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Month of War Monday – Will it Matter

"We'll be fighting in the streets

With our children at our feet

And the morals that they worship will be gone

And the men who spurred us on

Sit in judgement of all wrong

They decide and the shotgun sings the song" – The Who

A month of fighting!  

So far, Russia has attacked 50 health-care targets in Ukraine – to prevent civilians from receiving care after they bomb their homes, churches and schools.  This isn't just a "war crime" – this is Terrorism but, because it's being carried out by a "Super-Power" – we're just letting it happen.  

WW3 fears over 'Russia's plot to justify Ukraine invasion' as expert warns escalating tensions may spark major conflictWhat is the point of NATO, what is the point of the UN if we don't step in and stop aggression like this?  If your kid was being beaten up every day by a bully and you the Principle told you "Don't worry, it will affect the bully's PERMANENT Record"  while your kid kept getting his daily beatings – would you consider that competent oversight?  Well, that's what we're doing with Sanctions – in now way, shape or form does it stop Russia from murdering Ukrainians and stealing their land – but we can pretend we've done our part.  

After all, as Joe Biden reminds us, we don't want to start World War III.  Well, here's a secret for him that we should have learned in WWII – It's already been started and, once again, it's the lack of response by the Allied Forces that is allowing it to grow.  "Tyranny shall not be tolerated" is not supposed to be just some phrase from a history textbook – what's happening now will BE history one day, you know.

“We are seeing an uneasy calm in markets right now — markets have bought Mr Powell’s messaging so far but they could easily have a second think about it this week, while Ukraine-Russia news remain volatile,” said Andrew Ticehurst, rates strategist at Nomura Holdings Inc. “Markets are completely subject to headline risk.” 

Anyway, the war did not magically go away over the weekend and Oil is back to $107 after hitting $108 overnight.  The Dow and the S&P are going to take a hit this morning, not because of the war no one seems to care about but because yet another Boeing 737 has crashed – this time in China just a few hours ago.  It was a 737-800, not the MAX but the crash profile was similar, with the plane suddenly going into a dive.  Regardless of the fault – BA stock will take a big hit this morning.

This is not a very exciting week, economically, as we're waiting for Q1 earnings reports to begin in a couple of weeks.  While we wait, it's pretty much just the Richmond Fed and Home Sales this week with Consumer Sentiment on Friday and a Fed Speaker per day except Thursday (and Bostic is hawkish) – so I imagine PMI will be running hot and they want to talk it down.  

And we still have plenty of Earnings Reports coming at us:

Image

The indexes had a technically constructive week last week – we'll see if they hold it.

 


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  1. March 21st, 2022 at 9:15 am | Permalink Ignore this user

  2. March 21st, 2022 at 9:17 am | Permalink Ignore this user

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  13. March 21st, 2022 at 9:50 am | Permalink Ignore this user

    Good Morning.


  14. March 21st, 2022 at 9:54 am | Permalink Ignore this user

    BDX – Phil – you asked last week during the portfolio review to remind you about BDX and their impending embecta spin off (tomorrow). Revised options should be listed very soon, so if we are exiting, we should do so in the next few days. Embecta begins trading on Apr 1, and the distribution is based on shareholders of record tomorrow.

    Also, regarding UL (also in the butterfly portfolio) – any reason we should not roll the long $50s down to $40?


  15. March 21st, 2022 at 10:15 am | Permalink Ignore this user

  16. March 21st, 2022 at 10:29 am | Permalink Ignore this user

    Good morning!

    Getting a sudden downturn.  BA testing $180 is down 11 so that's about 100 Dow points (half).

    Junior's Scooby Doo Ruh Roh Retro Circle Cowl Neck Sweatshirt – Fifth SunShanghai Disney shuts down amid new COVID-19 surge

    DIS -1.44%Mar. 21, 2022 9:57 AM ET2 Comments

    • Shanghai Disney Resort (DIS -1.6%) has temporarily shut down amid a surge in cases of COVID-19 in China.
    • "Due to the current pandemic situation, Shanghai Disney Resort, including Shanghai Disneyland, Disneytown and Wishing Star Park will be temporarily closed from Monday, March 21, 2022," the park says. "We will continue to monitor the pandemic situation and consult local authorities, and will notify guests as soon as we have a confirmed date to resume operations."
    • That comes as China fights the highest number of cases since the initial large outbreak in 2020.
    • Hong Kong Disneyland was previously pressed by the local government to extend its shutdown until April 20.
    • China has shut down travel in the northeast province of Jilin, its hardest hit by the current wave. Some 1,800 cases were reported in the region on Friday, of nearly 2,400 nationwide. And the country reported its first deaths from COVID-19 in more than a year.

