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End of March (and Quarter) Madness

KEEP CALM AND CLOSE THE QUARTER - Keep Calm and Posters Generator, Maker  For Free - KeepCalmAndPosters.comAnd already Q1 comes to a close.

We've had War, we've had Rising Interest Rates, we've had Inflation, we've had new strains of Covid. we've had a Yield Curve Inversion…  If this were a history book you'd say: "Oh yes, that was obviously the start of the Great Depression – how could they have not seen it coming?"  But it isn't so obvious when you are in the middle (or beginning) of it, is it?  I suppose while you are being eaten by a shark you rationalize that you'll be able to get along without the leg and then you start thinking about how you can get a replacement arm… assuming you're an optimistic sort.  

Optimistic sorts are what the market is full of these days – the pessimists are long gone so now you have filtered in just the optimists, all bidding against each other to see who can overpay the most for stocks while ignoring the macro environment completely.   

At the moment, we are using hedges to repel the sharks but shark repellent doesn't work if the can is empty so we tend to go over our hedges A LOT in turbulent times.  We did an STP review in last Wednesday's PSW Report ("Which Way Wednesday – Trouble at 4,500 for the S&P 500)" and this morning the S&P is at 4,596 – up almost 100 points (2.2%) for the week and our Long-Term Portfolio is at $2,606,583 – which is up $27,015 since last Wednesday and we'll see how much of that we want to use to add more protection in our Hedges in the Short-Term Portfolio:

  • Short Puts – W is a bit of a worry but our net is $126.55 and the stock is at $121.47 so almost all of the loss is premium – so our best bet is to let that burn off.
  • CVX – That was easy.  It was trading stupidly high.  This is a $45,000 spread at net $31,875 so $13,125 downside protection if CVX stays below $170.  

 

  • DIA – We bought back some short puts and it's generally a $150,000 spread currently at net $51,587 but we'll certainly sell some short calls to lower the basis and it's only 2/3 covered so it's over $100,000 worth of protection.  Note DIA is not an ultra but a 10% drop in DIA would take us to $315 and 100% in the money.  

  • TQQQ – These are leftovers from a hedge we cashed in.  The 2024 $70s will keep their value longer so we're just letting the Jan $75 puts burn out for now.

  • SQQQ – The short calls are just to make a little income but that little income was $12,754 we sold in Jan and we're already up $7,854, which is very nice as it's a net $96,375 with the potential to be $525,000 so a good $430,000 of downside protection as we're sure to sell more short calls and lower the basis further.  

  • TZA #1A -  We have the $200,000 Jan $20/40 spread at net $55,250 and it's halfway in the money so good for another $95,000 of potential protection.  
  • TZA #1B – We have another $200,000 2024 $40/60 spread at net $20,500 so these have $180,000 worth of protection.  In reality, though, we have this spread in order to cash out the Jan $20 calls if they reach $200,000 ($20) as this spread would then be covering the remaining short Jan $40 calls (assuming we believe TZA is done going down, of course).  So we're pre-planning our exit strategy well in advance.  Should we end up doing that – it's very likely we would buy another set of 2024 or maybe 2025 hedges as well.  Considering how cheap this protection is – it's a great strategy to play it.  We call this "Leap Frogging" the options.  
  • TZA #2 – We rolled 1/2 of the 2024 $30s to the $25s because it was cheap to do – so it didn't make sense not to.  Now we are less than 1/2 cash but it's still our best use of money since we are buying $100,000 worth of position for $30,000 – so let's roll the rest of the $30s to the $25s.  That will leave us with an $800,000 spread at net $104,750 so there's $695,250 of downside protection.  Ah, but we forgot about the 50 2024 $40 calls at $10.25 ($51,250) – let's roll 25 of them ($25,625) to 50 July $40 calls at $3 ($15,000) and that will cost us $10,625 but it's a drop in the bucket as we keep whittling away at those old covers (from our original spread where we cashed in the longs).  

We spent a bit more than planned but it was a housekeeping expense and we added $70,000 more protection, bringing us up to $1,513,375 worth of protection in our STP to help hedge all those long positions – JUST IN CASE – reality, like that shark fin – ever rears it's ugly head while we're out for a swim.

 


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  1. Good Morning.




  2. Two Covid Problems




  3. Good morning!

    Weak start and that's very bad as it's a window-dressing day and we should be getting a pop.

    Congrats to all who played oil but we we're done with that now and moving on.

