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Testy Tuesday – Oil Blasts Back Over $100 but there’s a Silver Lining

Oil is at $101 this morning.

So we'll all be paying for Putin's war at the pumps.   Fortunately, as we discussed in yesterday morning's PSW Report (which you can subscribe to HERE), we hedged that by being long on Silver (/SI) and Natural Gas (/NG) and our 2 Silver contracts are up $6,750 and our Natural Gas contracts are still at $4.50 – so still good for a new trade as the Ukraine offensive continues.

 $2,450 is our stop on /SI Futures, as we want to lock in a $5,000 gain but we'll let it run otherwise.  Another hedge we really like is Barrick Gold (GOLD), the world's largest miner, who have 69M ounces of gold reserves at an average extraction cost of $1,200 per ounce and, as a bonus, they also have 12Bn pounds of copper, which is currently trading at $4.50/pound though Barrick only has them booked at $2.75 so there's a bonus $2.1Bn in the copper reserves and, at $1,900, the gold exraction profits would be $48.3Bn.  

As it stands, at $22.50, you can buy the whole company for $40.2Bn and they drop a solid $2Bn a year to the bottom line.  What's really fun about GOLD, however, is that if Gold (/GC) just goes up 20%, to $2,100 – GOLD makes $200 more per ounce on roughly 5M ounces mined so that would be a 50% bump in earnings – performing better than the metal itself.  If Gold drops 20%, to $1,700 – GOLD still makes $500/ounce while holders of the metal simply lose their bet.  

Even better, we can play GOLD with options to give ourselves an even greater advantage.  GOLD was our 2019 Trade of the Year from when it was only $13 around Thankgiving of 2018 but, as a new trade, you can:

  • Sell 10 GOLD 2024 $20 puts for $2.90 ($2,900)
  • Buy 25 GOLD 2024 $20 calls for $5.40 ($13,500) 
  • Sell 25 GOLD 2024 $27 calls for $3 ($7,500) 

That's net $3,100 on the $17,500 spread so you have $14,400 (464%) of upside potential at $27and you are obligated to buy 1,000 shares of GOLD for $20,000 if it heads lower and, if your spread is wiped out, your net entry would be $23.10 – a bit more than gold is trading at today.  So it's an aggressive play but we thing GOLD is a great value here and we certainly don't mind owning 1,000 shares at $23.10 because, if it falls to $13 (where we bought it 3 years ago), we would just buy 1,000 more and be in 2,000 shares at $18.05 average.  

So the real question is – do we REALLY want to own 2,000 shares of GOLD for $18.05 and, if that is a definite yes, then there's no reason not to make the above spread.  In fact, I'd almost rather own the 2,000 shares for a $6.50 discount ($13,000) than just make $14,400 and never get a chance to own the stock…

So there's always something to trade – even in wartime.  Lockheed Martin (LMT) is our Stock of the Century and the century is still young but LMT has already climbed from $20 in 1999 to $433.80 at yesterday's close and we didn't buy it because of Afghanistand or Iraq or Crimea or Ukraine but because of fusion – which we think LMT will crack ahead of their competitors.  Still, the wars are a nice bonus and they are doing great recently.  

In our Long-Term Portfolio (LTP), our current LMT trade is already deep in the money, 2 years ahead of schedule:

LMT Long Call 2024 19-JAN 300.00 CALL [LMT @ $433.80 $0.00] 10 9/14/2021 (689) $64,800 $64.80 $76.95 $64.80     $141.75 $0.00 $76,950 118.8% $141,750
LMT Short Call 2024 19-JAN 370.00 CALL [LMT @ $433.80 $0.00] -10 9/15/2021 (689) $-32,000 $32.00 $61.40     $93.40 $0.00 $-61,400 -191.9% $-93,400
LMT Short Put 2024 19-JAN 300.00 PUT [LMT @ $433.80 $0.00] -5 9/14/2021 (689) $-18,360 $36.72 $-22.02     $14.70 $0.00 $11,010 60.0% $-7,350

As you can see, we took advanatage of the sell-off in September and bought 10 of the 2024 $300/370 bull call spreads for net $32,800 and we sold 5 of the 2024 $300 puts for $18,360 to help pay for it – much like the GOLD play above.  So the whole spread was net $14,440 and we were promising to buy 500 shares of LMT for $300 which, like GOLD – sounds really good to me!  Already we're at net $41,000 out of a potential $70,000 on the spread with $39,000 (95%) left to gain if LMT simply holds $370 into Jan, 2024 – aren't options fun?  

Of course, at PhilStockWorld, those are just our leftovers as we're in the middle of gaining $55,560, which is 384% of our original $14,440 outlay.  Like I said – FUN! 

There are always opportunities to trade in the markets – you just can't go rushing into things.  The trade that seems hot when things begin to change don't always stay that way as something like a war begins to drag on but certain trends take hold and we can ride those to amazing profits.  