    Apple supplier Foxconn back to 'normal' operations following COVID shutdown

    AAPL -0.52%Mar. 21, 2022 9:49 AM ET1 Comment

    Foxconn, one of the top manufacturers of products for Apple (NASDAQ:AAPL), said it is "basically" back up to full operations at its plants in Shenzhen, China following several days of disruptions caused by rising COVID-19 cases in the region.

    The company said in a statement that it has re-started "normal work order and production" at its massive campuses in the Shenzhen area, and is "abiding by epidemic prevention policies" in accordance with governmental COVID policies.

    Chinese officials locked down much of the area around Shenzhen, and several major tech production facilities either scaled back or shut down their operations over the last week following a spike in COVID cases around the area.

    Apple (AAPL) partners with Foxconn to build many of its products in China, but only a small percentage of its iPhones are reportedly built in Shenzhen. The company has most of its iPhones made at Foxconn facilities in China's Henan province, which is in the central region of the country.

    Last week, Apple (AAPL) got high marks from Wedbush Securities analyst Dan Ives, who said the company remains a top investment choice after the Federal Reserve raised interest rates, which gave a "bright green light" for investors to own "oversold" tech stocks.

    FDA to hold AdCom meeting on COVID-19 booster shots next month

    PFE +0.06%Mar. 21, 2022 9:40 AM ET7 Comments

    • On Monday, the U.S. Food and Drug Administration (FDA) announced an upcoming meeting of an expert panel to discuss the use of COVID-19 booster shots.
    • The virtual meeting of the Vaccines and Related Biological Products Advisory Committee (VRBPAC) is scheduled for April 06 to discuss the considerations for the use of COVID-19 vaccine booster doses, the FDA said.
    • In addition, the meeting will debate the process for COVID-19 vaccine strain selection in the development efforts against current and future variants.
    • Currently, the FDA has authorized booster COVID-19 vaccines developed by Pfizer (NYSE:PFE)/ BioNTech (NASDAQ:BNTX), Moderna (NASDAQ:MRNA) and Johnson & Johnson (JNJ).
    • Last week, Pfizer (PFE)/ BioNTech (BNTX) and Moderna (MRNA) announced they sought the U.S. regulatory nod for a second booster shot. While Pfizer (PFE) and BioNTech (BNTX) expect FDA to allow a second booster in those aged 65 years and older, Moderna (MRNA) seeks authorization in adults aged 18 years and above.


  17. March 21st, 2022 at 10:40 am | Permalink Ignore this user

    BDX/Rn – Yes, we may as well make it official.  In the Butterfly Portfolio, since BDX is doing a spin-off, their option will be messy so we're going to cash out and then get back in when the dust settles:

    		2024 19-JAN 250.00 CALL [BDX @ $267.19 $5.15] 10 1/13/2022 (669) $40,600 $40.60 $4.65 $37.65     $45.25 - $4,650 11.5% $45,250
    		2024 19-JAN 300.00 CALL [BDX @ $267.19 $5.15] -10 1/13/2022 (669) $-20,300 $20.30 $2.30     $22.60 - $-2,300 -11.3% $-22,600
    		2024 19-JAN 220.00 PUT [BDX @ $267.19 $5.15] -5 1/11/2022 (669) $-9,700 $19.40 $-5.40     $14.00 - $2,700 27.8% $-7,000

    BDX shareholders will get one share of Embecta for every 5 shares of stock.  Embecta is their Diabetes Care Business so it will detract from their earnings potential going forward and we will have to be sure we like what's left of the company enough to re-invest.  If you own the stock, I'd stand pat as Embecta should be a nice growth company going forward.  


  18. March 21st, 2022 at 10:44 am | Permalink Ignore this user

    Boeing shares nosedive after China plane crash but it wasn't a 737 MAX

    BA -5.26%Mar. 21, 2022 10:35 AM ET

    Boeing (NYSE:BA -5.3%) is the Dow Jones' biggest decliner after one of the company's passenger planes operated by China Eastern Airlines with 132 people aboard crashed in southern China.

    The 737-800 NG model that crashed in China is not a 737 MAX and has an excellent safety record in 25 years of operation, Paul Hayes, director of air safety and insurance at Cirium, told Bloomberg.

