders to expect rising cash flows to be allocated to balance sheet repair rather than increased production.

    Natural gas prices may offer some reprieve for consumers in the months to come. Outside of the United States, an historic energy shortage has driven natural gas prices in Europe and Asia to all-time highs. Up ~500%+ year on year, to levels that are more than 6x those seen in the US. And although the US has become the largest exporter of natural gas globally, export capacity has been unable to keep up with America's ability to produce (NYSE:EQT) (NASDAQ:CHK) (NYSE:RRC). Following a cold winter and some brief supply worries, natural gas prices have fallen by ~30% from recent highs.

    Whether market commentators and Fed officials begin including energy costs when assessing economic and market conditions remains to be seen (NYSEARCA:TIP). However, higher energy prices appear likely to remain a burden to consumers' wallets for the foreseeable future.

    Feb. 10, 2022 10:29 AM ET3 Comments

    With the rate of inflation grabbing so many headlines since the pandemic, it's worth taking a deeper look into how the consumer price index is aggregated. Primarily, the consumer price index provides a gauge for how much people are paying for goods and services.

    To start, the CPI reflects the spending patterns of two population groups — all urban consumers and urban wage earners and clerical workers, the Bureau of Labor Statistics points out. The all-urban consumer group represents ~93% of the total U.S. population, and is based on the expenditures of almost all residents of urban or metropolitan areas, including professionals, the self-employed, the poor, the unemployed, and retired people as well as urban wage earners and clerical workers.

    The gauge, though, doesn't include the spending of those people living in rural nonmetropolitan areas, farming families, people in the military, and those in institutions, such as prisons and mental hospitals.

    The BLS collects prices on food, clothing, shelter, fuel, transportation, doctors' and dentists' services, drugs, and other goods and services that people buy for day-to-day living. The data is collected in 75 urban areas across the country from about 6,000 housing units and ~22K retail locations (such as department stores, supermarkets, filing stations, and hospitals.) Taxes directly associated with the purchases are also included in the data,

    Price changes for the various items in each location are aggregated using weights, which represent their importance in the spending of the appropriate population group, the BLS said.

    And with January's CPI report, the weightings of the indexes have changed. They're now based on consumer spending patterns across 2019 and 2020, replacing the weights based on spending in the two previous years, Pantheon Macro points out. And since consumer spending patterns shifted significantly towards goods and away from services in 2020 due to the pandemic, that will affect this year's CPI readings.

    "The outcome of this exercise will be that the weighting of services hit by the pandemic, including lodging, food service, recreation, personal car services spending on haircuts fell in 2020, a lot — will fall significantly, while the weighting of housing costs, which already are the biggest element of the core CPI, by far, will rise modestly," Pantheon said. In the goods sector, weightings of vehicles and clothing will dip slightly, the firm said.

    The index measures also based on a reference date. The CPI all urban and the wage earner indexes have a reference base of 1982-84 equal to 100. The reference base for the core CPI all urban index is December 1999=100.

    Earlier, Consumer inflation climbs most in 40 years, 10Y UST yield tops 2%

    BLD -0.29%Feb. 10, 2022 10:21 AM ET4 Comments

    • 30-year fixed-rate mortgage averaged 3.69% with an average 0.8 point for the week ending Feb. 10, 2022, up from last week when it averaged 3.55%; higher than 2.73% a year ago, according to the Freddie Mac Primary Mortgage Survey.
    • Rates have jumped to the highest level since the emergence of the pandemic; "Rate increases are expected to continue due to a strong labor market and high inflation, which likely will have an adverse impact on homebuyer demand," chief economist Sam Khater commented.
    • The 10-year Treasury yield also moved higher to 1.92% from 1.78% last week.
    • 5-year fixed-rate mortgage averaged 2.93% with an average 0.8 point, up from last week when it averaged 2.77% and a year ago at this time, the 15-year FRM averaged 2.19%.
    • 5-year Treasury indexed hybrid adjustable-rate mortgage averaged 2.80% with an average 0.3 point, up from last week when it averaged 2.71% and a year ago at this time, the 5-year ARM averaged 2.79%.
    • Fed Reserve indicated that it would commence series of interest rate hikes in March; with housing supply being short even before the pandemic, rising interest rates and higher prices will make it even harder to buy a new home.
    • Mortgage applications decreased 8.1% from the previous week, a response to an uptick in mortgage rates and record houses prices, as per the MBA survey for the week ending Feb. 4.
    • The average loan size again hit another record high at $446K; seasonally adjusted refi index fell 7.3% while the purchase index dropped 9.6%.
    • Demand for home loans dropped by 8.1% last week as mortgage rates continued their surge.
    • As cited by Reuters, overall mortgage demand is now down 39.6% Y/Y led by a 52% Y/Y refinance dropoff.
    • Homebuilding stocks are all trading in the red in early trading hours: (NYSE:DHI)(NYSE:LEN)(NYSE:TOL)(NYSE:PHM)(NYSE:MTH)(NYSE:BLD)


