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Thursday Thoughts – Ch-ch-ch-ch-changes

"Still don't know what I was waitin' for

And my time was runnin' wild

A million dead end streets and

Every time I thought I'd got it made

It seemed the taste was not so sweet

So I turned myself to face me

But I've never caught a glimpse

How the others must see the faker

I'm much too fast to take that test

"Ch-ch-ch-ch-changes

Turn and face the strange

Ch-ch-changes

Ooh, look out, you rock 'n' rollers

Ch-ch-ch-ch-changes

Turn and face the strange

Ch-ch-changes


Pretty soon now you're gonna get older" – Bowie 

I love it when I mention something in the Webinar and, the next day, it becomes a major article in the mainstream media.

We were discussing how Covid is permanently changing the cities and I was looking for statistics and now here they are.  NY, LA and Chicago alone lost 700,000 people last year – the population of a large city itself.  US population on the whole was the flattest it's ever been, with 0.1% growth so please, tell me again how GDP is going to grow this year? 

The good news is that job growth is much more impressive when it doesn't have to keep up with population growth.  In a normal year, the US adds about 2M people – so you need 150,000 jobs per month just to employ the growing population but the population only grew by 300,000 all of last year – not even enough to staff Popeye's (QSR).  

NY (8.3M), LA (4M) and Chicago (2.7M) have 15M people, so we're talking about an exodus of 5% of their population in a single year – you would think it was Kyiv!  The map on the right shows how many vacant buildings there are in NY's Greenwich Village and it would be a LOT worse if most commercial leases didn't run 5 and 10 years – so there are many, many lots that are technically occupied but with non-paying tenants.  

Restaurants average ten-year leases, and twenty-plus isn't unheard of for larger chain retail. With a fixed yearly percentage increase normally locked-in, landlords want to get the highest possible rent at the outset; taking a cheaper tenant means leaving lots of money on the table over the term of the lease. In a hot neighborhood, a tenant could end up paying below market by the end of the lease term as neighboring rents (and property taxes) increase. Rather than take the risk, landlords leave spaces vacant and hold out for big tenants.

Rent in desirable, high-traffic locations is always expensive: a small Lower East Side storefront goes for $8,000/mo, cavernous spaces in glitzy midtown high-rises run into the hundreds of thousands (often hidden behind 'Call for price' or 'Negotiable' on listings.) The pool of tenants for a 2200sf, $36,000/mo restaurant space by Union Square is shallow, the one for a $1,600/sf/yr space on Madison Ave (making that same restaurant $290,000/mo) is barely a puddle. Only the biggest chains can afford the spaces, usually at a loss absorbed by other stores. With a limited selection of tenants to woo, plus large corporations' glacial negotiating pace, expensive storefronts sit empty for years.

Add to all this the fact that (as we investigated yesterday) 1M people PER DAY, who used to commute to NYC may never do so again and another 1M have left the city.  For NYC's 7,000 restaurants that's  285 less lunches EACH and for 25,000 bars, that's 80 less drinks at happy hour (maybe 160).  Yeah, that's right, we drink almost 4 times more than we eat in NYC!  And you know what?  We drink at the restaurants too – take that Boston 

So the situation in the cities is this:  5% of their population left last year and a large portion of the commuters aren't showing up.  That is devastating for retailers and restaurants (and tourism is way down too).  All this has been papered over by $11Tn in bailouts over the past two years (25% of our GDP per year!) but the fact of the matter is that many, many retailers and restaurants are stuck in leases they can no longer afford and if we have another year or two of population outflows – you're going to start to see these cities die slow, painful deaths.  

Data] 2021 Restaurant Inflation and Its Impact | 7shiftsOne of the reasons you are seeing such sharp increases in restaurant costs isn't just the food costs or the staff costs – you are paying for the customers who aren't there.  The restaurant has to cover their fixed costs and whether it's divided by 6,000 customers per month of 4,000 customers per month – the costs are essentially the same so let's say that $36,000/month restaurant used to charge $6 per meal for rent, now they charge $9 – inflation!  If more people move out – the restaurant has to charge more to the people who remain – causing them to want to move as well.  

It's downright depressing walking around Manhattan these days with 1 in 4 stores you pass boarded up:

New York City could start tracking vacant storefronts - ABC7 New York

Urban Decay is now a brand of cosmetics so good luck Googling the concept and I guess they thought it was a fun name because most people have forgotten the 70s and early 80s when many cities turned into war zones (remember Robocop, Death Wish, Escape from New York?) and NYC almost went bankrupt?  Here's the Wikipedia take on it:

Urban decay (also known as urban roturban death and urban blight) is the sociological process by which a previously functioning city, or part of a city, falls into disrepair and decrepitude. It may feature deindustrializationdepopulation or deurbanizationeconomic restructuring, abandoned buildings or infrastructure, high local unemployment, increased poverty, fragmented families, low overall living standards or quality of life, political disenfranchisement, crime, elevated levels of pollution, and a desolate cityscape known as greyfield or urban prairie.

Since the 1970s and 1980s, urban decay has been a phenomenon associated with some Western cities, especially in North America and parts of Europe. Cities have experienced population flights to the suburbs and exurb commuter towns; often in the form of white flight.[1] Another characteristic of urban decay is blight—the visual, psychological, and physical effects of living among empty lots, buildings and condemned houses.

The same conditions we had then are hitting us now and we are WAY too distracted by all the other problems to give a second's thought to cities that MIGHT be in trouble but 5% of the population fleeing in one year is A BIG F'ING WARNING SIGN and I strongly suggest politicians heed it now – rather than when it's already too late to stop it.  

Oh, who am I kidding – most of the problems we do have now are exactly because no one wanted to address them when they were smaller.  We're just screwed…

Running on empty: When New York City faced the consequences of financial  finagling - New York Daily News

 


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  1. Good Morning.


  2. Phi/NYC – Remeber the good old days with hookers on the street, drug dealers, and large swaths a no go zone? Good times!


  3. Phil / AAPL – time to sell some short callers in the butterfly position?




  4. Rising Rates Will Shift Housing’s Foundations


  5. Putin and Xi Exposed the Great Illusion of Capitalism



  6. Good morning!

    NYC/Seer – It is amazing how 42nd Street has changed since the 80s – by 2000 we were strolling there with our kids, going to see shows.  Disney did that, they bought a whole block on the corner of 42nd and Broadway and worked with the Mayor and the police to clean up the area.  That gave others the incentive to come in and remake it.  

    42nd Street Now! — Robert A.M. Stern Architects, LLP

    AAPL/Batman – Yes, good point.  We've got a $480,000 spread that's net $378,400 (not counting the $30,000 short puts) so $101,600 left to gain if AAPL holds $150 but that means we only have 26.8% left to gain so not even worth keeping for 9 more months if it's just going to sit there. Earnings are late April and the June $180s are $5.35 so selling 40 of those is $21,400 using 85 of 302 days remaining.  If AAPL goes up, we can roll and, if AAPL goes down, we sell another $20,000 and that can help pay for a roll. 

    The 2024 $120 calls are $62.75 (+$7.15 = $114,400), so that seems like a good investment but the 2024 $130s are $55.50, which is essentially an even roll and we don't pay $7.15 for $10 in position, do we?  So, let's consider the implications of rolling to the 2024 $130s.  We delay our payout and cut $160,000 from our spread but the premise is that the Jan $150s at $32 have $11 of premium that will expire and, at the moment, the 2024 $170s are $31.50 so, if all goes well, the Jan $150s will be rolled HIGHER than $170 AND we have another 12 months to sell short calls so the FREE roll to the 160 2024 $130 calls is a no-brainer.