    China Eastern Flight MU5735 reportedly sank more than 25K feet in the span of just over two-and-a-half minutes, but NG models had just 0.07 fatal crashes per million flights as of 2019, according to aviation safety tracker Airsafe.com.

    China Eastern, which operates ~130 737-800 jets and began taking delivery of the aircraft in 2009, reportedly says it will halt 737-800 flights after the crash.

    But given Boeing's problems with the 737 MAX, the concern is that consumers may not want to fly on any 737 model until the cause of the China Eastern crash is determined not to be a design or manufacturing issue, so isolating the cause of the crash will be critical, Cowen analysts say.

    Because the plane went down in a wooded area as opposed to over the ocean, it should be easier to recover the cockpit voice recorder, which should provide important data on what went wrong, Cowen says.

    Shares of top supplier Spirit AeroSystems (NYSE:SPR -5.6%) are down almost as much as Boeing; some Boeing suppliers also trade lower, including TDG -1.4% and HXL -1%.

    "Don't buy Boeing, buy Spirit AeroSystems," Dhierin Bechai writes in an analysis published on Seeking Alpha.

    Shopify headlines a swing lower in e-commerce stocks

    CPNG -3.01%Mar. 21, 2022 10:34 AM ET1 Comment

    The e-commerce sector continued with its recent history of turbulent trading, headlined by Shopify (NYSE:SHOP) dropping 15.00% in early trading on Monday to put the quick skids on what was a four-session rally that saw shares gain almost 30%.

    Other Internet retail stocks that traded lower included Etsy (ETSY -4.9%), Wayfair (W -5.9%), Global-e Online (GLBE -8.5%), a.ka. Brands (AKA -6.2%), Carvana (CVNA -5.0%), Chewy (CHWY -6.4%), Farfetch (NYSE:FTCH -6.6%), MercadoLibre (NASDAQ:MELI -4.5%), Overstock.com (OSTK -4.9%) and Coupang (NYSE:CPNG -4.5%).

    Over the last month, the e-commerce sector in general has seen outsized swings up and down based off the risk-on, risk-off sentiment emanating from the latest Russia-Ukraine headlines. Shopify (SHOP) has been the stock in the group with the most volatility. The Seeking Alpha Quant Rating on SHOP flipped to Strong Sell from Hold on February 22.

    Cathie Wood’s ARKF dives 5% as it's third largest holding SHOP plunges 16%

    ARKF -3.97%Mar. 21, 2022 10:32 AM ET5 Comments

    Cathie Wood’s ARK Fintech Innovation ETF (NYSEARCA:ARKF) dropped 5.1% in early morning trading as the exchange traded fund is weighed down by Shopify (NYSE:SHOP), which has cratered 16.1%.

    Wood’s ARKF has the highest weighted holding in SHOP compared to any other exchange traded fund on the market, as the fund has an 8.99% holding in the multinational e-commerce giant. Moreover, SHOP is ARKF’s third-largest holding.

    ARKF, which is actively managed, provides investors exposure to the domestic and foreign equity market, where businesses are engaged in the theme of financial technology.

    Not only has ARKF struggled in 2022, but the ETF is also now -55.5% from its record high of 64.49 a share, dating back to Feb. 16, 2021. ARKF now trades at 28.10 a share.

    Shopify starts the trading day against a wall of sellers after having its best week in 2022 last week. SHOP struggles as growth names remain under pressure, with the Nasdaq (COMP.IND) sliding 1.1% early on.

    Year-to-date price action: ARKF -30.1% and SHOP -52.2%.

    ARKF is not the only fund of Wood’s that has faced market challenges. Her flagship ARK Innovation ETF (ARKK) continues to suffer as two-thirds of its holdings fell to 52-week trading lows last week.

    New semiconductor ETF plans to launch as the sector struggles in 2022

    SOXX -1.87%Mar. 21, 2022 9:29 AM ET

    Columbia Threadneedle ETFs intends to enter the semiconductor exchange traded fund marketplace. The issuer filed a prospectus for the Columbia Seligman Semiconductor and Technology ETF (SEMI) with the U.S. Securities and Exchange Commission.

    SEMI will be an actively managed fund that offers the investment community access and exposure to the semiconductor equipment market and stocks involved with the design, development, manufacturing process, distribution or sale of semiconductors and related technologies. Moreover, the ETF aims to come to market with a 0.75% expense ratio.