Russian military convoy reportedly heads toward Kyiv: Maxar setellite  imageryAs always, we keep our eye on the news and the news is currently that there's a 40-mile long convoy heading for Kyiv – and not the kind with rubber duckies and such…  Sue, you might think "Why doesn't the Ukraine just blow up the slow-moving convoy"?  That would be the subject of Donald Trump's first impeachment, when he held the delivery of military weapons hostage if Ukraine wouldn't dig up dirt on Biden's son – ah, good times.  Trump stopped the delivery of hundreds of millions of Dollars in aid and, since he didn't get his way, blocked all promised aid to Ukraine going forward as well.  

Trump pushed his Vice President, a key conduit between his administration and Ukraine, to skip Zelenskyy’s inauguration in April 2019, a decision that came as the newly elected Ukrainian president was seeking U.S. recognition to show solidarity against Russia. Pence later met with Zelenskyy in Warsaw, where they discussed Trump’s decision to freeze military assistance.  Fortunately, Biden hosted Zelenskyy last fall and delivered the Javeline missiles that have been so effective against Russian tanks – part of a $650M aid package Biden began shipping in December.  


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  1. Good Morning.

  2. That was weird…. :)

  3. Is WU (western union) a good idea now? Dividend yield is >5%. I know we were once in it when it was in the 20s. 

  4. Good morning!

    /SI just shy of $25 now….

    $25 is a hard stop now for 1/2 off, then 0.20 trailing above $20.20. 

    We're almost back to the higher zone if we can hold it today:

    • Dow 36,000 to 28,800 would be a 7,200-point drop with 1,440 bounces to 30,240 (weak) and 31,680 (strong).   
    • S&P 4,800 is 20% above 4,000 and that makes it an 800-point drop with 160-point bounces so 4,160 (weak) and 4,320 (strong) is where we are this morning (again).
    • Nasdaq is using 13,500 as the base and we bottomed yesterday at 13,580.  14,100 is the weak bounce and 14,700 is strong.  
    • Russell 1,600, would be about an 800-point drop with 160-point bounces to 1,780 (weak) and 1,960 (strong).

    To be fair, /ES is at 4,360 so should be green but the point is that needs to hold today for us to start hitting the bigger bounce chart – which is our levels off the HIGHS, as opposed to our levels off the 20% correction.

    • 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 last time we used this chart was Feb 16th – you can see why we haven't been back to it and still it's not ready for us – that's why were still using the 20% correction chart – we've had no clear indication not to.

    Since we're using the correction chart – we must still be in correction territory and, since we haven't hit the bottoms yet (except /NQ), I don't see where we will have enough evidence to bust higher so down is still more likely than up.


    And Mr Vix agrees with me:

    As do the lawyers at Gold & Silver:


    And Uncle Buck:

    15 Things You Probably Didn't Know About Uncle Buck | Mental Floss

    WU/Rn – I have not liked them for ages.  Too many competing money transfer systems, not enough telegrams.  They are cheap enough, with 10x valuation but it's a declining X.

    WU/Jeddah – This is their current issue:

    Western Union, MoneyGram estimated to lose $400M/year from El Salvador Bitcoin move

    Sounds worse than it is but absolute nightmare for them if it starts spreading.

  5. YETI  authorizes $100M buyback , stock up a little

    HBI      CEO buys $500K stock 

  6. And down we go again.  Like I said, easier to go down than up and THAT is why we use our bounce charts – to stop ourselves from buying into false rallies.

    Nas back below 14,100 and RUT testing 2,000 and /ES 4,302 has now failed that Strong Bounce line – so now we need 2 full days over it before we count it again.  

    Still, not particularly worse unless /RTY fails 1,960 – which hasn't happened yet and the Dow is still 2,000 points from confirming a bearish turn – though it could do that in 3 days pretty easily (it did last week and in Jan):

    If you think we're reacting badly – try moving closer to where the war is:


    Holy crap!  5.5% in a day?!?  WTF???  

    I guess that's the RSX opening back up and maybe some of that is in the Euro Stoxx?  I don't know but Germany also a disaster at -4.3% – we aren't even close to reflecting that kind of damage (yet). 

    And, speaking of yet – go YETI!

  7. /SI $25.27 so $25.19 is my stop now (just one left).

    /NG blasting back to $4.60.

  8. Heat Wave a Glimpse of Climate Change’s Impact in N. America

  9. Jeep Plans Line of Fully Electric SUVs

  10. also go PARA!

  11. Barclays analyst Anthony Powell downgraded Sunstone Hotel Investors (NYSE:SHO) to Underweight from Overweight as the analyst's thesis that the hotel REIT would achieve better external growth than its peers isn't playing out.

    Sunstone (SHO) is sliding 5.1% in midday trading on Tuesday, as hotel REIT stocks exhibit weakness overall. Services Properties Trust (NASDAQ:SVC) falls 5.6%, Host Hotels (NASDAQ:HST) -4.6%, Chatham Lodging (NYSE:CLDT) -2.7%.

    Powell had upgraded the stock in March 2020 as the company reduced leverage going into the pandemic downturn, "and we expected SHO would be in a better position to return to hotel acquisitions than peers once the recovery began," he wrote.