    AAPL Long Call 2023 20-JAN 120.00 CALL [AAPL @ $171.12 $0.91] 160 1/20/2021 (302) $448,000 $28.00 $27.60 $7.69     $55.60 $0.05 $441,600 98.6% $889,600
    AAPL Short Call 2023 20-JAN 150.00 CALL [AAPL @ $171.12 $0.91] -160 1/21/2021 (302) $-360,000 $22.50 $9.45     $31.95 $0.46 $-151,200 -42.0% $-511,200
    AAPL Short Put 2023 20-JAN 125.00 PUT [AAPL @ $171.12 $0.91] -40 9/20/2021 (302) $-42,000 $10.50 $-6.30     $4.20 $-0.10 $25,200 60.0% $-16,800
    AAPL Short Put 2024 19-JAN 120.00 PUT [AAPL @ $171.12 $0.91] -20 10/15/2021 (666) $-25,500 $12.75 $-5.23     $7.53 $-0.08 $10,450 41.0% $-15,050

    The Butterfly Portfolio is $1,557,577 and we had $101,600 left to gain on AAPL (not counting $30,000 on the puts that aren't changing) but now we're rolling (in stages) to a wider, but still conservative, spread in 2024 that will add at least another $160,000 of potential gains and gives us 4 more quarters to sell $20,000 worth of short calls.  That's a good use of our $378,400 – call it $240,000 (63%) of additional upside potential added at the cost of 12 months of PATIENCE.  








  7. Apple is poised for a grand fintech offensive




  8. Exclusive poll: Inflation hits Latino support for Democrats


    • iRobot (NASDAQ:IRBT) made a solid gap-up opening on Thursday after investment firm Northland Securities upgraded the stock to "Outperform" from "Market Perform" in premarket hours.
    • The brokerage presently has a price target of $85 on industrial product's company, implying a potential upside of 41.29% from the stock's last close.
    • It comes right after the US Trade Representative (USTR) stated that it has reinstated 352 expired product exclusion from US Section 301 tariffs on Chinese imports.
    • That points the direct impact on iRobot as the company's core product vacumm cleaners get a spot in the exclusions list.
    • Initially, 549 products were excluded from tariffs levied under Donal Trump administration in a trade war with China. Except for products related to the fight against Covid-19, most tariff exemptions expired at the end of 2020.
    • IRBT stock is up 11% to trade at $66.51 at the current pixel time on Thursday.

    Cleveland-Cliffs (NYSE:CLF +10.2%) surges to its highest level in nearly nine years, maintaining its steady climb in recent weeks as Russia's war on Ukraine hits global steel supplies.

    J.P. Morgan names Cleveland-Cliffs as its top pick in the steel sector, as reported by Barron's, with analyst Michael Glick saying Russia's invasion "nearly instantly set off a butterfly effect across the steel markets," with the impact only beginning to be felt in North America.

    While Glick also issues Overweight ratings for other steel names including Commercial Metals (CMC +4.3%), Steel Dynamics (STLD +2.0%) and Stelco (OTCPK:STZHF +6.7%), Cleveland-Cliffs is his favorite because it is "long raw materials via its iron ore assets, pellets with excess capacity, [hot-briquetted iron] plant, scrap business and also has key steelmaking assets for the automotive industry."

    JPM raises its steel price forecasts to an average of ~$1,500/ton for the rest of the year and to ~$1,300/ton for 2023, and still sees broad upside for the group, noting that "in prior cycles, you historically want to own the stocks up until the last few price hikes."

    Cleveland-Cliffs is the largest supplier of steel to the U.S. auto sector by a wide margin, and CEO Lourenco Goncalves believes the company is primed to benefit from an eventual auto industry recovery.

    CLF Long Call 2024 19-JAN 15.00 CALL [CLF @ $32.07 $2.91] 50 12/3/2021 (666) $42,500 $8.50 $10.68 $8.50     $19.18 $2.62 $53,375 125.6% $95,875
    CLF Short Call 2024 19-JAN 22.00 CALL [CLF @ $32.07 $2.91] -50 12/3/2021 (666) $-29,000 $5.80 $8.93     $14.73 $2.50 $-44,625 -153.9% $-73,625
    CLF Short Put 2024 19-JAN 20.00 PUT [CLF @ $32.07 $2.91] -20 12/3/2021 (666) $-12,800 $6.40 $-3.20     $3.20 - $6,400 50.0% $-6,400

    Nice pop for us since December and we were pretty aggressive on that trade too!  The bull call spread is still only net $22,000 out of $35,000 so happy to wait.  Net with the short puts it's $15,500 out of $32,000 so still good for a double if CLF holds $22 – aren't options fun?  

    So funny that we have these obvious trades with 100% upside and it doesn't even merit a top trade – we can do better!

    Mar. 24, 2022 12:39 PM ET6 Comments

    • New commercial vehicle registrations in the European Union fell 15.7% to 131,874 units in February, followed by 11.1% decline in January.
    • Except for heavy commercial vehicles, all segments recorded declines.
    • Spain -23.3%, France -21.4%, Germany -8.1% and Italy -4.8%.
    • On YTD basis, demand for commercial vehicles in the EU decreased by 13.5% to 257,127 units.
    • New light commercial vehicles registrations fell 18.2% to 99,461 units for the month due to semiconductor shortages.
    • New heavy commercial vehicles registrations rose 0.4% to 19,690 units.
    • Registrations of new medium and heavy commercial vehicles down 1.5% to 23,124 units. This decline was mainly the result of double-digit losses in several Central European markets, which dragged down the region’s overall performance.
    • Registrations of new medium and heavy buses & coaches dipped 12.9% to 1,851 units for the month.
    • Last 12 months trend:

    NVDA +8.45%Mar. 24, 2022 12:33 PM ET10 Comments

    Nvidia (NASDAQ:NVDA), Advanced Micro Devices (NASDAQ:AMD) and Intel (NASDAQ:INTC) were among the top gainers in the S&P 500, a day after Nvidia's Chief Executive Jensen Huang said the company would consider using Intel's (INTC) foundry.

    If a deal is done between Nvidia and Intel to become a customer for the chip giant's upcoming foundry push, it would build on an existing relationship, Huang said at a press event on Wednesday.

    Huang added that any potential use of Intel (INTC) as a foundry is not likely to happen anytime soon, however.

    Nvidia (NVDA) shares rose nearly 8.5% to $278.44, while Intel (INTCgained more than 5% to $50.79.

    Advanced Micro Devices (AMD) shares rose in sympathy, tacking on slightly more than 5% to $119.81.

    Other chip stocks, such as Broadcom (AVGO), Micron (MU) and Texas Instruments (TXN) were all up 1% or more.

    The iShares Semiconductor ETF (SOXX), which is comprised of the aforementioned chipmakers, was also higher on Thursday, gaining nearly 4%.

    The S&P 500 rose 0.8% in mid-day trading on back of the chip strength, though the broader index has fallen 6.3% year-to-date.

    On Tuesday, unveiled a number of new products, including the Hopper H100 GPU with 80 billion transistors, based off the company's new Hopper architecture.

    Following the Hopper H100 unveil, Huang showed off the DGX H100 system, which will let the company's customers create language models, recommender systems, as well as use in healthcare and drug research and climate science. The DGX H100 uses 8 H100 GPUs per system and is connected with the Nvidia NVLink.

    In addition to the Hopper architecture, Nvidia (NVDA) showed off its first Arm Neoverse-based discrete data center CPU, known as the Grace CPU Superchip, as it looks to further entrench itself in the data center space and compete with Intel and AMD.

    In February, Bank of America said Nvidia (NVDA) and AMD (AMD) were likely to continuing reaping the benefits of the upgrade cycle in the graphics chip market, adding that the second-half of the year should see stronger growth, as supply and mix improve.

    PhilStockWorld March Portfolio Review – Part 2 (Members Only)

    • INTC – Now you can see why INTC was not our Stock of the Year (it was a finalist) – supply chain issues and their massive capital spending plan were both headwinds for 2022 but 2023 might be their year if things progress well.  At this price, they might have beat out IBM anyway.  Great for a new trade at net $16,500 on the $80,000 spread so $63,500 (384%) upside potential at $60.  
    INTC Long Call 2024 19-JAN 40.00 CALL [INTC @ $50.77 $2.50] 40 11/1/2021 (666) $52,000 $13.00 $1.30 $13.35     $14.30 $1.66 $5,200 10.0% $57,200
    INTC Short Put 2024 19-JAN 45.00 PUT [INTC @ $50.77 $2.50] -20 11/1/2021 (666) $-13,000 $6.50 $-0.63     $5.88 $-0.56 $1,250 9.6% $-11,750
    INTC Short Call 2024 19-JAN 60.00 CALL [INTC @ $50.77 $2.50] -40 1/27/2022 (666) $-19,000 $4.75 $0.53     $5.28 $1.08 $-2,100 -11.1% $-21,100

    Net $24,350 now.  