    The fund plans to launch as many other semiconductor exchange traded funds have fallen double digits compared to the S&P 500 (SP500), which is down 6.6% on the year. Additionally, as SEMI hits the market, it will presumably have to fight in a competitive market against other ETFs that offer similar exposures.

    Five competitive semiconductor ETFs SEMI will stack up against are: The iShares Semiconductor ETF (NASDAQ:SOXX), VanEck Semiconductor ETF (NASDAQ:SMH), First Trust Nasdaq Semiconductor ETF (FTXL), Invesco Dynamic Semiconductors ETF (PSI), and the leveraged Direxion Daily Semiconductor Bull 3x Shares (SOXL).

    Year-to-date price action: SOXX -14.3%, SMH -14.7%, FTXL -15.1%, PSI -14.8%, and SOXL -45.7%.

     


  19. March 21st, 2022 at 11:09 am | Permalink Ignore this user

    Phil BDX I just have the 240/290 leap and I noticed ther is quite a big difference in the spread between buying and selling at least 2$. Is it worth to get out?


  20. March 21st, 2022 at 11:15 am | Permalink Ignore this user

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  35. March 21st, 2022 at 11:29 am | Permalink Ignore this user
    How do we solve a problem like Putin? Five leading writers on Russia have their say
    By: Tom Burgis, Catriona Kelly, Oliver Bullough, Ruth Deyermond, Peter Pomerantsev


  36. March 21st, 2022 at 11:30 am | Permalink Ignore this user
    Subtle clues China is turning on Putin
    By: Jamie Seidel of News.com.au


  37. March 21st, 2022 at 12:11 pm | Permalink Ignore this user

    Phil / Y —-  Buffett found something he likes…  

    Berkshire Hathaway (NYSE:BRK.A) and Alleghany (NYSE:Y) have entered into a definitive agreement wherein the former will acquire all outstanding Alleghany shares for $848.02/share in cash.

    The transaction, scheduled to close in 4Q22, represents a total equity value of ~$11.6B and a multiple of 1.26 times Alleghany’s book value as of Dec.31, 2021 and a 29% premium to Alleghany’s average stock price over the last 30 days.

    Post closure, Alleghany will continue to operate as an independent subsidiary of Berkshire Hathaway.

    Under agreement terms, Alleghany may actively solicit and consider alternative acquisition proposals during a 25-day go-shop period.


  38. March 21st, 2022 at 12:16 pm | Permalink Ignore this user

  39. March 21st, 2022 at 12:16 pm | Permalink Ignore this user

  40. March 21st, 2022 at 12:17 pm | Permalink Ignore this user

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  43. March 21st, 2022 at 12:34 pm | Permalink Ignore this user

    BDX/Yodi -  Well, the spread is in good shape but it's hard to say how difficult the options will be to trade once they spin off.  That can be very annoying if you do want to liquidate them later.  I'd ask for $52 for the $240s and offer $26 for the $290s and that's net $26 and, if either side fills, then you can work on the other.  

    Y/Batman – Good solid Buffett-type company.   What a pop! 

    Berkshire Hathaway and Alleghany stocks both gain after $11.6B deal announced

    BRK.A +2.03%Mar. 21, 2022 12:13 PM ET1 Comment

    As is usual with an acquisition announcement, Alleghany (NYSE:Y) stock, the business to be acquired, is surging almost to the acquisition price. But in a switch to the typical market reaction, shares in Berkshire Hathaway (NYSE:BRK.B +2.0%) (NYSE:BRK.A +1.9%), the acquirer, are also rising.

    Early on Monday, Berkshire (BRK.B) agreed to acquire specialty insurance firm Alleghany (Y) for $848.02 per share in cash. Alleghany stock recently traded at $844.90.

    Oftentimes, stocks of the acquirer will fall after they announce a big acquisition. In many cases, an acquirer will pay in its own shares, which automatically dilutes the holdings of existing shareholders and may hurt earnings per share. That's not the case here, as Berkshire (BRK.B) is paying in cash and has enough funds on hand to make an almost $12B purchase. At Dec. 31, 2021, the conglomerate led by Warren Buffett held more than $140B of cash and short-term securities on its balance sheet.

    In addition, there's the execution risk of whether the transaction will actually occur and how well adept the acquirer is expected to be in absorbing the new business.