  20. Preferred Apartment Communities (NYSE:APTS) soared 18% after a report late Wednesday that the apartment REIT is said to be evaluating a full or potential sale after getting takeover interest.

    APTS, a REIT which owns retail and multifamily properties, is in the early stages of considering its options, according to a Bloomberg report.

    A potential sale of APTS comes after Blackstone (NYSE:BX) agreed to acquire Bluerock Residential (NYSE:BRG), a competitor to APTS, for $3.6B in December. The news also followed a Reuters report in late December that investment firm Arkhouse Partners was said to be seeking to take control of the APTS board and had nominated five directors.

    "With many apartment REITS trading at discounts to NAV (or higher implied cap rates), it is reasonable to think that there could be more takeouts in the sector," Colliers analyst Barry Oxford wrote in a note. "Simply put prices for apartment buildings are cheaper on Wall Street than on Main Street.

    Oxford raised his price target for APTS to $24 from $18 and using a mid-to-high 3% cap rate(where BRG deal was done) he sees a NAVPS of $30. Using a cap rate in the low-to-mid 4%, he gets an approximate NAVPS of $25.

    Collier's Oxford believes there's an "above average" likelihood of APTS being acquired, though he warns the shares could pull back to $18/share without a deal.

    APTS is scheduled to release Q4 results on Feb. 28.

    Uber Technologies (NYSE:UBER) gave up earlier gains as it held its first investor day, one day after it reported strong fourth-quarter results and issued first-quarter guidance.

    At the investor day, Uber finance chief Nelson Chai said the company expected adjusted earnings of $5 billion by 2024, with gross bookings expected to be between $165 billion and $175 billion.

    Uber shares, which had been up nearly 5% earlier in the session, were recently changing hands at $39.86, down nearly 1%, after shares resumed trading, following a brief halt.

    On Wednesday, Uber (UBERsaid it earned 44 cents a share on $5.78 billion in revenue, as revenue from delivery surged 77% year-over-year to $2.42 billion. The results topped the forecasts of Wall Street analysts, who estimated Uber (UBER) would lose 33 cents a share on $5.36 billion in revenue

    The company's results got a boost from Uber's (UBER) freight business, which saw sales top $1 billion, a gain of 245% from a year ago. Adjusted EBITDA during the period came in at $86 million, compared to a loss of $454 million in the year-ago period.

    Uber's (UBER) take rates, or the amount of revenue it generates as a percentage of gross bookings, were mixed in the quarter, with mobility falling to 20.1%, compared to 21.7% in the year-ago period. Delivery take rate, however, rose significantly, coming in at 18%, versus 13.5% in the year-ago period.

    For its first quarter, Uber (UBER) said it expects gross bookings to be between $25 billion and $26 billion, with adjusted EBITDA between $100 million and $130 million.

    On Thursday, Wedbush Securities said that Uber's results and guidance were a "big step in the right direction" for the Dara Khosrowshahi-led firm.

    CCJ +3.09%Feb. 10, 2022 11:44 AM ET4 Comments

    Wednesday, uranium juggernaut Cameco (NYSE:CCJ) reported earnings, indicated the contracting cycle has inflected, and marked the beginning of a new bull market for uranium (NYSEARCA:URA). The market agreed; Cameco shares traded 15% higher, and continued to rally Thursday morning. On the back of the Cameco report, Sprott Uranium Trust (OTCPK:SRUUF) announced the purchase 500k lbs of physical uranium Wednesday alone. And Thursday, Macron announced additional plans for his "nuclear renaissance."