    IBM has much less drama:


  9. PM +1.18%Mar. 24, 2022 12:30 PM ET134 Comments

    Here are the latest headlines in the Russia-Ukraine crisis:

    Philip Morris International Scales Down in Russia, Explores Full Exit

    Philip Morris International (PM) announced steps it has taken to suspend planned investments and scale down its manufacturing operations in Russia. The company's actions included discontinuing a number of its cigarette products offered in the market and reducing manufacturing activities.

    NATO Extends Stoltenberg Term for a Year

    With the threat of wider conflict hanging over Europe, NATO opted for stability on Thursday by extending Secretary-General Jens Stoltenberg’s term in office for an extra year to help steer the 30-nation military alliance through the security crisis sparked by Russia’s war on Ukraine.

    Government Action Helps Russian Market Reopen

    Government moves to keep stocks higher pushed shares like Lukoil, Rosneft and Gazprom higher, with double-digit percent gains, although Aeroflot dropped. Russia has banned short selling on the stocks in addition to preventing foreign share owners from selling. Authorities have also pledged $10B from its wealth fund to help prop up equities.

    U.S. to Welcome Refugees

    The United States will announce plans to welcome 100K Ukranian and other refugees, NBC reported.

    Google Pausing Ads That Exploit, Dismiss Russia-Ukraine War

    Google said late on Wednesday that it would not allow advertising on websites, apps or YouTube channels that are found to exploit, dismiss or allow Russia's invasion of Ukraine.

    Steep Losses

    NATO estimates that Russia has lost as much as one-fifth of the combat troops it sent into Ukraine over the past month. Between 7,000 and 15,000 Russian soldiers have been killed and up to 40,000 troops have been wounded, taken prisoner or are missing. Russia also may have lost 10% of its equipment, hindering its ability to maintain its pace of operations.

    Market Reopening

    Russia's stock market is set to partially reopen today, nearly a month after it shut down following the invasion of Ukraine. The last day it was open, the benchmark MOEX stock index plunged over 30%, so another free fall could be in the making. However, some heavy-handed policies have been implemented since then, like a ban on short-selling. Moscow has also blocked foreign investors from dumping local stocks, while the Russian government has ordered its main sovereign wealth fund to scoop up billions of dollars worth of shares.

    Energy Dependence

    Volodymyr Zelenskyy is hoping that a series of NATO, G7 and EU summits taking place this week will lead to more aid for Ukraine and additional sanctions against Russia. The U.S. and EU are already close to a deal aimed at slashing Europe's dependence on Russian energy sources and an agreement could be announced as soon as Friday. "You can expect that the U.S. will look for ways to increase LNG supplies, surge LNG supplies to Europe, not just over the course of years, but over the course of months as well," said National Security Advisor Jake Sullivan.

    -- The Associated Press contributed to this report.

    BABA -2.31%Mar. 24, 2022 11:52 AM ET66 Comments

    Update 11:52am: Adds confirmation of statement from PCAOB, talking points at bottom.

    Alibaba (NYSE:BABA) and several other Chinese tech stocks dropped after a report that the U.S. audit watchdog said speculation on a deal that would prevent hundreds of Chinese companies from being removed from U.S. exchanges is "premature."

    The Public Company Accounting Oversight Board said that while its meeting with Chinese regulators, it's not clear if Chinese authorities will agree to permit U.S inspectors to fully review audit papers of companies, the PCAOB said in statements confirmed by Seeking Alpha. The regulator said a potential agreement would be a "first step." The story was earlier reported by Bloomberg News.

    The PCAOB comments come after China's Vice Premier Liu He made comments last week in an attempt to calm investor fears and said it would continue "to support various types of companies to list overseas," noting that it would work with U.S. regulators, including the Securities and Exchange Commission on the matter.

    “While we will continue our work to find practical solutions to address the concerns of PRC authorities, ultimately, full access to relevant audit documentation is necessary to carry out our mandate on behalf of investors,” the PCAOB said in the statement. “This is not negotiable, even with respect to issuers in sensitive industries.”

    Reuters reported on Tuesday that Alibaba (BABA), JD.com (NASDAQ:JD), Baidu (BIDU) and other Chinese U.S.-listed tech firms have been told by Chinese regulators to prepare for more audit disclosures,

    Earlier this month, the China Securities Regulatory Commission and other agencies reached out to these companies and asked them to prepare audit documents for 2021.

    Alibaba (BABAfell 3.6%, JD.com (JDdropped 6.5%, Weibo (NASDAQ:WB) slipped 2.9% and Pinduoduo (NASDAQ:PDDdeclined 7.5%.

    Shares of other companies, such as Tencent (OTCPK:TCEHY), Kingsoft Cloud (KC), Huya (HUYA), DouYu (DOYU), Dada Nexus (DADA), Baozun (BZUN), Bilibili (BILI), KE Holdings (BEKE), Joyy (YY), NetEase (NTES), Zhihu (ZH), Trip.com Group (TCOM), iQIYI (IQ), Hello Group (MOMO), Vipshop (VIPS) and Dingdong (DDL) also fell on Thursday.

    Alibaba and other Chinese ADRs and Internet stocks have whipsawed around in recent weeks, which started on March 10 when the U.S. Securities and Exchange Commission named five companies from China that could be de-listed for failing to abide by U.S. accounting regulations.

    See below for the talking points from the PCAOB.

    • Speculation about a final agreement between the PCAOB and the People’s Republic of China (PRC) authorities on PCAOB access to audit firms headquartered in China and Hong Kong is premature.
    • We continue to meet and engage with PRC authorities in an effort to achieve a cooperative agreement that provides the PCAOB with the access required to inspect and investigate completely auditors headquartered in mainland China and Hong Kong. We appreciate the engagement of the Chinese Securities Regulatory Commission and Ministry of Finance to work through several important threshold issues, though it remains unclear whether the PRC government, as a whole, will agree to permit and facilitate the access we require.
    • The PCAOB’s requirements are straightforward, including the ability to inspect or investigate completely any audit engagement within our mandate, regardless of the issuer’s location or industry. This requires full access to audit work papers, firm personnel, and any other relevant information related to such audit engagements. Restrictions on PCAOB access to firms that have registered voluntarily with the PCAOB and that have chosen to perform required audits of companies that avail themselves of U.S. capital markets and are subject to U.S. federal securities laws deprive investors and the public of the benefits of the protections resulting from the work the PCAOB performs on behalf of investors.
    • While we will continue our work to find practical solutions to address the concerns of PRC authorities, ultimately, full access to relevant audit documentation is necessary to carry out our mandate on behalf of investors. This is not negotiable, even with respect to issuers in sensitive industries.
    • The Sarbanes-Oxley Act provides strong confidentiality protections and creates a privilege for any information received or prepared by the PCAOB in connection with an inspection or investigation. The strength of these protections has provided a strong foundation for cross-border cooperation with other audit regulators around the world, including full access to the documentation of the work and conclusions of auditors under inspection or investigation.
    • It is important to note that reaching an agreement, while an important and necessary first step, will not alone satisfy the requirements of the HFCAA. If an agreement is reached, we will then proceed with our inspection and investigation activities to determine if the agreement operates as intended such that we actually are able to inspect and investigate completely, in the long term, in mainland China and Hong Kong. An agreement without successful execution will not satisfy U.S. law.
    • The PCAOB’s mandate includes overseeing the audits of public companies and SEC-registered brokers and dealers in order to protect the interests of investors and further the public interest in the preparation of informative, accurate, and independent audit reports. Public companies that have chosen to avail themselves of the U.S. capital markets are required to be audited by audit firms registered with the PCAOB. The PCAOB must be able to inspect and investigate these audit firms completely, regardless of where the audit firms or the public companies they audit are located. All firms auditing public companies must play by the same rules.