    UBS analyst Brian Meredith described the deal as "a good use of excess cash, accretive to earnings," adds ~$14B of insurance float to Berkshire (BRK.B), and gives the company a high-quality specialty insurer and reinsurer.

    Berkshire Hathaway (BRK.B) has been whittling away at its pile of cash. The acquisition comes after the company spent more than $5B on boosting its stake in Occidental (OXY) in the past month.

    In addition, Meredith doesn't expect the acquisition to slow Berkshire's (BRK.B) stock repurchase activity. During Q4, the company bought back $6.9B of its shares.

    Stocks vacillate, bond sell off continues as fear of inflation takes hold

    Mar. 21, 2022 11:52 AM ET10 Comments

    In choppy Monday trading, the stock market turns mixed again, with the Dow falling the most — a pause from last week's rebound. Meanwhile, bonds sell off as traders prepare for surging inflation fueled by soaring oil prices.

    The Nasdaq edges down 0.1%, the S&P 500, the strongest of the three major U.S. stock averages, edges up 0.1%, and the Dow -0.5%. Four out of the six megacap stocks are now the green, with only Microsoft and Facebook in the red.

    The yield curve flattens as the 2-year Treasury yield jumped 8 basis points breaking above 2% to 2.03%, and the 10-year Treasury yield has risen 9bps to almost 2.25%, which is where the 5-year Treasury yield currently stands.

    Six of the 11 S&P 500 industry sectors are gaining, with Energy the most robust. Crude oil is rising 4.6% to $109.48 per barrel. Communication Services lags by the most in midday, followed by Financials.

    Citi's strategy team, though, contends that jumping oil prices may not necessarily lead to a drop in global equities. "Global equity performance following oil shocks is inconsistent," the group led by Robert Buckland said in a note. They note that the latest MSCI AC World trailing price/earnings (19x) looks expensive in relation to the average valuation of past oil shocks (16x), "but equities are currently much cheaper against bonds than they were back then," the strategists said.

    Kinsdale Trading is "cautiously optimistic that stocks are in the process of putting in a near-term bottom" and stabilizing in a 4,300-4,600 range for the S&P 500, according to a note to clients. That thesis, though, could fall apart if there's a significant hawkish shift at the Fed, acceleration in economic growth data, or an inversion of the yield curve, the firm said.

    Monday's weak showing follows last week's strong performance, as the Federal Reserve laid out plans for rate increases and indicated it will soon finalize a plan for shrinking its balance sheet.

    Wheat ETF rises as continued fighting in Ukraine threatens grain supplies

    WEAT +7.61%Mar. 21, 2022 11:48 AM ET1 Comment

    The Teucrium Wheat Fund (NYSEARCA:WEAT) has risen 7.3% since Friday's close as the Russian military onslaught continues in Ukraine. Concerns about supplies of grain have forced prices for wheat sharply higher.

    The advance came as Ukraine rejected the Russian demand to surrender the southeastern city of Mariupol, a sign that fighting could drag on into the foreseeable future. Russia and Ukraine are two of the leading suppliers of the world's grain and together represent nearly a third of the world's grain exports.

    WEAT has now swelled to +26.8% since Russia invaded Ukraine back on Feb. 24 and at one point peaked at +51.4%. As the war continues, WEAT, one of the market's top performing funds recently, has had its best overnight advance since Mar. 4, when the fund touched its recent eight-year peak.

    WEAT, with its 1.00% expense ratio, is not the only agriculture-based fund experiencing positive action on Monday. Four others are the iPath Bloomberg Grains Subindex Total Return (JJGTF) +4.7%, ELEMENTS Linked to the MLCX Grains Index – Total Return (NYSEARCA:GRU) +4.6%, iPath Series B Bloomberg Agriculture Subindex Total Return ETN (NYSEARCA:JJA) +2.8%, and the Invesco DB Agriculture Fund (NYSEARCA:DBA) +2.1%.

    Year-to-date price action: WEAT +44.2%, JJGTF +31.3%, GRU +32.6%, JJA +24.5%, and DBA +12.4%.

    The conflict in Ukraine has already led nations to reassess their energy security, but food security is also now making waves.

    BA recovering already.  I was thinking now is a good time to add the bull call spread but we already have $200 short puts we sold for $15,000 so maybe just be happy if those go worthless.


  44. March 21st, 2022 at 1:50 pm | Permalink Ignore this user

    Powell giveth and Powell taketh away:

    Federal Reserve Chairman Jerome Powell said the central bank is prepared to raise interest rates in half-percentage-point steps and high enough to deliberately slow the economy if it concludes such steps are warranted to bring inflation down.