    Sprott made headlines in 2021, as the company launched the world's first investment product designed to provide retail investors with direct exposure to the physical uranium market. The product acquired 21m lbs of uranium as of July 2021, enough to meet global demand for almost two months. Since that time, the trust has more than doubled its holdings. And Wednesday alone, the Trust purchased 500k lbs, bringing the 2022 total to 3.6m lbs.

    Just as retail investors soak up spot-market supply, France's Macron announced plans to increase uranium demand. On the campaign trail, Macron promised to shut down 14 of the country's 58 aging reactors; Thursday, he announced plans to extend the lives of France's reactors from 40yrs to 50yrs. Additionally, Macron announced that France will build 14 new nuclear reactors as part of the Country's energy renaissance.

    With the low-carbon energy transition struggling to meet growing global energy demand, nuclear has fallen into favor with political leaders of late. Europe recently proposed including nuclear energy in the sustainable energy "taxonomy," paving the way for climate-conscious investors to take a second look at the uranium sector.

    BTC-USD +3.02%Feb. 10, 2022 11:44 AM ET4 Comments

    Fitch Ratings on Thursday cut El Salvador further into junk territory, citing risks from last year's move to adopt bitcoin (BTC-USD) as legal tender, along with other BTC-related initiatives.

    Specifically, the adoption of BTC as legal tender had added uncertainty about the potential for an International Monetary Fund ("IMF") program that would unlock financing for this year and the next, according to the report. In January, the IMF urged El Salvador's government to remove BTC's status as legal tender. Fitch also cited a "high degree of uncertainty" for external financing options surrounding the capacity to issue bitcoin (BTC-USD) backed bonds through new distribution channels. Recall at the beginning of January when El Salvador prepared 20 bills to provide a legal foundation for issuing bitcoin bonds.

    The basis of the downgrade also reflects the country's increased "reliance on short-term debt, an USD800 million Eurobond repayment due in January 2023, a still-high fiscal deficit, limited scope for additional local market financing, uncertain access to additional multilateral funding and external market financing given high borrowing costs," the report read.

    Speaking of bitcoin (BTC-USD +2.4%), the world's largest digital token by market cap initially slumped after January's CPI overshoot, and shortly thereafter whipsawed back over $45K, recently changing hands at $45.2K.

    Previously, (Nov. 22, 2021) El Salvador planned for "Bitcoin City."

    GOOS -15.36%Feb. 10, 2022 11:11 AM ET1 Comment

    • Despite double digit revenue growth, Canada Goose Holdings (GOOS -15.5%) down as EPS missed the consensus mark in FQ3.
    • The company's share is also suffering due to FY2022 guidance cut driven by COVID restrictions and lower-than- expected revenue and retail traffic in APAC and EMEA in the current quarter.
    • Omicron-related restrictions has impacted the demand for the company's luxury parkas and footwear.
    • Gross margin rate was 70.6% vs. 66.8% year ago and consensus of 70.1%.
    • The company has issued downside outlook for FY22, sees revenues of C$1.09B – C$1.105B vs. consensus of C$1.15B and prior guidance C$1.125B – C$1.175B; Adjusted EPS of C$1.02 – C$1.11 vs. consensus of C$1.33 and prior guidance of C$1.17 – C$1.33;


  21. pstas,1020/ca – "Progressive" only this side of the mountains and south of the American River….

    and the legendary LA Westside liberals are a myth.


  22. snow - progressives. are. everywhere…. ;)


  23. This is why the Butterfly Portfolio is making so much money – just sticking to our zones.  Last month, we were here:

    And I said:

    DIS – The stock is at $137 so the short April $160 puts are an issue at the moment but the short calls will expire worthless so let's wait and see how bad next week is before adjusting.