  10. TTE +0.96%Mar. 24, 2022 11:35 AM ET2 Comments

    TotalEnergies (TTE +1.7%) sets out a roadmap to reduce methane emissions on operated facilities by 50% by 2025 and 80% by 2030 compared to 2020 levels, and end routine flaring by 2030.

    Total Energies also commits to cut Scope 3 emissions from petroleum products sold by more than 30% by 2030 from 2015 levels, while cutting Scope 1 and Scope 2 emissions by more than 40% by 2030.

    The company says oil will account for 30% of its sales mix by 2030, while gas will represent 50% of the mix, electricity will account for 15%, with biogas, biofuels, hydrogen and e-fuels comprising the remainder.

    The company's climate report, which will be put to a vote at the annual general meeting on May 25, is rejected by activist group Follow This, which said the plan still falls short of Paris Agreement goals.

    Also, Chairman/CEO Patrick Pouyanne said U.S. and U.K. oil majors may be stuck with their Russian assets despite saying they will leave the country due to the invasion of Ukraine.

    "Nobody wants to buy these plants today," Pouyanne reportedly said on RTL radio. "Do you want me to abandon assets in Russia to enrich Russians whom we have placed under sanctions? I won't give in to it."

    TotalEnergies said this week that it will stop purchasing oil and petroleum products from Russia by the end of the year, but will not withdraw from assets held in Russia.

    Mar. 24, 2022 11:19 AM ET

    Federal Reserve President Charles Evans said his outlook for interest rate hikes aligns with the median assessment of the central bank's policymakers — seven 25-basis-point rate increases this year and three more next year, bringing the federal funds rate target range to 2.75%-3% by end end of 2024.

    He's expecting some moderation of inflation though the next two years as the U.S. continues "to adapt to and better control the virus, as market forces work to reallocate productive resources, and as monetary policy tightens," according to prepared remarks for the Detroit Regional Chamber's State of the Region conference.

    The median FOMC projection for inflation is 4.25% at the end of 2022 then eventually come down to 2.3% by the end of 2024.

    "Needless to say, in the current environment all forecasts are subject to a great deal of uncertainty and risks," Evans said, with the Ukraine crisis and the waves of virus spreading abroad being two major sources of uncertainty.

    "With all of the uncertainty we face today, policymakers need to be cautious, humble, and nimble as we navigate the course ahead," Evans said, echoing Fed Chair Jerome Powell's recent comments.

    On Wednesday, San Francisco Fed President Mary Daly, known as dove, said the central bank may need to raise rates to over 2.5%

    Mar. 24, 2022 10:45 AM ET2 Comments

    As housing costs continue to climb, Federal Reserve Governor Christopher Waller said he'll keep a close eye on real estate to determine the appropriate stance for monetary policy.

    While he's hopeful that some pandemic-specific factors pushing up home prices and rents may start to ease in the next year or so, "longer term, many issues will continue to put upward pressure on home prices and rents," he said during an online conference sponsored by Rutgers Center for Real Estate and Israel's Alrov Institute.

    "The strong demand to live in cities with tight housing supply is likely to continue," he explained. "Regulatory supply constraints may be starting to ease in some places, but they will persist and continue to limit home building in many high demand areas."

    Prices for lumber and other materials may ease, but labor supply is likely to constrain the pace of new construction, he added.

    Waller pointed out that the pandemic-induced recession that initially hit real estate differed from the 2008-'09 financial crisis in important ways. Banks were much better capitalized and borrowers were also in better financial shape than in the previous recession.

    Still, more than half of mortgages are serviced by nonbank institutions. In that case, low interest rates (resulting from the Fed cutting rates to near zero) spurred "a large wave of mortgage refinancing helped to provide nonbank servicers the needed liquidity," he said. In addition, Ginnie Mae created a lending facility for nonbanks and limits placed on the number of payment advances required for loans by government-sponsored enterprises helped mitigate liquidity concerns, Waller said.

    On Wednesday, February rental affordability issues rise amid national rents peaking to 30% of incomes

    Mar. 24, 2022 11:03 AM ET

    • March Kansas City Fed Composite Index+37 vs. prior +29 in February
    • Manufacturing Index +46 vs. +31 prior.
    • “Regional factory activity increased at a record pace in March,” said Wilkerson. “However, due to increasing input costs and supply chain disruptions, nearly a quarter of firms noted a significant decrease in profit margins since the beginning of the year, and another 44% reported a slight decrease in profit margins.”
    • “We expect continue increases in raw materials pricing. Particularly related to freight and oil inputs (i.e., plastic packaging). We will be forced to increase pricing accordingly.”

    CVS +1.49%Mar. 24, 2022 10:47 AM ET62 Comments

    • More than 14.5M people enrolled in health insurance exchanges in 2022, the highest number since the Affordable Care Act was signed in 2010.
    • That figure is a 21% increase from 2021.
    • Around 10.3M of that number were from the 33 states that use the federal government's exchange and the rest from states that created their own marketplaces.
    • Also, due to expanded Medicaid eligibility, 18.7M adults across 39 states are now covered under that government program.
    • The U.S. Department of Health and Human Services also said the uninsured has declined to 8.9% in Q3 2021 from 10.3% in the year-ago period.
    • Wednesday was the 12th anniversary of the signing of the Affordable Care Act, legislation considered one of former President Barack Obama's signature achievements.
    • Insurance companies participating in marketplaces: Cigna (NYSE:CI +1.0%), Anthem (NYSE:ANTM +1.7%), Molina Healthcare (MOH +1.3%), Centene (NYSE:CNC +2.5%), and CVS Health (NYSE:CVS +0.9%).

    REM -0.31%Mar. 24, 2022 10:21 AM ET9 Comments

    • 30-year fixed-rate mortgage averaged 4.42% (highest since over three years) with an average 0.8 point for the week ending Mar. 24, 2022, up from last week when it averaged 4.16%; higher than 3.17% a year ago, according to the Freddie Mac Primary Mortgage Survey.

    • "Rising inflation, escalating geopolitical uncertainty and the Federal Reserve's actions are driving rates higher and weakening consumers' purchasing power. In short, the rise in mortgage rates, combined with continued house price appreciation, is increasing monthly mortgage payments and quickly affecting homebuyers' ability to keep up with the market," Chief Economist Sam Khater commented.


  11. Phil / AAPL -Would like your help on the below…. Would like to roll the following position out…..  Am looking at the following/

    Current Position is. Jan '24 70x  140 ( 47) / 180 (18).  Roll  the 140 call  out to a JUNE '24 maybe a 130 call, and leave the Jan '24 180 call in place….  If it drops can sell this off at a smaller loss and pick up the June 180s, if if goes up, still have upside coverage…    Note the above position is a result of taking profits on larger spread f( 120 / caller )  and rolling up, the profit on that role is above the current loss that this spread is showing….    So would like your view on this….  or if you see something else on this. would also consider…  

    Thanks, 


  12. Apple working on subscription plan for iPhones, other hardware: report

    01:21 PM | Apple Inc. (AAPL) | By: Chris Ciaccia, SA News Editor

     

    Apple (NASDAQ:AAPL) is reportedly working on a subscription plan to make owning iPhones and other hardware, such as Macs, similar to paying a monthly app fee, Bloomberg reported, citing people familiar with the matter.

    Apple (AAPL) shares moved higher on back of the report, gaining nearly 1% to $171.75.

    Cupertino, California-based Apple did not immediately respond to a request for comment from Seeking Alpha.

    Making the iPhone or other hardware products more akin to a monthly fee may allow the Tim Cook-led company generate more revenue from the devices. It would also be a major shift away from its strategy where it sells its products for full price, though sometimes they can be purchased in installments via the Apple Card or via carrier subsidies, Bloomberg reported.