    “We will take the necessary steps to ensure a return to price stability,” Mr. Powell said Monday in remarks prepared for delivery at an economics conference in Washington, D.C.

    The Fed raised its benchmark interest rate by one-quarter of a percentage point to a range between 0.25% and 0.5% last week.  Most Fed officials believe a neutral rate, assuming 2% inflation, is near 2.5%.

    “If we conclude that it is appropriate to move more aggressively by raising the federal-funds rate by more than [one-quarter of a percentage point] at a meeting or meetings, we will do so,” he said. “And if we determine that we need to tighten beyond common measures of neutral and into a more restrictive stance, we will do that as well.”

     

    Mr. Powell said the inflation outlook “had deteriorated significantly even before Russia’s invasion of Ukraine,” and he warned that the effects of the war in Europe and the West’s response to heavily sanction Russia’s economy could further aggravate supply-chain disruptions while sending up prices of key commodities used to make a range of goods.

    “There is no recent experience with significant market disruption across such a broad range of commodities,” said Mr. Powell. He highlighted the historical experience with oil-price shocks of the 1970s: “Not a happy one,” he added.

    But he added several caveats: “No one expects that bringing about a soft landing will be straightforward in the current context—very little is straightforward in the current context,” Mr. Powell said.

    Monetary policy is a “blunt instrument, not capable of surgical precision,” he added. “My colleagues and I will do our very best to succeed in this challenging task.”

    Running Around Crazy GIFs | Tenor

     

       

  45. March 21st, 2022 at 3:11 pm | Permalink Ignore this user

    Phil / AVGO – Just closed out both short term callers on my around my 120 X  '24 500 / 660 BCS.  looking to load up on some short term calls and puts….  

    What do you think about the following short sales  15X Jly $650 Calls for $18 ish and the 15XJan '23 puts for 520 puts for 43 ish.    

    or the point with the following pair

    15 Juls 640 Call (22) and  15X 530 put (22)


  46. March 21st, 2022 at 3:24 pm | Permalink Ignore this user

    Now Biden is warning businesses of impending Russian cyber-attack.

    Biden administration warns Russian government exploring options for cyberattacks

    PANW -0.33%Mar. 21, 2022 2:54 PM ET6 Comments

    The Biden Administration said on Monday that based on evolving intelligence, the Russian government is exploring a number of options for potential cyberattacks, reiterating its previous stance.

    "From day one, my Administration has worked to strengthen our national cyber defenses, mandating extensive cybersecurity measures for the Federal Government and those critical infrastructure sectors where we have authority to do so, and creating innovative public-private partnerships and initiatives to enhance cybersecurity across all our critical infrastructure," Biden said in a statement.

    The President added that his Administration will use all of its tools to "deter, disrupt" and if necessary, respond to these potential attacks.

    Biden also called on the private sector to help owners of critical infrastructure and "lock their digital doors."

    The statement did not mention any companies by name, but several analysts have highlighted the sector's potential based on potential cyberattacks following Russia's invasion of Ukraine.

    Biden added that the Department of Homeland Security's Cybersecurity and Infrastructure Security Agency is working with organizations across different infrastructures to share information and offer guidance on how to protect their systems and networks.

    Last week, Wedbush Securities analyst Dan Ives said the next months and years ahead would be "a golden age for the cybersecurity sector," noting Palo Alto Networks (NASDAQ:PANW), Zscaler (ZS), CrowdStrike Holdings (CRWD), SentinelOne (S), CyberArk (CYBR) and Tenable (TENB) were leading the efforts.

    Russian court backs Facebook/Instagram ban, permits WhatsApp

    FB -3.38%Mar. 21, 2022 3:03 PM ET5 Comments

    • Russia continues to litigate a battle against Meta Platforms (FB -3.3%), with a court backing up an existing ban of Facebook and Instagram based on a new law against "extremist activity."
    • Meta is prohibited from opening branches in Russia and from doing business there, according to state media outlet TASS.
    • That court decision came in spite of arguments from Meta attorneys that the company wasn't engaged in extremism or "Russophobia," and that Russia didn't have judicial oversight over a foreign company.
    • The ban doesn't extend to Meta's WhatsApp, however, and Russian users will continue to be allowed to use that application.
    • WhatsApp is one of Russia's most popular apps, used by up to 65% of the country's Internet users – some 67 million, vs. only about 7.5 million Facebook users, according to eMarketer/Insider Intelligence.
    • Meta had angered Russia by easing its hate-speech policies to allow calls for violence against Russian soldiers, before clarifying the guidance to restrict calls for assassination of leadership.