    The short calls were going worthless and we already rolled down the longs in December and we still liked our April target and, at the bottom of the channel, we left it uncovered.   We were at net $78,000 at the time and now $147,900 – up $69,900 (89.6%) on earnings.  

    DIS Short Put 2022 14-APR 160.00 PUT [DIS @ $153.70 $6.47] -20 11/19/2021 (63) $-27,400 $13.70 $-2.90 $-45.05     $10.80 $-6.28 $5,800 21.2% $-21,600
    DIS Long Call 2024 19-JAN 140.00 CALL [DIS @ $153.70 $6.47] 50 12/21/2021 (708) $165,000 $33.00 $0.90     $33.90 $3.85 $4,500 2.7% $169,500

    We are not taking big risks in the Butterfly Portfolio but that doesn't stop us from making big gains.  We exceed our core strategy by simply playing the channel, which is $140 to $180 and we get more aggressive at $140 and more hedgy at $180 and, in this case, we rolled our longs lower at about $145 in Dec (we don't call a bottom, we just KNOW we're always happy to pay $5 for $10 of position on our longs) and then we waited PATIENTLY for a bounce.  

    We have our negative strategies, of course.  We could have sold $140 calls if the $140 line failed and used that money to roll our longs lower.  Then we could have sold some short-term calls and, of course, used that money to roll our longs lower again.  The puts were April and the Jan $140 puts are $10 and the 2024 $120 puts are $10 and, as value investors, we don't consider that risky – therefore we're not worried about riding out the April $160 short puts.  We sold them for $13.70 anyway, so our net was just $146.30.  

    For the most part, we just let the Butterfly positions do what they do but, when we see a move down that we STRONGLY disagree with – it's almost a reflex to act and improve the position.  Since we work almost exclusively with Blue Chip companies that we don't mind getting "stuck" with – we don't mind taking the occasional risk and getting aggressive when it's called for.  

    Now we look to see if it's worth covering again and, since we can get $4.50 for the DIS April $160 calls – it would be foolish not to sell 20 of those for $9,000 and we'll also sell 30 of the 2023 $180 calls for $16 ($48,000) and PRESTO, we've locked in $57,000 of our $70,000 gains and still left ourselves in great position to sell more calls if it weakens or roll our short Aprils higher if it doesn't.

    The system in our Butterfly Portfolio is mostly hands off but we do take advantage of these little dips when appropriate and, over the 4 years it's been running – it's been one of our best performers, despite the generally conservative set-ups.  Now it's just a beast of a money-machine as we are miles ahead of where we started and all we have to do is BE THE HOUSE – and keep selling those quarterly premiums.


  24. I have 15 UNG 8 Apr calls covered by 25 Apr 13 calls, sold extra covers the day of the recent spike. Would you suggest riding the spread out till expiration or would you buy back at least some of the extra short calls? TIA


  25. And I should have mentioned – AND put $57,000 CASH!!! into the portfolio with those sales while REDUCING our net exposure (can't lose on the April $160 puts and calls at the same time and it's a fair target still).  That's another thing with the Butterfly Portfolio and why it currently sits on $1M in CASH!!! – we always look for ways to bring in more cash.  

    Security Value:  $555,675
    Cash on Hand:  $952,472
    Total Value:  $1,508,147
    Portfolio Ret.:  654.1%

    AAAPL also popped $100,000 since our last review!

    This is one of those times when things are going so well I feel like we should cash in and go on vacation.

    January 27th, 2022 at 4:55 pm | (Unlocked) | Permalink 

    What a company!  Also looking good in our Butterfly Portfolio.

    AAPL Long Call 2023 20-JAN 120.00 CALL [AAPL @ $159.22 $-0.47] 160 1/20/2021 (358) $448,000 $28.00 $17.60 $10.94     $45.60 $-0.19 $281,600 62.9% $729,600
    AAPL Short Call 2023 20-JAN 150.00 CALL [AAPL @ $159.22 $-0.47] -160 1/21/2021 (358) $-360,000 $22.50 $3.45     $25.95 $-0.35 $-55,200 -15.3% $-415,200
    AAPL Short Put 2023 20-JAN 125.00 PUT [AAPL @ $159.22 $-0.47] -40 9/20/2021 (358) $-42,000 $10.50 $-2.85     $7.65 $-0.20 $11,400 27.1% $-30,600
    AAPL Short Put 2024 19-JAN 120.00 PUT [AAPL @ $159.22 $-0.47] -20 10/15/2021 (722) $-25,500 $12.75 $-2.50     $10.25 $-0.05 $5,000 19.6% $-20,500
    AAPL Short Call 2022 14-APR 155.00 CALL [AAPL @ $159.22 $-0.47] -40 12/22/2021 (77) $-86,000 $21.50 $-8.73     $12.78 $-0.23 $34,900 40.6% $-51,100