    Due to a number of factors, including the flexibility given to all hotel REITs by banks, a number of other hotel REITs have been as active or more active than Sunstone (SHO) in acquisitions, Powell said.

    "SHO has actually been a net seller in terms of number of hotels, and there remains uncertainty around how the portfolio will look six to 12 months from now, making it difficult to assess how it will perform on a relative basis," he said. Also there's uncertainty over the CEO vacancy and overall strategy, he added.

    Last week, Sunstone (SHO) suspended its quarterly dividends as Q4 results trailed consensus estimates.

    AA +5.87%Mar. 01, 2022 11:58 AM ET

    Alcoa (AA +6.1%) shares surge as much as 14% to an all-time high $85.73 before paring gains, as aluminum prices extend their recent rise as financial sanctions on Russia for invading Ukraine prompt concerns about supplies.

    London Metal Exchange benchmark aluminum (LMAHDS03:COM) recently was +2.8% at $3,463/metric ton after touching a record high of $3,525/ton on Monday; Russia produces ~6% of the world's aluminum.

    Russian aluminum producer Rusal (OTC:UNRIF) halted production at its Nikolaev alumina refinery in Ukraine, citing logistical challenges on the Black Sea and surrounding areas.

    "The key risk to the aluminum market is that the loss of this alumina supply results in an eventual suspension of primary smelting capacity in Russia, with ~900K tons/year production at risk," Goldman Sachs analysts say.

    Alcoa CFO William Oplinger told a Deutsche Bank conference on Monday that he expects higher aluminum prices and tighter alumina supply as a result of sanctions placed on Russia, according to S&P Global Platts.

    Russian aluminum producers may not be able to fill the incremental market needs in Europe and the U.S., which will keep "upward pressure" on recent high premiums in both regions, Oplinger reportedly said.

    In the U.S., Oplinger said Alcoa still has two curtailed lines at its 269K tons/year Warrick smelter in Indiana, while its 279K tons/year Intalco smelter in Washington, remains fully curtailed.

    Goldman Sachs recently raised its forecast price for aluminum to $4K/ton.

    TNL -4.79%Mar. 01, 2022 11:54 AM ET

    Travel stocks suffered another day of losses on Tuesday morning as investors weighed the implications of the intensifying conflict in Ukraine amid the attacks by Russia.

    Higher energy prices and concerns on summer travel demand in Europe were cited as major factors in the selling pressure.

    Notable decliners in the airline sector included Ryanair Holdings (RYAAY -7.5%), SkyWest Holdings (SKYW -6.9%), Alaska Air Group (ALK -6.7%), United Airlines (UAL -7.1%), JetBlue (JBLU -6.3%), American Airlines Group (AAL -6.4%), Southwest Airlines (LUV -5.4%), Copa Holdings (CPA -5.9%), Hawaiian Holdings (HA -5.4%) and Delta Air Lines (DAL -5.6%).

    In European trading, Deutsche Lufthansa AG (OTCQX:DLAKF) fell 6.44% and easyJet (OTCPK:EJTTF) is off 8.77%.

    Cruise line stocks also added to their weekly decline, with Carnival Corporation (CCL -7.8%), Royal Caribbean (RCL -8.7%) and Norwegian Cruise Line Holdings (NCLH -6.0%) all in reverse again.

    Travel service stocks TripAdvisor (TRIP -7.2%), Expedia (EXPE -4.1%), Booking Holdings (BKNG -2.8%) and Travel + Leisure (TNL -4.5%) are all lower as well.

    Broad market update: Nasdaq, S&P 500 and Dow Jones turn lower as Russia pushes further into Ukraine.

    CVX +2.52%Mar. 01, 2022 11:25 AM ET14 Comments

    Chevron (CVX +3.4%) tops the Dow Jones index and hits a new 52-week high after raising its stock buyback program to $5B-10B per year, up from previous plans for $3B-5B of annual repurchases.

    At its annual investing meeting, the company also targets a 12% return on capital employed by 2026 at $60/bbl Brent crude, and forecasts operating cash flow per share to grow 10% annually through 2026, benefiting from reduced costs and surging energy prices.

    Additionally, Chevron reaffirms targets to lower the carbon intensity of its operations and grow new energy business lines in renewable fuels, hydrogen, carbon capture and offsets.

    Separately, Chevron CEO Mike Wirth says he has received no indications that the Caspian pipeline connecting the Tengiz field in Kazakhstan to global markets will be interrupted after Russia invaded Ukraine.

    The pipeline, which crosses part of Russia and supplies more than 1M bbl/day, is Chevron's only direct exposure to the Ukraine conflict.

    Free cash flow growth, restrained capital spending and a strong balance sheet are powerful positives for Chevron shares, Chuck Walston writes in a bullish analysis posted recently on Seeking Alpha.