    Avgo/Batman – They've been running a little hot for my taste.  They are projecting $15Bn in earnings after $6.7Bn last year so I'd have to see it to believe it in Q1.  I would not be too aggressive with puts and less aggressive on calls because if the earnings miss or the market tanks – it's not that likely they don't drop back to $500 or less. 


     

    Lockheed tops defense stocks as rally marches on; Cowen raises PT to $435

    LMT +3.31%Mar. 21, 2022 2:55 PM ET4 Comments

    U.S. defense contracting stocks led by Lockheed Martin (NYSE:LMT +3.3%) are in rally mode as Russia's invasion of Ukraine shows no signs of easing.

    Other notable gainers in Monday's trading include HII +3.5%, NOC +3.4%, LHX +2.7%, GD +1.9%, RTX +1.8%.

    ETFs: BATS:ITA, XAR, DFEN, FITE, PPA

    Cowen analyst Cai Von Rumohr raised his Lockheed Martin price target to $435 from $390, saying the conflict is producing support for higher defense spending in the U.S. and Europe, with greater focus on traditional ground warfare systems such as vehicles, missiles and helicopters, which account for ~60% of Lockheed's sales.

    Because new sales would be for in-production systems, they should be "solidly profitable, but they're unlikely to add to LMT's results" before late 2023 or 2024, von Rumohr writes, keeping Lockheed rates at Market Perform and preferring General Dynamics and Northrop Grumman.

    With the Aerojet Rocketdyne deal nixed, von Rumohr also thinks Lockheed could boost its indicated ~$4B stock repurchase, adding that each incremental $1B would add ~$0.25 to annual EPS.

    The U.S. reportedly is now rushing the development of hypersonic weapons.

    And speaking of state of the art Defense companies:

    Triller to acquire Pillow Fighting Championship, terms undisclosed

    SEAC +3.99%Mar. 21, 2022 2:41 PM ET1 Comment

    • Triller is acquiring family-friendly company in combat sports, Pillow Fight Championship (FightPFC), for an undisclosed amount.
    • Financial terms were not disclosed.
    • The Triller and FightPFC deal joined the recently announced acquisition of BKFC and the creation of Triller's Triad and the Triller's acquisition of FITE last year.
    • Triller Fight Club and FightPFC will focus on delivering the best experiences for creators, athletes, influencers, and brands.
    • Triller Fight Club has sold over 3M pay-per-view after being launched for less than two years ago, one of the top-selling and fastest-growing subscriber bases in combat sports and entertainment platforms.
    • In December 2021, Triller announced to go public on Nasaq via merger agreement with SeaChange International (NASDAQ:SEAC) which would result in the combined company being named TrillerVerz Corp.


  47. March 21st, 2022 at 3:30 pm | Permalink Ignore this user

    Oops, the attacks are already happening?

    Apple services, including Apple Music, Apple TV+, down

    AAPL -0.41%Mar. 21, 2022 2:37 PM ET14 Comments

    • Apple's (NASDAQ:AAPL) services, including Apple Music, iCloud, Apple TV+, Maps and more are down, according to Down Detector, an online platform that gives real-time information regarding the status of various websites and services.
    • A look at Apple's services website, however, paint a different picture, with all services appearing as "available."
    • It is not yet known how widespread the outage is, though Bloomberg reported that the outage is also impacting Apple's (AAPL) internal corporate and retail operations, which is hampering remote work and retail operations.
    • Apple (AAPL) did not immediately respond to a request for comment from Seeking Alpha.
    • A number of other services were also having intermittent problems on Monday, including Amazon Web Services (AMZN), PayPal (PYPL) and Workday (WDAY), though an AWS spokeswoman told Seeking Alpha the service was working properly.
    • Last week, Wedbush Securities analyst Dan Ives said Apple (AAPL) is still the top tech stock after the Federal Reserve gave a "bright green light" to own oversold tech stocks.

    Aluminum, steel names rise as Russia-Ukraine war lifts metal prices

    CENX +11.36%Mar. 21, 2022 2:37 PM ET

    Aluminum and steel stocks are surging as Australia banned alumina exports to Russia and Europe considers prohibiting Russian steel.