    Bloomberg added that it would differ from an installment plan in that it would not be split into 12 or 24 monthly payments, but rather a set monthly fee depending upon the device.

    Apple currently offers several subscription plans for its services, including Apple Music, Apple TV+ and iCloud+. 

    The tech giant also offers an all-in-one bundle, known as Apple One, that puts together all of its services for one monthly fee, at three different price points.

     

     


  13. Mar. 24, 2022 9:57 AM ET5 Comments

    Like most Fed officials, "I penciled in 7 rate hikes for this year," Minneapolis Federal Reserve President Neel Kashkari said Thursday during a speech at the Midwest Economic Outlook Summit. However, "if some imbalances are resolved, we may not need as many rate hikes."

    Despite Treasury bonds selling off, nominal yields are still changing hands near historical lows and "long-term yields suggest inflation expectations are anchored," Kashkari explained. Meanwhile, the 10-year breakeven inflation rate, a popular measure of implied inflation, is standing at its highest level going back to when data first got published in 2003, as seen in the chart below. Also, the 2s10s yield curve is close to inversion, standing at just 19 basis points Wednesday, implying that bond investors see slower economic growth and possibly recession risks amid ongoing demand/supply imbalances.

    Kashkari's remarks regarding the central bank's interest rate path come as the majority of Fed officials predict at least seven rate hikes in 2022. The Fed needs to remain cautious on its transition to tighter monetary policy as "there is a risk of overdoing it on rate hikes," especially after coming off the effective zero lower bound, Kashkari warned. On Wednesday, San Francisco Fed President Mary Daly said the Fed may need to push rates higher than 2.5% And the biggest hawk on the Federal Open Market Committee, St. Louis Fed President James Bullard, reiterated his call to get the policy rate to above 3% vs. the FOMC's median projection of 1.9% at the end of this year.

    With consumer price inflation at the highest level in 40 years, "I am surprised inflation is so high and stayed high," Kashkari highlighted. The consumer price index surged 7.9% Y/Y in February, which is well above the central bank's 2% inflation target.

    On Monday, Fed Chair Jerome Powell said the central bank will tighten rates to above neutral if needed.

    AAPL +1.15%Mar. 24, 2022 9:52 AM ET17 Comments

    Apple (NASDAQ:AAPL) said on Thursday that as part of its $4.7 billion in green bonds that it previously issued, it was buying its first group of carbon-free aluminum to reduce its carbon emissions.

    The metal will be used in its iPhone SE and is the first aluminum to be manufactured at industrial scale outside of a laboratory without creating emissions during smelting.

    “Apple is committed to leaving the planet better than we found it, and our Green Bonds are a key tool to drive our environmental efforts forward,” said Lisa Jackson, Apple’s vice president of Environment, Policy, and Social Initiatives, in a statement.

    “Our investments are advancing the breakthrough technologies needed to reduce the carbon footprint of the materials we use, even as we move to using only recyclable and renewable materials across our products to conserve the earth’s finite resources.”

    Apple (AAPL) shares were up nearly 1% to $171.82 in early trading on Thursday.

    The Cupertino, California-based Apple (AAPL) did not disclose the size or cost of the purchase, but noted it is helping support Apple to become carbon neutral across its supply chain by 2030.

    The green bonds, issued in 2019, are supporting 50 projects, including the aforementioned carbon-free aluminum, that will offset 2.8 million metric tons of carbon dioxide equivalent, install roughly 700 megawatts of renewable energy and promote more research and development for recycling.

    On Wednesday, Wedbush Securities analyst Dan Ives said Apple (AAPL) was seeing "stellar" iPhone 13 demand, while adding that the supply chain is also showing improvements.

    Mar. 24, 2022 9:47 AM ET1 Comment

    • March IHS Markit U.S. PMI Composite Index (Flash): 58.5 vs. 56 prior (revised: 55.9)
    • Manufacturing Index: 58.5 vs. 56.3 consensus vs. 57.5 prior (revised: 57.3)
    • Manufacturers and service providers recorded stronger upturns in activity amidst rising demand and easing of Cobid-19 restrictions.
    • New orders led the growth as a bounce in client demand strengthened for the second month peaking to 9-month high; new export orders rose at faster pace at the end of Q1.
    • Despite reports of greater output and easing supply chain woes, backlogs of work grew sharply in March.
    • Supplier price hikes led to faster rise in input costs; purchasing activity rose at fastest pace since September 2021.
    • Service Index: 58.9 vs. 56.0 consensus vs. 56.7 prior (revised: 56.5)
    • The rate of overall job creation was the sharpest since April 2021, as manufacturers and service providers alike recorded steeper upturns in employment.

    UBER +4.55%Mar. 24, 2022 9:21 AM ET5 Comments

    In a move that has the potential to be one of the most-symbolic in its history, Uber (NYSE:UBER) said it will soon begin listing all New York City taxis on its app as a ride-hailing option for its customers.

    The partnership marks a form of peace between the nation's largest, and most-famous taxi fleet, and the company that was set up to explicitly disrupt and change an industry that had operated virtually unchallenged for more than a century.

    According to a report from the Wall Street Journal, New York taxis that are regulated through city's Taxi and Limousine Commission will integrate their technological system with Uber's (UBER) so that riders will be able to hail taxi rides as well through the Uber (UBER) app. Uber (UBER) plans to make it so that passengers are charged approximately the same rates for taxi bookings as they are for rides through the Uber X ride-hailing option.

    Andrew Macdonald, Uber's (UBER) head of global mobility, told the Journal that the deal was "bigger and bolder than anything we've done."

    The partnership is scheduled to go into effect for New York's approximately 14,000 taxis later this spring.

    With regards to how drivers are to be paid, the Journal said that before accepting an Uber (UBER) ride, a driver will see on their app how much they can expect to earn from the fare, and will be able to turn down the ride if they so choose.

    The report sent Uber's (UBER) shares up by 4% Thursday, while Medallion Financial (MFIN), which finances taxi medallions for drivers in New York and elsewhere, edged up by less than 1%.

    Separately, Uber (UBER) said that its employees should expect to begin returning to company offices on April 25. The return-to-the-office edict initially involved Uber's (UBER) headquarters in San Francisco, and 35 other company locations in the United States.

    • $34 is $64Bn for Uber – that's a lot.  $27Bn in sales and a $1.3Bn loss is the projection and it will be a long, long time before they make $3Bn to justify $64Bn in cap so still no thanks – though deals like this may get them there one day.  14,000 cabs and let's say Uber nets $1 per ride 20 times a day per cab is 14,000 x $1 x 20 x 365 = $102M – better than nothing but not a magic bullet.  
    • I've only seen the first one but the Uber series (Super Pumped) on Paramount + (go PARA!) looked pretty good.  Meanwhile, for Star Trek Discovery and Picard alone I find that channel worth it.  

    AAPL/Batman – Your situation is a bit different because, in the LTP, our $120 calls are stupidly deep in the money – yours are not.  It looks like the Jan $140s are $40.50, so you are down but, of course, you only paid net $29 for the spread (but why did you pay net $29 for a $40 spread?).  $40.50 x 70 is $283,500 so I would take 120 JUNE 2024 $150 ($47)/$190 ($27.50) bull call spreads at $19.50 ($234,000) which puts $50,000(ish) back in your pocket and leaves you with $480,000 worth of spreads covering the 70 short $180s.

    You can also sell 20 of the June 2024 $140 puts for $14.50 ($29,000) since you already have 70 ($192,500) short calls to balance those and you can put a stop on 20 of the short calls at $30 ($60,000) and 20 more at $35 ($70,000) and that whole thing would put you about $50,000 out of pocket to move from the $280,000 spread you have now to the $480,000 spread that would be covered by just 30 short calls (with 18 months to roll) if you do have to spend that $50,000 – and that would only be because AAPL is heading over $190.  If AAPL is flat or goes lower, you don't spend your $50,000 and you make more money selling short calls.  