    IGT -14.96%Mar. 01, 2022 11:12 AM ET1 Comment

    • International Game Technology (NYSE:IGT) reported Q4 revenue growth of 19% to $1B led by 45% growth in Global Gaming revenue, 9% and 27% increase in global lottery revenue and digital & betting revenue respectively.
    • Operating income almost doubled to $186M from $96M in year ago quarter; net income stood at $55M compared to a net loss of $220M led by higher profit and lower non-cash foreign exchange losses.
    • Adj. EBITDA was higher by 31% to $387M.
    • Cash from operations of $396M, up 58% from $251M in the prior-year period; free cash flow of $326M, up from $201M.
    • As of Dec.31, 2021, total liquidity stood at $2.3B, unrestricted cash of $591M and $1.7B in additional borrowing capacity.
    • Led by a improved leverage of 3.5x a year ahead of schedule through net debt reduction by $1.4B, the company reinstated quarterly cash dividend of $0.20/share during the quarter; reported $40M+ in share repurchases.
    • The company reaffirmed its outlook for FY22 wherein the 2021 revenue mix is seen consisting of global lottery (69%), global gaming (27%) and digital and betting (4%).

  12. War in Ukraine Threatens World Food Supplies

  13. OPINION: Inside the Tesla bubble

  14. PARA/Stock – What a funny time for them to wake up.

    Spam, Spam, Spam, Spam..!” – 'Spamalot' comes to Covington, TN in March –  Have Geek Will TravelHormel jumps 5% on record Q1 sales

    HRL +3.93%Mar. 01, 2022 11:10 AM ET

    • Hormel (HRL +5.1%) Q1 shows record net sales of $3B, up 24%; organic net sales up 13%.
    • Operating income of $320M, up 19%
    • Operating margin of 10.5%, compared to 10.9% last year
    • Pretax earnings of $309M, up 11%
    • GAAP EPS of $0.44, up 7% compared to last year, in-line with consensus.
    • Cash flow from operations of $384M, up 87%.
    • Volume of 1.2 billion lbs., up 2%; organic volume down 4%
    • FY2022 sales to be in the range of $11.7B-$12.5B vs. consensus of $12.23B and diluted EPS of $1.87-$2.03 vs. consensus of $1.95.
    • "We remain on track to deliver our sales and earnings guidance for the year as our team achieved its fifth consecutive quarter of record net sales and grew operating income by double digits during the first quarter. Our ability to deliver these results demonstrates the strength of our balanced business model and our exceptional execution in navigating difficult operating conditions. This is a testament to our experienced management team, clear strategic priorities and dedicated team members around the world." said Jim Snee, chairman of the board, president and CEO.
    • Contributor gives buy rating to the stock and writes: 'I expect 5-10% stock appreciation in addition to a stable, increasing dividend.'
    • Previously (March 1): Hormel Foods GAAP EPS of $0.44 in-line, revenue of $3.04B beats by $120M

    SLB -5.24%Mar. 01, 2022 10:59 AM ET10 Comments

    Schlumberger (SLB -2.7%), Halliburton (HAL -3.4%) and Baker Hughes (BKR -3.2%) all turn sharply lower following reports from J.P. Morgan Chase and Citigroup that say earnings for the oilfield service providers likely will be impaired from working in Russia; ETF: OIH

    As reported by Bloomberg, J.P. Morgan estimates Russia makes up as much as 8% of total sales for Schlumberger, and Citi says the company's margins in the country are in the high teens in Russia; JPM says Baker Hughes has the second highest exposure to Russia, while Halliburton gets as much as 2% of revenue from the country.

    The companies have not disclosed any change in plans for their Russian operations, but "even if the Big 3 will be able to legally continue work in Russia, it is possible that pressure could mount from shareholders to exit the country," according to JPM analyst Arun Jayaram.

    However, "with sanctions so far largely sparing Russia's energy sector, we believe that most operations of the Big 3 in Russia will continue for the time being," Jayaram writes.

    WBA -2.89%Mar. 01, 2022 10:56 AM ET2 Comments

    • Walgreens (NASDAQ:WBA) fell 2.6% amid a report that a consortium of private equity firms Bain and CVC Capital dropped out of bidding for the Boots U.K. drugstore chain.
    • The consortium abandoned an offer likely due to price expectations from Walgreens (WBA), according to a Sky News report earlier. Indicative offers valued at more than £6bn ($8B) are understood to have been submitted last week. Asda, which is owned by TDR Capital, Apollo Global Management (NYSE:APO) and Sycamore Capital are said to remain interested in bidding for the Boots chain.
    • Sky News previously reported several days ago that bidders for Boots were having issues with "huge" pension liabilities guaranteed by Walgreens (WBA).
    • Bloomberg reported in late January that Walgreens was said to have started the sales process for its Boots chain in the U.K. after confirming it was considering selling the unit in January.
    • PE firms Carlyle, KKR, Advent and Clayton, Dubilier & Rice may also be considering a bid for the U.K. chain, the Times of London has previously reported.

    VTRS -10.13%Mar. 01, 2022 10:36 AM ET16 Comments

    Viatris (VTRS -7.4%) continues to trade lower in morning hours on Tuesday as several Wall Street firms issued downgrades on the generics drugmaker following its Q4 2021 results yesterday.

    While the quarterly financials did not meet the consensus, the highlight of the day was the announcement of a multi-billion-dollar deal with India-based Biocon Biologics to sell the company’s biosimilar assets.