    It would have been foolish not to protect our 160 long spreads so we did sell 40 (1/4) short calls to cover.  Hopefully it doesn't run away on us but, like AMZN, we can always sell short puts and roll them up until, one day, we hit the middle of the shorts and they both go worthless.  

    You don't have to be clever, just patient and persistent…

    Today: 

    AAPL Long Call 2023 20-JAN 120.00 CALL [AAPL @ $174.61 $-1.67] 160 1/20/2021 (344) $448,000 $28.00 $31.10 $10.94     $59.10 $-0.60 $497,600 111.1% $945,600
    AAPL Short Call 2023 20-JAN 150.00 CALL [AAPL @ $174.61 $-1.67] -160 1/21/2021 (344) $-360,000 $22.50 $12.75     $35.25 $-1.10 $-204,000 -56.7% $-564,000
    AAPL Short Put 2023 20-JAN 125.00 PUT [AAPL @ $174.61 $-1.67] -40 9/20/2021 (344) $-42,000 $10.50 $-6.45     $4.05 $-0.05 $25,800 61.4% $-16,200
    AAPL Short Put 2024 19-JAN 120.00 PUT [AAPL @ $174.61 $-1.67] -20 10/15/2021 (708) $-25,500 $12.75 $-5.35     $7.40 $-0.10 $10,700 42.0% $-14,800
    AAPL Short Call 2022 14-APR 155.00 CALL [AAPL @ $174.61 $-1.67] -40 12/22/2021 (63) $-86,000 $21.50 $0.30     $21.80 $-1.35 $-1,200 -1.4% $-87,200

    Not clever, just patient and persistent…


  26. UNG/Hwtdr – Well, I'm bullish on /NG from here so I'd cash out the extra longs.  You made an aggressive sale and had good timing so great – but don't be greedy – especially as your longs are also April so you have no time advantage in your favor and the $13s are in the money.  I would just consider it fortunate and cash in.  


  27. Dow down 250 again?  Very choppy trading.  


  28. that us ten year is getting up there. 2.04


  29. snow – that biobot site is pretty awesome


  30. Butterfly/Phil – Can you describe a little more the adjustment strategies? For example, we have BYD in the butterfly portfolio, and are short the march $65 calls. The overall position will be significantly profitable come the 2023 expiration, but lets assume BYD jumps up to 75 or 80 come March. How will you adjust the calls? 


  31. PHIL Do we have a trade on ERJ searched for it it didnt show up





  32. Well, that was the straw that broke the market's back:

    SP500 -0.83%Feb. 10, 2022 1:15 PM ET52 Comments

    The stock market is retracing losses after St. Louis Fed President James Bullard said he is looking for the fed funds rate to hit 1% by July.

    The S&P 500 (SP500) -1.5%, and Dow (DJI) -1.2% fall to new session lows, while the Nasdaq (COMP.IND) -1.6% approaches its session low of -1.9% touched soon after the market opened.

    Rates are moving even higher, with the 10-year Treasury yield topping 2% for the first time since August 2019.

    Bullard backed a half-point rate hike in the first half of the year and fed swaps are now pricing in a 75% of a 50-basis-point raise in March and fed funds hitting 1% in three meetings.

    All but one of S&P sectors are in the red, with Materials at breakeven. Energy is among the least weak sectors at -0.6%. Utilities and IT slump the most.

    Headline CPI came in at an annual rate of 7.5% for January, topping forecasts for 7.3%. The core CPI was also hot at 6%, ahead of expectations for 5.9%.