  14. AAPL +1.15%Mar. 24, 2022 9:15 AM ET10 Comments

    • Apple (NASDAQ:AAPL) is the recipient of some positive commentary from Wall Street, as investment firm Cowen raised its iPhone build estimates for the March quarter.
    • Analyst Krish Sankar, who has an outperform rating and a $180 price target, noted that builds in the first-quarter increased due to "healthy" iPhone SE demand. Second-quarter builds have remained steady, but there could be some softness to come given concerns in China's economy and the ongoing Russian invasion of Ukraine.
    • Sankar lowered his build estimate for the June 2022 quarter by 1 million to 48 million, which would be up 9% year-over-year.
    • "We believe there is scope for additional share gains in China this year," Sankar wrote. "We estimate iPhone sales into Russia are less than 5% of units."
    • Apple (AAPL) shares rose slightly more than 0.5% to $171.26 in premarket trading.
    • On Wednesday, Wedbush Securities analyst Dan Ives said Apple (AAPL) was seeing "stellar" iPhone 13 demand, while adding that the supply chain is also showing improvements.

    MRNA +0.27%Mar. 24, 2022 9:11 AM ET12 Comments

    • Moderna (NASDAQ:MRNA) shares are continuing to trade lower Thursday even after the company outlined its plans for regulatory authorizations for the use of its COVID-19 vaccine in kids.
    • Commenting on the development, Bank of America analysts led by Geoff Meacham attribute the weakness to the lack of upside the newly targeted population can bring to the company’s revenue outlook for 2022.
    • In addition, the analysts note that the likely transition of COVID-19 to an endemic status, and new vaccine entrants as well as oral antivirals “could create a headwind for core Spikevax franchise.”
    • According to them, the investors are eager to see how the company can diversify the core messenger RNA vaccine platform and advance its flu vaccine candidate and vaccine programs against respiratory syncytial virus and Cytomegalovirus.
    • However, the firm expects the company to transform its COVID-19 benefit into long-term opportunities.
    • BofA has a Neutral rating on Moderna (MRNA), with the price target of $180 per share, implying a premium of ~1% to the last close.
    • Read: Today, Moderna (MRNA) raised its commercial guidance for the COVID-19 vaccine.

    AA -1.83%Mar. 24, 2022 9:08 AM ET1 Comment

    Alcoa (NYSE:AA-2.5% pre-market after Morgan Stanley downgrades shares to Equal Weight from Overweight with a $100 price target after strongly outperforming peers and the S&P 500 in recent weeks.

    Alcoa has materially improved its balance sheet and shored up profitability, and it is well positioned to benefit from a constructive outlook for aluminum due to tightening global aluminum supply, but these positives already are baked in to the stock price, analyst Carlos De Alba says, seeing limited company specific catalysts in the near term.

    Morgan Stanley raises its medium-term aluminum price forecast due to impacts from the Russia-Ukraine war, with structurally higher power prices having a significant knock-on effect.

    Alcoa shares have run up to historic highs as the demand for aluminum has soared globally alongside a supply deficit.

    BTC-USD +4.27%Mar. 24, 2022 8:38 AM ET

    • Following the delay of its first bitcoin-backed bond issuance, El Salvador is turning to cryptocurrency exchange Binance for help on adopting Bitcoin (BTC-USD) as legal tender, Reuters reported Wednesday, citing Milena Mayorga, the Central American country's ambassador to the U.S.
    • Binance CEO Changpeng Zhao on Thursday is said to visit El Salvador and plans to meet Bitcoin (BTC-USD) activist President Nayib Bukele, Reuters noted, citing Mayorga's comments to reporters. Zhao's visit was a vote of confidence in Bukele's decision to adopt bitcoin as legal tender last year, in addition to its plan to issue bitcoin-backed bonds, Mayorga explained.
    • Meanwhile, bitcoin (BTC-USD +1.3%) is climbing to sub $43K in early morning trading Thursday, though still down 10% YTD.
    • Nearing the end of January, the International Monetary Fund urged El Salvador to strip bitcoin of legal tender status.

    WE +10.13%Mar. 24, 2022 8:34 AM ET2 Comments

    • WeWork (NYSE:WE) discloses that its CEO Sandeep Mathrani purchased 30K shares of common stock.
    • As per SEC filing, shares were purchased at $6.55 for total consideration of $196.5K.
    • Shares up 2% premarket.
    • A glance at company's ownership structure:

    Meanwhile, on a quick trip to reality:

    Mar. 24, 2022 8:31 AM ET5 Comments

    • February Durable Goods-2.2% vs. -0.5% expected and +1.6 % prior.
    • The decline in new orders followed four straight months of increases. Meanwhile shipments of manufactured durable goods slipped by $0.1B to $270.6B, after five consecutive monthly increases. Machinery, which fell after three straight months of growth, drove the decrease.
    • Core durable goods: -0.6% vs. +0.5% consensus and +0.8% prior (revised from +0.7%).
    • Durable goods, excluding defense: -2.7% vs. +0.1% consensus and +1.4% in January (revised from +1.6%).
    • Non-defense orders, excluding aircraft: -0.3% vs. +0.5% expected and +1.3% prior (revised from +0.9%).
    • Unfilled orders for manufactured durable goods rose for the 13th straight month by $5.3B, or 0.4%, to $1,288.4B.
    • On Monday, the Chicago Fed National Activity Index registered a drop in February


  15. Mar. 24, 2022 8:20 AM ET1 Comment

    As crypto assets and decentralized finance technologies develop and grow, they're likely to become more interwoven with the traditional finance sector, bringing a number of potential benefits such as lower transaction costs, but also posing risks to the U.K. financial system, the Bank of England said in a statement.

    The technology's development will require enhanced regulatory and law enforcement frameworks, both domestically and globally, the BOE said. The BOE's Financial Policy Committee judges that crypto economic functions should take place within the existing regulatory framework and that "the regulatory perimeter be adapted as necessary to ensure an equivalent regulatory outcome" to the traditional finance sector. In other words, the regulatory scope should be expanded.

    The bank points out that cryptoassets' value grew ~10-fold between early 2020 and November 2021, peaking at $2.9T. Since then, their market cap retreated to ~$1.7T in the first week of March 2022. That now represents ~0.4% of global financial assets.

    The FPC "continues to judge that direct risks to the stability of the U.K. financial system from cryptoassets and DeFi are currently limited, reflecting their limited size and interconnectedness with the wider financial system," the statement said.

    But as the technology grows, so could the risks. The FPC is monitoring "a number of channels" for potential risks to systemic financial institutions, to core financial markets, and to the ability to make payments as well as the impact on real economy balance sheets.

    The comments are in line with what many other central bankers have been saying about crypto. On Wednesday, Federal Reserve Chair Jerome Powell said the emergence of digital currencies and stablecoins "will require changes in existing laws and regulations."

    Checking in on cryptocurrency activity on Thursday morning, bitcoin (BTC-USD) is rising 1.4% in the past 24 hours to just under $43K, ether (ETH-USD) breaks above $3K, up 2.9%, and Cardano (ADA-USD) is surging 16%.

    On Wednesday, Cardano tokens outshone bitcoin, ether after inclusion in new Grayscale fund

    LOGI +6.55%Mar. 24, 2022 8:19 AM ET

    Logitech International (NASDAQ:LOGI) shares rose on Thursday after Bank of America initiated coverage on the electronics peripherals company, saying it sees 40% upside in the stock.

    Analyst Adam Angelov started Logitech with a buy rating and a $107 price target, noting that the company's management has a "strong track record of execution," its return on invested capital is at 34% and there are likely further market share gains to come.

    Logitech is also likely to capitalize on a "secular megatrend," where social media, gaming and video calling provide growth drivers for updated peripherals, with higher-priced products coming over time.

    "Logitech is trading at 9.5x FY24E [enterprise value/EBITDA] vs. its 10yr median of 14x and below its 10-year average trough multiple of 10.8x, suggesting to us that the market sees the COVID growth phase of FY21-22 as a one-off and fears a reset of expectations," Angelov wrote in a note to clients.