    Despite up to $1B stock buyback program newly authorized by its board, Viatris (NASDAQ:VTRS) went on to lose more than a fifth as investors reacted to the divestment.

    However, the analysts at Bank of America and Raymond James have mainly focused on the company’s outlook in their downgrades.

    Despite the planned divestment, there appears to be no clarity on the company’s growth outlook and strategy for capital allocation, BofA analysts led by Jason M. Gerberry wrote as they downgraded the stock to Neutral from Buy. The price target slashed to $13 from $21 per share implies a premium of ~18% to the last close.

    Citing Viatris’ lack of track record in M&A, the analysts question if the management can redeploy the proceeds of divestitures to areas of priority.

    The team calls, Viatris (VTRS) “a company embroiled in a multi-year transition phase,” whose upside depends on valuations achieved from divestitures, and the bull case needs investors to take a long-term view on management’s ability to effectively redeploy the proceeds.

    Meanwhile, in its downgrade to Market Perform from Outperform, Raymond James analysts led by Elliot Wilbur argue that the company’s EBITDA forecast for 2022 was below expectations.

    The improved capital allocation strategy, including the buyback, could generate “some short-term recovery” after the selloff, the analysts noted, adding: “Our view remains that the story will never “work” absent positive EBITDA growth.”

    TM -0.57%Mar. 01, 2022 10:29 AM ET3 Comments

    • Toyota Motor (TM +0.2%reports February U.S. sales declined 11.2% Y/Y to 157,827 vehicles vs. -5.1% in January 2022.
    • Toyota division sales slipped 11.9% Y/Y to 142,356 vehicles and Lexus division sales dropped 5.6% Y/Y to 20,231 vehicles.
    • EPV sales dipped 1.7% Y/Y to to 41,002 units, accounted for 25.2% of total TMNA sales vs. 22.8% year ago.
    • SUV sales +3.7%, Sienna -22.4% and Pickup sales -13.2% for the month.
    • Truck sales -2.4% and car sales -29.9% for the month.
    • The company will resume operations at all 14 plants in its home country on Wednesday after halting production due to impacts from a cyberattack against parts supplier Kojima Press Industry Co.

    TGT +10.50%Mar. 01, 2022 10:23 AM ET3 Comments

    Target CEO Brian Cornell said Tuesday that the retailer's recent Street-beating earnings figure points to further growth for the company, as it looks to leverage efficiency earned through its store-as-hub model.

    "We are a growth company and we'll continue to grow in 2022 and beyond," the chairman and CEO of Target (NYSE:TGT) told CNBC.

    Target (TGT) soared 12% in Tuesday's early trading following the release of its quarterly results. The company topped projections for its Q4 profit, with comparable sales rising 8.9% during the crucial holiday quarter.

    The advance in comparable sales followed a nearly 21% jump experienced a year ago. TGT also revealed that digital sales climbed 9.2% during the most recent quarter.

    Cornell reported that the growth fueled by the pandemic has given it added scale, which it can use to drive better efficiency. At the same time, the company has seen growth at the store level, as digital sales growth has trickled down to individual locations, thanks to its store-as-hub model.

    "Over the last couple of years, the average Target store has added $15 million in sales," he noted.

    Cornell added that the firm plans to invest in further growth, raising its capital expenditure budget as a way to fuel further sales increases. He reported that this spending would be targeted at store openings, store remodeling and capacity expansion.

    "We're just going to be a company that's investing in the future, investing in growth, but we'll reward shareholders along the way," he said.

    Bolstered by the earnings news, TGT advanced $23.52 at about 9:45 a.m. ET, climbing to $222.29. The advance recovered a portion of the losses posted last month, as the stock came further off an 11-month low reached last week.

    The stock is now on track for its highest close since mid-January.

    For more on TGT's long-term prospects, check out a deep dive from SA contributor Daniel Schönberger, who assessed before the earnings release that the stock had become undervalued.

  15. WEAT +4.86%Mar. 01, 2022 9:55 AM ET

    Wheat futures jumped by the exchange maximum for a second straight day in Chicago, hitting their highest level since April 2008, as traders brace for a long disruption to global supplies following Russia's invasion of fellow grain exporter Ukraine.

    Benchmark CBOT soft red winter wheat futures (W_1:COM) rose by the $0.50 limit to $9.84 per bushel, capping a 27% surge since the start of the year, hard red wheat breached the $10 per bushel mark, and milling wheat in Paris neared an all-time high, according to Bloomberg.

    Russia and Ukraine combined account for ~30% of world wheat exports (NYSEARCA:WEAT), and the invasion has led to the closure of Ukraine's ports, vessels have been struck by shelling, new grain deals from Russia are on pause, and some banks are limiting commodity trade finance linked to the two countries.

    The war likely will drastically impact planting for spring crops like corn, prolonging the impact on supplies; UkrAgroConsult in Kyiv tells Bloomberg that the war has "paralyzed" Ukraine's agricultural chain from cultivation to shipping.

    Egypt canceled a second international wheat tender in less than a week, a sign of the growing impact on importers.