    The Treasury yield curve is flattening. The 10-year Treasury yield is up 9 basis points to 2.02%, but the 2-year, more sensitive to Fed hikes, is up 18 basis points to 1.53%.

    "Quite a reaction in yields on US government #bonds with spillovers for other asset classes," Mohamed El-Erian tweeted. "This includes a sharp rise in the 2-year yield to above 1.40% together with a flattening of the 2s-10s. Bottom line: #Markets worrying about a late #Fed forced into playing massive catchup."

    "The good news in this CPI report – really – is that new vehicle prices were unchanged, after eight straight monthly increases of more than 1% per month," Shepherdson added. "This is a significant development. Rising inventory, on the back of increasing chip supply, is both boosting sales and capping prices. We expect new vehicle prices to fall outright over the next few months."

    "Used vehicle prices will fall too. They rose 1.5% in January, consistent with rising auction prices a couple months ago, but auction prices appear now to be falling and the CPI measure will follow. Used vehicle inflation is 40.5% y/y, compared to the zero pre-Covid trend, so they have a long way to fall."

    Among S&P moves, Disney is one of the best gainers after strong results, while Lumen Technologies is the big decliner.

    And NOW /NG goes higher – go figure. 

    BYD/Rn – That's in the LTP, not the Butterfly Portfolio but we're using that kind of set-up, which was:

    CZR/8800 – That ship has sailed at $22.5Bn.  How are they going to make $1Bn before the next time they go BK?  They lose $1.7Bn last year and they'll lose about 350M this year – they are going on on-line to save them.  BYD is $7Bn at $62 and they make about $500M and only lost $135M last year and back on track this year – much better and $7Bn is not crazy for those earnings.  BYD has 28 low-rent casinos but nothing wrong with that if they make money.  I think gaming makes a nice bonus for them so let's add a play on BYD to the LTP:

    • Sell 10 BYD 2023 $50 puts for $6.50 ($6,500) 
    • Buy 20 BYD 2023 $55 calls at $16 ($32,000) 
    • Sell 20 BYD 2023 $75 calls for $8.50 ($17,000) 
    • Sell 5 BYD Jan $70 calls for $4 ($2,000) 

    That's net $6,500 on the $40,000 spread that's $14,000 in the money to start so the upside potential is $33,500 (515%) at $75 or better.  We made a 1/4 sale of short calls using 144 of our 508 days.  Three more sales like that and we have a free spread so no reason to press our luck.  Worst case is owning 1,000 shares at net $56.50 – still 10% off the current price.

    That went perfectly for us as the short $70 calls just expired worthless and NOW they are taking off.  So our first short call has put $2,000 back in our pockets but still net $6,500 as we already counted them in our net and the current net is $18,475 so we're miles ahead already – halfway to our goal after just 6 months with 11 to go.  $75 was our target so we see if that has changed but most likely we'll follow through with our intended strategy and sell 5 June $75 calls which are now $5 and that puts another $2,500 in our pocket and drops our basis to $4,000.  Unless we strongly feel our target should be higher – it's not likely we'll sell short puts unless there's a pullback.  The June $60 puts are $2.40 but they were $9 two weeks ago.

    If the stock goes up to $80 – we only owe the June $75 caller their $5 back (but we'd roll them along to a higher strike in a longer month) and, of course, that would put our underlying position $40,000 in the money with a $36,000 profit less whatever we have to buy the short calls back for.

    ERJ/Bert – It's in the Future is Now Portfolio:

    ERJ Long Call 2024 19-JAN 15.00 CALL [ERJ @ $15.32 $-0.09] 20 12/6/2021 (708) $8,780 $4.39 $0.96 $4.39     $5.35 $0.35 $1,920 21.9% $10,700
    ERJ Short Call 2024 19-JAN 20.00 CALL [ERJ @ $15.32 $-0.09] -20 12/6/2021 (708) $-6,000 $3.00 $0.50     $3.50 - $-1,000 -16.7% $-7,000
    ERJ Short Put 2024 19-JAN 15.00 PUT [ERJ @ $15.32 $-0.09] -5 12/6/2021 (708) $-2,400 $4.80 $-0.40     $4.40 - $200 8.3% $-2,200




  33. BYD – we sold March $65 calls for 2.2 in the Jan portfolio review (https://www.philstockworld.com/2022/01/19/philstockworld-january-portfolio-review-part-1/). So come March, if the stock is where it is now, we buy back the $65s for ~$6-7, and roll to the June 75s for $5 or so (maybe instead of selling 5 short calls against the 20 in the BCS, we sell slightly more to ensure the roll is not a loss?)