    Logitech (LOGI) shares rose nearly 4% to $74.60 in premarket trading on Thursday.

    In addition, Angelov noted that Logitech (LOGI) has a 5% free cash flow yield, in line with its 10-year median.

    Although Logitech (LOGI) has outperformed the STOXX Europe 600, the Swiss Market Index and the NASDAQ over the long term, it underperformed these three indices by 40% to 50% from June to November 2021, Angelov pointed out.

    "Given largely unchanged consensus revenue/EBITDA/EPS, we think that buy-side expectations could be below sell-side," the analyst wrote, adding that in-line results or confirming previous guidance "could be viewed as a positive catalyst for the stock."

    Earlier this month, Logitech International (LOGI) confirmed its 2022 outlook of 2% to 5% sales growth in constant currency, and $850 million to $900 million in non-GAAP operating income.

    Wow, when did they get so cheap?  LOGI is a good solid company that benefits from work at home and they are good for $750M in profits against a $12.4Bn market cap so, for the LTP – we can simply bet they don't go lower than $70 and do very well:

     

    • Sell 10 LOGI 2024 $70 puts for $9.50 ($9,500) 
    • Buy 20 LOGI 2024 $70 calls for $16.50 ($33,000) 
    • Sell 20 LOGI 2024 $85 calls for $10.00 ($20,000) 

    That's net $3,500 so your worst case is owning LOGI for net $73.50 and your best case is collecting $30,000 over $85 with a $26,500 (737%) profit.


  16. See, that's the great thing about adding hedges – we spent $100,000 yesterday to boost our hedges and now we find $100,000 worth of upside plays in case we didn't need the hedges.  If the market does pull back, we have $400,000 more to spend and here we've committed to $70,000 worth of stock.


  17. Comment content omitted because it is too long.


  18. BAC -0.27%Mar. 24, 2022 7:40 AM ET1 Comment

    • Ahead of its Investor Day scheduled today, Alaska Air (NYSE:ALK) revealed its long-term financial framework and provides FY22 outlook.
    • "Throughout our history, Alaska has consistently outperformed the industry, and we're well positioned to continue that trend, leveraging loyalty, alliances, network growth and our brand to unlock significant value and deliver $400M of incremental revenue as part of our 2025 strategic plan," CEO Ben Minicucci commented.
    • The airline plans to grow an average of 4-8% per year through 2025; it also plans to accelerate the transition of its fleet of 300+ aircraft to all-Boeing 737 for its mainline operations and all-Embraer E175 jets for regional, by 2023 end.
    • The company is also growing cargo business operations by converting two passenger 737-800s to freighters, bringing the total freighter fleet to five.
    • FY22 Outlook:

    • Alaska Air and Bank of America (NYSE:BAC) announced an extension of their co-branded credit card agreement through 2030.
    • Alaska Airlines' co-branded credit card with Bank of America currently offers cardholders the airline industry's most generous loyalty rewards program.
    • In 2H22, Alaska and Bank of America plan to announce additional benefits to further elevate its loyalty program for cardholders, while driving long-term value for both companies.

    ALK Short Put 2024 19-JAN 40.00 PUT [ALK @ $55.73 $1.61] -5 12/30/2021 (666) $-2,500 $5.00 $-1.20 $-5.00     $3.80 $-0.30 $600 24.0% $-1,900
    NEXT +20.29%Mar. 24, 2022 7:35 AM ET1 Comment

    NextDecade (NASDAQ:NEXT+1.9% pre-market after saying it reached a binding agreement to supply liquefied natural gas to Guangdong Energy Group Natural Gas for 20 years from the Rio Grande LNG export project in Brownsville, Texas.

    Under the heads of agreement, Guangdong Energy will purchase as much as 1.5M metric tons/year of LNG indexed to Henry Hub; the supply initially will come from Rio Grande LNG Train 1, which is expected to start commercial operations in 2026.

    Assuming further LNG contracting and financing, NextDecade says it expects to make a positive final investment decision on a minimum of two trains at Rio Grande LNG in this year's H2.

    NextDecade, which previously signed a long-term contract with Shell covering 2M mt/year, is seeking sufficient supply deals to support Rio Grande's estimated $15.7B cost of construction.

    NextDecade has said it expects Rio Grande LNG will be "the greenest LNG project in the world."

    MRNA -0.36%Mar. 24, 2022 7:33 AM ET9 Comments

    • Moderna (NASDAQ:MRNA) is trading higher in the pre-market Thursday after increasing the financial guidance for the company’s blockbuster COVID-19 vaccine, branded as Spikevax.
    • Ahead of its 3rd Annual Vaccines Day today, the company said that it has signed nearly $21 billion worth of Advance Purchase Agreements for Spikevax sales in 2022. Last month, the value of Advance Purchase Agreements stood at about $19 billion.
    • The value of options (probability-weighted) has approached ~$0.5 billion. Already, the U.K., Canada, Taiwan, Kuwait, and Switzerland have inked purchase agreements with Moderna (MRNA) for 2023.
    • Additional countries, including the U.S., are in negotiations with the company for more vaccine orders in 2022 and 2023, the company said.
    • The improved outlook for the company’s only commercialized product comes at a time Moderna (MRNA) shares are trading more than 60% lower than its recent peak in August, as shown in this graph.

    I don't get it.  It's like these traders are in an alternate universe.

    PhilStockWorld March Portfolio Review – Part 2 (Members Only)

    • MRNA – Like BNTX, suddenly unloved for no good reason.  We already did our rolls and bought back the short calls, so I just love this spread as it is.  We are certainly not worried about owning 500 shares at net $175 or 1,000 shares at net $140, so the short puts don't matter and we have 20 long $150 calls on a stock that was $450 6 months ago.  At $300 we'll get $300,000 against what is currently a net $33,437 spread if all goes well.
    MRNA Short Put 2024 19-JAN 200.00 PUT [MRNA @ $178.61 $-0.12] -5 10/5/2021 (666) $-12,500 $25.00 $40.83 $-73.00     $65.83 $0.28 $-20,413 -163.3% $-32,913
    MRNA Short Put 2024 19-JAN 180.00 PUT [MRNA @ $178.61 $-0.12] -10 1/13/2022 (666) $-40,150 $40.15 $12.75     $52.90 $0.50 $-12,750 -31.8% $-52,900
    MRNA Long Call 2024 19-JAN 150.00 CALL [MRNA @ $178.61 $-0.12] 20 1/21/2022 (666) $120,000 $60.00 $9.50     $69.50 $-4.51 $19,000 15.8% $139,000

    But no one doubts PFE is a money machine with a great pipeline:

    PFE +0.45%Mar. 24, 2022 7:16 AM ET3 Comments

    • Pfizer (NYSE:PFE) announced on Thursday that the U.S. Food and Drug Administration (FDA) awarded the agency’s Breakthrough Therapy Designation for PF-06928316 (RSVpreF), a vaccine candidate targeted at respiratory syncytial virus (RSV).
    • The designation covers PF-06928316 for the prevention of lower respiratory tract disease caused by RSV in those aged 60 years and older.
    • The decision was mainly based on the results from a proof-of-concept, Phase 2a study, which was designed to evaluate a single dose of the vaccine at 120µg in healthy adults 18 to 50 years of age, the company said.
    • FDA’s Breakthrough Therapy designation is aimed at speeding up the development and review of treatments targeted at serious or life-threatening conditions.
    • Currently, there are no therapeutic or prophylactic options available for older adults with RSV disease, which is estimated to cause 177,000 hospitalizations and 14,000 deaths in the U.S. each year.
    • In September, Pfizer (PFE) announced the start of a late-stage trial to evaluate the RSV vaccine candidate with the participation of about 30,000 subjects.


  19. AAL +2.84%Mar. 24, 2022 5:04 AM ET80 Comments

    As more states continue to turn the page on COVID – from pandemic to endemic – the masks are coming off and many testing sites are shutting down. Most requirements are now rolled back, except for masking in airports and on public transportation, where federal mandates are binding for another month. Meanwhile, new COVID-19 infections in the U.S. are now at their lowest level since last July – despite an uptick in the BA.2 subvariant – and over 99% of Americans are living in "low" or "medium" risk areas.