    Commerzbank analysts said recently that "as much as 15M tons of wheat exports from the Black Sea region could be at risk" from the Russia-Ukraine war.

    Mar. 01, 2022 9:05 AM ET7 Comments

    • Dmitry Medvedev, Russia's top security official, responded on Tuesday to French Finance Minister Bruno Le Maire's promise for an economic and financial war that would collapse the Russian economy.
    • "Watch your tongue, gentlemen!," said Medvedev via Twitter. "And don't forget that in human history, economic wars quite often turned into real ones."
    • On Monday, the U.S. prohibited anyone in the U.S. from conducting transactions with Russia's central bank. That came after a number of other sanctions including booting certain Russian banks from the SWIFT global payment system.

    FB -2.41%Mar. 01, 2022 8:27 AM ET13 Comments

    Meta Platforms (NASDAQ:FB) has an advertising problem that is "getting worse, not better" as Benchmark initiated coverage on the Mark Zuckerberg-led company.

    Analyst Mark Zgutowicz started coverage with a hold rating and no price target, noting that while Apple's (NASDAQ:AAPL) iOS changes have put an obvious hamper on Meta's advertising targeting capabilities, it looks like engagement on Facebook and Instagram "may finally have cracked" and the company's newest product, Reels, will not be able to carry both platforms.

    "While we have heard consistent groans from small businesses on deteriorating Facebook return on ad spend since iOS 14.5 became enforced last May, the strongest complaints are coming in now (February), with some seeing campaigns in the red for the first time ever," Zgutowicz wrote in a note to clients.

    The analyst added that it's not yet clear for the root cause other than potential reduced targeting inputs hurting the algorithm. However, Zgutowicz pointed out the return on ad spend mechanics are working against advertisers and publishers, with cost per thousand ad impressions "astronomically high," click-thru rates have improved and cost per clicks are elevated, all hurting return on ad spend.

    Meta shares fell nearly 1% to $209.10 in premarket trading on Tuesday.

    Meta's biggest competitor is ByteDance's (BDNCE) TikTok, which now has more than 1 billion monthly active users, including nearly 200 million in the U.S., compared to 240 million for Meta.

    The analyst noted that Tik Tok leads in engagement over Reels because it prioritizes the content and it's a simple platform for creators, while Reels has fallen behind due to "more restrictive algorithms that tap big names and curated content."

    In addition, metaverse spending is "fast and furious" Zgutowicz explained, while pointing out there is no line of sight on long-term returns, with estimates of accumulated losses of "at least $60 billion" since 2019.

    Meta, along with YouTube (GOOG, GOOGL) recently blocked access to Russian news outlets like RT amid Russia's invasion of Ukraine.

  16. seeing 9000 WPM  Jan23 $40 puts selling  around $3.50    net $36.50  which looks decent on a chart 

  17. actually buying WPM  at $45.50 and selling the Jan23 $45 calls for $6.40 and the $40 puts for $3.50  looks decent  I havnt looked at 2022 yet 

  18.    "havnt looked at 2024 yet"   

  19. Good Morning.

    I'm going to be interested to see if Ukrainian resistance disables all the fuel station pumps.  That 40 mile convoy getting 10mpg is fuel hungry so kill the fueling stations.

  20. That's it for /SI after failing at $25.40.  The clue is the indexes stopped falling so SOMETHING is changing so you get tighter on the stops.  


    /NG is more of a conviction play.

    Now we just wait for the next thing we can take advantage of.

    WPM/Stock – I agree with that.

    Convoy/Jeddah – It's not like the are stopping at the gas station!  One out of 10 of those trucks are fuel trucks.

  21. One of those tanks can hold 320 gallons of gas – that's why they make such great explosions when you blow one up (if you catch them early in the trip).  That's still only enough to get them 300 miles at 1 gal/mile.  Unfortunately, Kyiv is only about 100 miles from the border so we assume Russia topped off their tanks there and they can easily make the round trip – even allowing for some driving over civilians and their cars once they are in town. 

    Watch a Russian T-90 Tank Catch Some Air and Fire Its Cannon at the Same  Time

  22. Interesting:

    XLF -4.21%Mar. 01, 2022 1:44 PM ET

    • While most financial stocks are weak in Tuesday trading, given the decline in bond yields due to uncertainty surrounding the Russia-Ukraine conflict, Charles Schwab (NYSE:SCHW) stock skids down 9.1% in midafternoon NY time.
    • The 10-year Treasury yield dropped almost 13 basis points to 1.70% in Tuesday trading.
    • Other online brokers also fall, but not as much, with Interactive Brokers (NASDAQ:IBKR) down 4.6% and Robinhood (NASDAQ:HOOD) slipping 3.4%.
    • Over the past year, though, Schwab (SCHW) has fared better than IBKR, HOOD, XLF (XLF -4.3%), and the S&P 500.
    • While the stock is 20% below its 52-week high of $96.24 reached on Feb. 9, it's still 7.9% higher than its 200-day simple moving average. And Schwab (SCHW) is only 0.1% below its 100D SMA.
    • Earlier today, the company filed for a potential offering of floating rate and other senior notes due 2027 and 2032. It didn't provide an expected size for the offering.
    • In January, Schwab (SCHW) stock weakened after Q4 earnings and revenue missed consensus estimates.