  34. BYD/Rn – Ah, I haven't logged it yet.  So  we'll just roll those along if needed.  We don't react to every little market move.  It's like renting out an apartment – you can't freak out every time the price of the apartment goes up and down – you buy it to rent it out and, over the long haul, you expect the value to work out.  It doesn't always or all of our portfolios would be up 500% but, when you aim for 500% and miss and make 100% – that's OK as well.

    At any given time it's about what you think BYD will do over the next Q.  If it's at $80 – it will likely seem stretched and we could do a 2x roll to 20 short Sept or whatever $80s and, if it keeps going up, then we could add 20 of the 2024 $75/95 bull call spreads while keeping tight stops on the Jan $55 calls, etc.  It's like a chess game – once you look a few moves ahead, there are hundreds of possible combinations.  The key is to remember that SELLING PREMIUM gives us the best overall chance of success so, whenever we can, that is our default strategy (assuming there are no other mitigating factors – like DIS being too low in the channel last month).  


  35. 1020-snow just saw the horrendous fires taking off in Laguna Beach with the SAnta Ana's picking up. We are expecting another blizzard. San Diego is record at 91. Wow hottest on record ever in Feb. There is no justice.


  36. We're very well-balanced overall.  Yesterday morning it was:

    LTP is up $75,387 this morning – that's nice!

    Security Value:  $483,519
    Cash on Hand:  $1,813,903
    Total Value:  $2,297,421
    Portfolio Ret.:  359.5%

    More than makes up for the STP dropping $31,620 since we reviewed it yesterday (and decided nothing needed changing):

    Security Value:  $102,755
    Cash on Hand:  $272,943
    Total Value:  $375,698
    Portfolio Ret.:  87.8%

    That's pretty much just how we want our balance to be on the way up, giving up about 1/3 of our gains for the "insurance" of the hedges. 

    And now we have: 

    LTP:

    Security Value:  $501,958
    Cash on Hand:  $1,813,903
    Total Value:  $2,315,860
    Portfolio Ret.:  363.2%

    STP:

    Security Value:  $148,175
    Cash on Hand:  $272,943
    Total Value:  $421,118
    Portfolio Ret.:  110.6%

    So we're actually gaining in the insanity so not much for us to adjust but not enough of a clear signal to get us off the sidelines to add new positions.  

    Speaking of the sidelines.  SOFI stupidly bought the name rights to a stadium ($30M/yr for 20 years) but who's laughing now as the Super Bowl is there and their name will be mentioned several hundred times during the Super Bowl.  SOFI got the bank charter that wanted and they are pre-profit but not pre-revenue, as they punched up to $1Bn last year and project $1.5Bn in 2022 (losing $250M).  

    They are back near their IPO price and that makes them interesting enough to add them to our Future is Now Portfolio by selling 30 of the SOFI 2024 $10 puts for $3.20 ($9,600) as that adds to our cash position and we only risk owning $21,000 worth of SOFI at a 30% discount to their IPO – even after the risk of not getting a bank charter is behind them.  

    It's tempting to be more aggressive as they could get a squeeze higher on Monday (name recognition) but there's about 1Bn shares so it's not like there's a shortage.  March $15 calls are 0.67 and they are a fun play and I'd take half off the table if they double and then see how high the free shares take you and, if you put a stop on them at 0.40, you risk losing 0.27 so say 40 contracts at $2,680 risks losing $1,080 but, if they pop, then you have no cost basis on 20 contracts and hitting $1 would make you $2,000 in profit.  That's a fun Super Bowl bet!

    Laguna Beach/Pirate – That is one expensive fire! 