    Among major movers: NASDAQ:CENX +10.6%, NYSE:AA +10%, NYSE:X +5.7%, TMST +5%, NUE +4.7%, CLF +4.5%, KALU +4.1%.

    Australia said its ban on exports of alumina and aluminum ores to Russia, part of sanctions in the wake of the invasion of Ukraine, would limit Russia's capacity to produce aluminum, as Australia supplies ~20% of the country's alumina.

    "The demand for aluminum has soared globally while there is a supply deficit that may keep supporting aluminum prices in the near-to medium-term," Kunal Sawhney, CEO at research firm Kalkine, told Reuters.

    According to Bloomberg, benchmark rates for hot-rolled coil in northern Europe jumped 10% to €1,435/ton ($1,583), and prices for rebar rose to a fresh all-time high.

    Argus reports the north European hot-rolled coil contract traded 50K tons for the first time this month, with April trading up to €1,500/ton twice.

    Saying Alcoa can achieve its twin goals of becoming a lower cost and a lower carbon aluminum producer, Alcoa recently merited a Buy rating at Bank of America.

    Guggenheim trims Disney target, but stays upbeat on Parks ahead of investor event

    DIS -2.07%Mar. 21, 2022 1:14 PM ET9 Comments

    Guggenheim is trimming its price target on Walt Disney (DIS -2%), with a close eye on the Parks business ahead of a catalyst in Disney's Parks Investor Experience March 28.

    The firm's update comes as Disney's parks stay in the spotlight amid employee concerns over the company's position on Florida's Parental Rights in Education bill, nicknamed the "Don't Say Gay" bill. CEO Bob Chapek has apologized for a slow response against the bill after taking heat from employees.

    “Speaking to you, reading your messages, and meeting with you have helped me better understand how painful our silence was,” Chapek said. “It is clear that this is not just an issue about a bill in Florida, but instead yet another challenge to basic human rights. You needed me to be a stronger ally in the fight for equal rights and I let you down. I am sorry.”

    Guggenheim notes that a "rapid recovery" of park economics has been part of the analyst bull case, and while it's Neutral on the company, it has a positive view of the parks unit with "multiple points of forward-looking focus including attendance and capacity drivers, new attractions and resources, technology upgrades, per-capita spend expansion opportunities, new business initiatives, and spending requirements to drive further growth."

    Its data tracker is implying record attendance in the fiscal second quarter, driven by local demand as international typically lags. The firm sees about a 7% revenue compound annual growth rate in the domestic parks business through fiscal 2025.

    More detail should arrive with next Monday's Parks Investor Experience, its first such in-person event since the Star Wars: Galaxy's Edge experience in May 2019.

    Guggenheim cut its price target to $150 from $172, though, noting ongoing media concerns that consensus expectations for growth in the streaming segment are too optimistic. That target implies 9% upside from here.

    Elsewhere, a CNBC dive into the relationship between Chapek and former CEO Bob Iger says their relationship began to fall apart in April 2020, as Iger commented to The New York Times about wanting to help Chapek run Disney through the COVID-19 pandemic – comments that CNBC says made Chapek furious.

    The two rarely talk, with Chapek working with an inner circle that hasn't included Iger, and with Chapek in the spotlight of the Florida controversy, the rift puts a shadow over the company's immediate future, CNBC says.

    DIS Short Put 2022 14-APR 160.00 PUT [DIS @ $138.33 $-1.97] -20 11/19/2021 (24) $-27,400 $13.70 $8.13 $-49.40     $21.83 $1.75 $-16,250 -59.3% $-43,650
    DIS Long Call 2024 19-JAN 140.00 CALL [DIS @ $138.33 $-1.97] 50 12/21/2021 (669) $165,000 $33.00 $-10.70     $22.30 $-1.20 $-53,500 -32.4% $111,500
    DIS Short Call 2023 20-JAN 180.00 CALL [DIS @ $138.33 $-1.97] -30 2/18/2022 (305) $-48,000 $16.00 $-13.21     $2.79 $-0.39 $39,630 82.6% $-8,370
    • For the Butterfly Portfolio, the 2024 $140s are $22.30 and the 2024 $130s are $27.50 so close enough to do the roll.

  48. March 21st, 2022 at 3:36 pm | Permalink Ignore this user

    In the LTP, let's sell 5 DIS 2024 $130 puts for $16 ($8,000).  Can't see regretting that.