    RIDE +0.78%Mar. 01, 2022 1:01 PM ET19 Comments

    Auto stocks fell sharply on Tuesday on concerns over the impact of escalating Russia-Ukraine conflict on commodity prices, European demand and the risk tolerance of investors.

    Auto majors Stellantis (STLA -7.8%), Ford Motor Company (F -4.9%), General Motors Company (GM -4.4%) and Ferrari (RACE -3.1%) all were bid down notably.

    The electric vehicle sector is also reeling as investors take a more risk-off stance and factor in the disappointing production forecast from Lucid Group (LCID -14.8%). Notable decliners included Arrival (ARVL -6.9%), Rivian Automotive (RIVN -8.6%), Nikola (NKLA -5.8%), Faraday Future Intelligent Electric (FFIE -6.3%), Sono Group (SEV -4.6%) and Canoo (GOEV -4.9%).

    Just a few EV-related stocks bucked the trend. Workhorse Group (WKHS +8.5%) jumped after earnings, while Arcimoto (FUV +23.3%) and Lordstown Motors (RIDE +1.4%) also poked out gains. Tesla (NASDAQ:TSLA) showed a small bump of 0.35%.

    Broad market update: Nasdaq, S&P 500 and Dow Jones turn lower as Russia pushes further into Ukraine.

    ENDP -19.45%Mar. 01, 2022 12:57 PM ET8 Comments

    Endo International (NASDAQ:ENDP) was stripped of its legal defenses in an upcoming trial in Tennessee over the company’s role in the opioid crisis, Bloomberg reported on Tuesday.

    The decision taken by Judge Jonathan Lee Young of Tennessee Circuit Court was due to Endo’s (ENDP) failure to submit files to more than a dozen local government entities suing the company over its marketing practices for opioid-based pain killers.

    The decision issued through a “default judgment" marked the third time Endo lost its defenses in the opioid trials, Bloomberg said.

    Last month, Endo (ENDP) disclosed that Tennessee state court could issue a default judgment against the company in the opioid trial.

    Endo (ENDP) shares are currently trading lower despite better-than-expected financials posted by the company for Q4 2021 on Monday after the close.

    However, the guidance for Q1 2022 fell short of Street forecasts. In reaction to the results, Raymond James analyst Elliot Wilbur, with a Market Perform rating on the stock, wrote: “Pandemic pressures continue to influence ENDP’s product lines, a drag on branded products but a tailwind for VASOSTRICT throughout most of the pandemic.”

    “Uncertainty surrounding VASOSTRICT competition entry remains, and as such management opted to only provide 1Q22 guidance at this juncture.”

    In January, rival biotech Eagle Pharmaceuticals (NASDAQ:EGRX) launched vasopressin, a generic version of Endo’s VASOSTRICT.

    You know what's strange about this stuff?  You could have invested in ENDP and made a fortune while they sold these opioids and then sold the stock, taken the profits and skipped the lawsuit.  Interesting loophole.

    SBRCY +4.80%Mar. 01, 2022 12:42 PM ET2 Comments

    Moody's Investors Service is placing ratings and assessments of 16 Russian financial institutions on review for possible downgrade after placing Russia's Baa3 sovereign rating on review for possible downgrade.

    The U.S., the European Union, and others have said they'll restrict many of Russia's largest banks from the SWIFT payment messaging system due to Russia's invasion of Ukraine, a move that will complicate funds transfer and cross-border payments for the Russian banks, Moody's said. In addition, sanctions against the Russian central bank will make it more difficult for it to use foreign reserves to support the ruble.

    Banks with ratings being put on review include Sberbank (OTCPK:SBRCY +4.8%), Gazprombank, Russian Agricultural Bank, Alfa-Bank, Commercial Bank AKBARS, Credit Bank of Moscow, and Russian Region Development Bank, among others.

    The move by Moody's comes a day after S&P Global Ratings downgraded four Russian banks — Raiffeisenbank AO, UniCredit Bank AO, Gazprombank JSC, and Alfa-Bank JSC and its holding company ABH Financial. It also placed ratings on Russian financial institutions, their debt issues, subsidiaries and related entities on CreditWatch with negative implications.

    On Feb. 25, S&P cut Russia's foreign currency credit ratings to junk at BB+ and put all of its sovereign ratings on CreditWatch negative.

    Previously (Feb. 25) Russia may be cut to junk by Moody's

    FB -2.41%Mar. 01, 2022 12:19 PM ET96 Comments

    Friction continues to grow between Russia and leading U.S. tech names, with Russia's Foreign Ministry calling for a way to hold companies like Facebook parent Meta Platforms (FB -2.3%) and Google (GOOG -0.6%GOOGL -0.6%responsible for "inciting war."