    145-acre Emerald Fire erupts in Laguna Beach area; evacuations ordered |  KTLA

    On the 25th anniversary, residents remember 102618

    Oh dear, looks like we are closing at the lows – back to 14,700.  

       


  37. Two boxes are now red on /ES and the Dow's strong bounce line is in danger – not a productive day for the indexes.

    Funny how Bullard said the exact same thing I said this morning:

    The next Fed meeting is March 16th and there are only 8 meetings all year and we burned January last week so there basically HAS to be a rate hike at the next meeting as the Fed can't set the benchmark at 0.25% while investors are paying 2% for 10-year notes – it makes them look silly.

    Yet HE gets all the attention!  

    “I’d like to see 100 basis points in the bag by July 1,” Bullard, a voter on monetary policy this year, said in an interview with Bloomberg News on Thursday. “I was already more hawkish but I have pulled up dramatically what I think the committee should do.”

    Bullard spoke after the January consumer price index report showed a 7.5% annual increase, the biggest since 1982. Gains were broad-based, extending beyond food and energy to categories including household furnishings and health insurance. 

    The report “shows continued inflationary pressure in the U.S.” and “is concerning for me and for the Fed,” Bullard said. “You have got the highest inflation in 40 years and I think we are going to have to be far more nimble and far more reactive to data.”

    “I would very much like the committee to consider that as a possibility, so we can do that if we need to — because inflation is not decelerating as we had hoped.”

    frown


  38. Ouch!

       

  39. Yes I wonder if he reads your post or someone in his house does.


  40. Think about those picture – that's what a tiny bit of global warming is doing – land on the ocean side, near the beach is bursting into flames.  Imagine what will happen when we're a few degrees warmer!  

    There's not much difference between a tree and kindling wood – consider a hotter, dryer planet where every tree you see is a potential threat.  How can we be ignoring this stuff?!?

    Aliso Fire breaks out today in Laguna Beach, Aliso Viejo, California:  Evacuations in Southern California - CBS News

    The faucet has been shut off across much of the West over the past month after a promising wet and snowy start to the season. Well above-normal snow water equivalent (SWE) at the start of 2022 provided the buffer needed to mitigate the extreme dry spell over the past month and avoid a rapid plunge into a snow drought across most of the region. A persistent ridge of high pressure has been parked off the West Coast since early January, leading to record-low precipitation totals at SNOTEL sites over the past 30 days in every western state except for New Mexico. Zero precipitation was observed over the past 30 days at many SNOTEL sites in northwest California, the Sierra Nevada, and the Great Basin. Remarkably, some of the sites at which zero snow fell in the past month still have slightly above-normal SWE thanks to major storms during the last two weeks of December and beginning of January. Still, the West as a whole is trending toward snow drought conditions, with below-normal SWE at 62% of the SNOTEL sites on February 8 compared to 21% on January 10 

    As we progress through the snow season, attention turns to spring runoff and summer water supply. Peak SWE is one of the metrics used to assess potential water supply outcomes. The timing of median peak SWE varies across the West, but generally occurs from late March through early April, with higher-elevation sites in the Rockies peaking the latest. With over a month left in the heart of the snow season, many areas have already exceeded 70% of median peak SWE thanks to the wet period in early winter. In the Cascade Range of northern Oregon, several SNOTEL sites, mostly at lower elevations, have already exceeded the median peak SWE, which is encouraging. Areas in which values of less than 50% of median peak SWE are widespread include northwest California, northeast Nevada, Utah, northwest Wyoming, and southwest Montana. Forecasts indicate that below-normal precipitation and snowfall is likely to continue during the next 1–2 weeks over most of the West. The continued dry spell, above-normal temperatures, and increasing late winter sun angles all will be working against snowpack accumulation, and the spatial extent of snow drought is likely to continue to increase.  

     


  41. Phil / GILD – getting close to the 60….. looking to sell some '24 putters on this one at about 10.xx ….   With a 4.6% yield I'm tempted to buy some 1K shares at 58 to 60 and sell some Jan '23 65 callers for 5 ish….  what do you think?  then do it again the following year…  Chart looks ugly still on this one though