    Masks on a Plane: The largest U.S. airlines are urging the Biden administration to drop the federal mask mandate on jetliners, along with the pre-departure testing requirement for international travelers. Earlier this month, the CDC for the third time extended its mass transit mask mandate by 30 days, until mid-April, and masking guidelines for airlines remain in place. The federal mandate applies across airports and trains, as well as buses and car share services.

    "Much has changed since these measures were imposed and they no longer make sense in the current public health context. Given that we have entered a different phase of dealing with this virus, we strongly support your view that 'COVID-19 need no longer control our lives,'" wrote CEOs of American Airlines (NASDAQ:AAL), Alaska Air (ALK), Atlas Air (AAWW), Delta (NYSE:DAL), FedEx (NYSE:FDX), Hawaiian Holdings (HA), JetBlue (JBLU), Southwest (LUV), United (NASDAQ:UAL) and UPS (UPS).

    More from the letter: "It is critical to recognize that the burden of enforcing both the mask and predeparture testing requirements has fallen on our employees for two years now. This is not a function they are trained to perform and subjects them to daily challenges by frustrated customers. This in turn takes a toll on their own well-being. We are requesting this action not only for the benefit of the traveling public, but also for the thousands of airline employees charged with enforcing a patchwork of now-outdated regulations implemented in response to COVID-19."

    Mar. 24, 2022 4:22 AM ET60 Comments

    The energy war between Russia and the West is heating up after President Vladimir Putin demanded that natural gas sold to "unfriendly" countries be paid for in rubles. The Russian currency gained 7% against the dollar immediately after the announcement, paring its year-to-date losses to 23%, while Dutch gas futures, a European benchmark, reigniting a wild rally. "Unfriendly" nations accounted for 70%, or around $69B, of Gazprom's (OTCPK:GZPFY) export revenue in 2021, according to Dmitry Polevoy, economist at Moscow-based Locko Invest.

    Fine print: Supply contracts will likely need to be reworded to allow a switch in payment to rubles, but once those are reopened, all types of negotiations could take place (shorter-terms, less volumes, etc.). Supply deals often have provisions, like "significant market price changes," that can trigger renegotiations, but changing clauses of these agreements is often arduous and time-consuming. Putin has given the Russian central bank one week to come up with a way to shift to the new payment system and Gazprom was ordered to revise its contracts to accommodate the move.

    While it's possible for Russia to devise new contracts that require ruble payments, it would demand that Western governments hold rubles in their central banks or buy them on the open market, which would be seen as skirting financial sanctions. Both sides would lose if the gas stops flowing, with Putin missing out on cash for his flailing domestic economy and the West needing to secure pricier supplies elsewhere. Putin may also be trying to chip away at dollar dominance in global trade, which could have long-term implications for American borrowing and financing costs.

    The response: Ukraine President Volodymyr Zelenskyy is hoping that a series of NATO, G7 and EU summits taking place this week will lead to more aid for the country and additional sanctions against Russia. The U.S. and EU are already close to a deal aimed at slashing Europe's dependence on Russian energy sources and an agreement could be announced as early as Friday. "You can expect that the U.S. will look for ways to increase LNG supplies, surge LNG supplies to Europe, not just over the course of years, but over the course of months as well," said National Security Advisor Jake Sullivan.

    Mar. 24, 2022 12:01 AM ET

    • The U.S. mortgage delinquency rate in February rose for the first time in nine months in a backdrop of tighter financial conditions, according to Black Knight's First Look.
    • The delinquency rate, consisting of loans 30+ days past due, ticked higher by 1.76% M/M in February to 3.36%, though it remains near pre-pandemic levels heading into March, a month known for strong seasonal performance improvements, Black Knight explained.
    • February's increase in the delinquency rate was primarily driven by a 97K rise in early-stage delinquencies, of which are still well below pre-pandemic levels, Black Knight noted.
    • The number of properties that are 30+ days past due, but not in foreclosure edged higher by 25K to 1.78M. On the other hand, the number of properties that are 90+ days past due fell by 72K to 787K.
    • Following January's 7X spike, foreclosure starts pulled back 24%. At the same time, despite a 39K rise in active foreclosures, they're still 32% below the same year-ago period.
    • With mortgage rates creeping up, prepayment activity in February fell 11%, hitting a nearly three-year low, according to Black Knight.
    • On Wednesday, new home sales fell more than expected in February.

    KBH -5.32%Mar. 23, 2022 4:33 PM ET13 Comments

    KB Home (NYSE:KBH) stock is dropping 4.3% in after-hours trading after the homebuilder's Q1 earnings and revenue missed consensus estimates even as housing prices climbed.

    Looking ahead, the company increased the average price it expects to get for each home it sells and slightly raised guidance for housing gross profit margin this year, but kept its housing revenue forecast unchanged.

    The company now expects an average selling price of $490K-$500K in FY2022 vs. its previous guidance of $480K-$490K. Housing revenue guidance remains at $7.20B-$7.60B; and housing gross profit margin guidance nudged slightly higher to 25.5%-26.3% vs. prior range of 25.4%-26.2%.

    Earnings and revenue for the quarter, though, disappointed. EPS for the quarter ended Feb. 28, 2022 was $1.47, trailing the consensus estimate of $1.54 and down from $1.91 in the previous quarter, but up from $1.02 in the year-ago quarter.

    Q1 revenue of $1.40B missed the $1.49B consensus, fell from $1.68B in Q4 and increased from $1.14B in the year-ago quarter.

    KB Home (KBH) stock dipped 2.6% in after-hours trading.

    Q1 average selling price of $486.1K rose from $451.1K in the previous quarter. The company delivered 2,868 homes in the quarter, down from 3,679 in Q4 and 2,864 in Q1 2021.

    Ending backlog of $5.71B, rose from $4.95B at the end of Q4.

    Homebuilding operating income of $169.6M vs. $214.4M in Q4; it increased 49% Y/Y.

    Adjusted housing gross profit margin fell to 21.1% from 24.8% in Q4 but rose 130 basis points from a year ago.

    Selling, general and administrative expenses as a percentage of housing revenue was 10.2% vs. 9.8% in Q4.

    Conference call at 5:00 PM ET.

    Earlier, KB Home (KBH) GAAP EPS of $1.47 misses by $0.07, revenue of $1.4B misses by $90M

    We have to watch out for PHM – it's in the LTP:

    PHM Long Call 2023 20-JAN 40.00 CALL [PHM @ $44.36 $-0.29] 20 4/15/2021 (302) $35,900 $17.95 $-9.40 $17.95     $8.55 - $-18,800 -52.4% $17,100
    PHM Short Call 2023 20-JAN 55.00 CALL [PHM @ $44.36 $-0.29] -20 4/15/2021 (302) $-19,140 $9.57 $-6.92     $2.65 - $13,840 72.3% $-5,300
    PHM Short Put 2023 20-JAN 40.00 PUT [PHM @ $44.36 $-0.29] -10 4/15/2021 (302) $-4,500 $4.50 $-0.25     $4.25 - $250 5.6% $-4,250

    Homebuilder PulteGroup: If A 15-20% Annual ROI Is OK For You, Buy This Stock

    Pulte Is An Anti-Bubble Hyper-Growth Blue-Chip That's Too Cheap To Ignore

    $44 is $11Bn and PHM made $1.4Bn in 2020 and $1.9Bn last year and those were both off years.  They should make about $2.5Bn so I guess, if they go lower – we're more likely to buy more than cut the position.  As it stands, it's cheaper than our entry at net $7,550 on a $30,000 spread that's $8,000 in the money – so great for a new trade.

     

     

     


  20. Phil / AAPL – The original spread I had was  '24 120 / 180 that I rolled up to   I closed out the 120 s  at at 61 original cost 35 … but the 180 was sold a lot earlier ….    


  21. AAPL/Batman – That's great then, winnings already off the table – good job!