    Amid the ongoing Russia-Ukraine battles, Interfax reported that Russia's ministry urged a system for accountability for social media names as skirmishes between Russia and the companies continue to mount. The prime ministers of Poland and the Baltics (Lithuania, Latvia and Estonia) have called on Facebook, Google, YouTube and Twitter (TWTR -1.5%) to block Russian propaganda channels, Ukrainian minister Oleksandr Tkachenko says.

    Russia's communications regulator, Roskomnadzor, has accused Facebook of "censorship" and acted to slow Facebook's access to Russian users (after Facebook worked to limit access to accounts of Kremlin-backed media).

    Tuesday's news follows closely on the prospect that Internet companies including Meta and Google face possible punishment for failing to open local offices, among other measures that Russia legally required. Social media companies with more than 500,000 daily users are required to open local offices or face restrictions as harsh as outright bans.

    Of 13 companies that fit that threshold, only a few appear to have complied with the local-office requirement (Apple, Spotify and Rakuten's Viber). Six others complied in part but failed to open a local office, including Google, Meta, Twitter, TikTok (BDNCE), Zoom (ZM -4.9%) and Likee (YY -1.3%) – and four companies have made no move to comply at all (Discord, Twitch (AMZN -1.1%), Telegram and Pinterest (PINS -2.7%)).

  23. Phil,

    With the purported end of Covid wishfully in the wings, do you have any thoughts on value in the restaurant space (CAKE, etc) for future consideration?


  24. ING is getting hit for understandable reasons.  What about selling some puts?  Any thoughts?  Thanks.

  25. Image


    Not good!

    When we react, we are not directing ourselves toward a chosen end.  Rather, we are allowing events to control us and dictate our actions without planning and without conviction.  Little wonder that some of our worst trades come from decisions made out of fear, greed, FOMO, etc. – Brett Steenbarger


    Restaurants/8800 – You know I love CAKE and QSR and JACK – I think we have something in all of those.  Certainly we'll look for things to get back to normal but be mindful of rising labor costs and, of course, how easy it is to pass on increased food costs to their clients.

    ING/John – You have to see how exposed to Russia each bank is.  If a bank funded a few Billion to a project in Russia or with a Russian company – could be trouble.  Also, think of all the margin calls in Russia and then there are going to be people who had money in Russian markets that will be screwed – lots of unknowns.  

  26. Unknowns- now that's an understatement. The current situation could spin out of control quickly. Let's hope cooler heads prevail and not allow us to do anything "stupid". I cannot help but wonder/worry about the complete 180 turn by the Germans/EU. Is there something behind the curtain that scared the bejesus out of them? 

  27. pstas,  agreed.  seems like there is a lot more to the story 

  28. Russian oil firms move bank accounts to keep business running- sources

    Euro drops to lowest since June 2020 as Russia's invasion of Ukraine moves forward


    The share of adults reporting symptoms of anxiety or depressive order has nearly tripled during the pandemic, from 11.0% in 2019 to 31.6% in the Fall of 2021.


    Germans/Pstas – As the Germans well know, it's not very far from Ukraine to Germany, you just have to go through Czechoslovakia (now 2 countries) and you are on the doorstep.  By Putin's logic, this whole Germany thing is new and things should go back to the old days:

    Outbreak of the Franco-Prussian War | Historical Atlas of Europe (1  September 1870) | Omniatlas

    Germany has a very small military, just 1.4% of their GDP goes to it.  We spend 3.4% and only Russia (4.3%) and Israel (5.6%) are in our league in spending as a percentage.  Ours is also very undercounted as we consider veteran's affairs and medical and social for veterans to not be a part of our military budget.  

    Markets not getting prettier into the close…

  29. Martin Wolf: Vladimir Putin may be the most dangerous man who has ever lived. He is dedicated to restoring Russia’s lost empire, indifferent to the fate of his own people and master of a vast nuclear force. Yet resistance, however risky, is imperative

  30. The largest military conflict in Europe since World War II — combined with simmering tensions between the United States and China — has investors watching shifts in international power dynamics more closely than they have in a long time.





    European natural gas surges 23% as traders grapple with the risk Russia might cut supplies after being hit with sanctions


    "Many reporters seem to think that it's more of a tragedy when white people have to flee their countries," said Trevor Noah about #Ukraine.

    This is interesting – how much did AAPL and others simply benefit from Huawei ban?  



    Isn't that pretty much every trading day this year?

  31. Germans- well, yeah fear can be a great motivator but the Eastern European geography and the piddling military status has been the case for some time. So why now and why so sudden?  Especially if my understanding of the German political sentiment is correct that an overwhelming majority favors a pacifist stance. Strange indeed. 

  32. Ex-Goldman Banker Was Told Kushner Would Stop 1MDB Probe

  33. Russian oil trade in disarray over sanctions as prices blast through $100/bbl

  34. Analysis: Ukraine war won’t deter Fed and Co. from March rate hikes

  35. EU nations considering banning Russian ships from ports – officials

  36. It's amazing, the number of experts'' that were surprised when Russia invaded…. :(

    The Impossible Suddenly Became Possible (

  37. We have a German living with us. Germans have referred to Putin as the second coming of Hitler for a long time.

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