    /NG just moving up  and up, however:

       

     

  4. Good morning, Phil,

    I have 10 of the 2023 45/55 WBA spreads. I wanted to make it a butterfly but am not sure if now is a good time. You have the 2024 40/55 spreads and just bought back your April calls. Maybe now is a good time to roll to 2024 and add some more?

    Thanks


  5. Breakaway Georgian Region Seeks to Be Putin’s Next Annexation

    Crypto-Bridge Hacks Reach Over $1 Billion in Little Over a Year

    Bird Flu Is Spreading in the U.S., Threatening Chicken Exports

    Office buildings sit more than half empty. Why the next recession could spur more trouble.

    Watch: DeSantis Accuses Disney Of "Sexualizing Kindergarteners"

    "Sounding The Alarm": A $3 Trillion Problem Emerges As The Fed Prepares To Launch QT

    The Global Rush To Own Gold Has Only Just Begun

    • War in Ukraine: what explains the calm in global stock markets? Amid surprise that the financial system has not been dealt a more severe blow there are warnings of systemic risks still to be uncovered. (Financial Times)

    • The Worst Part of Working From Home Is Now Haunting Reopened Offices. Hybrid schedules are supposed to provide the best of both worlds: all the benefits of working from home (no commute, more focus, hanging out with the dog, whatever it may be) plus the benefit of in-person collaboration with colleagues. The problem is … much of the time, it isn’t happening that way.(Slate)

    • America’s inflation problem is weirdly hard to fix America’s inflation problem, explained to the extent it is possible.(Vox)

    • More Private Jets Take to the Skies, Creating Gridlock on the Ground Developers are rapidly expanding hangar space at airports across the country to keep up with a growing demand for places to park private planes. (New York Times)

    • Inside the Fight Over the Future of New York City’s Outdoor Dining: Outdoor dining has been a lifeline for NYC’s restaurant industry during the pandemic. Soon, it’s going to look different. (CityLab)

    • Allocators Are Investing Like a Recession Is on the Way – Despite the Fed’s Promise of a Soft Landing Investors including the Hawaii Employees’ Retirement System are searching out potential safe havens, such as real assets, distressed debt, and floating rate securities. (Institutional Investor)

    WBA/Eca – They were doing so well for a moment.  I'd roll the 10 Jan $45s, now $4,10 ($4,100) to 15 of the 2024 $40s at $8.50 ($12,750) and you could help pay for it by selling 5 June $45 calls for $1.85 ($925) and 5 June $45 puts for $2.70 ($1,350).  You are spending net $6,375 for 15 calls that are $6,000+ in the money and now you're in a position to to use about 600 days you have left to bring back the rest of the $6,375 over time.



  6. Biden Orders Record Oil Release From U.S. Reserve to Tame Prices



  7. Did some one just say WBA great stock of the century?


  8. Yodi – There are still a few years left in this century…. 


  9. 1020 Like dead men wolking


  10. WBA/Yodi – I liked them more before they decided to divest Boots.  

    • Walgreens Boots press release (NASDAQ:WBA): FQ2 Non-GAAP EPS of $1.59 beats by $0.19.
    • Revenue of $33.76B (+3.0% Y/Y) beats by $430M.
    • Shares +0.6% PM.
    • The company is maintaining FY adjusted EPS guidance of low-single digit growth vs. consensus growth of -5.37%.
    • Walgreens Boots Alliance (NASDAQ:WBA) is trading lower in the pre-market Thursday despite better than expected revenue and earnings posted by the pharmacy retail chain with its 2Q FY22 financials.

      The growth in sales from continuing operations slowed to ~3% YoY compared to ~8% YoY rise in 1Q FY22, and ~13% YoY growth in 4Q FY21.

      During the quarter, Walgreens Boots (WBA) had administered over 11.8M COVID-19 vaccinations and performed 6.6M COVID-19 tests, indicating slowdown in pandemic-related benefits in 1Q FY22 when vaccinations and COVID-19 tests stood at 15.6M and 6.5M, respectively.

      Despite the seventh consecutive quarterly beat, non-GAAP EPS exceeded expectations by only $0.19 compared to $0.34 in the prior quarter. EPS from continuing operations dropped to $1.02 from $1.06 in 2Q FY21.

      The biggest revenue generator, U.S., reported ~15% growth in retail comparable while Boots UK retail comparable sales climbed ~22%.

      For fiscal 2022, Walgreens (WBA) maintained its adjusted EPS guidance of low-single digit growth

      "Second quarter results demonstrated broad-based execution, driving strong comparable sales and robust earnings growth,” Chief Executive Rosalind Brewer noted ahead of the conference call scheduled for Thursday at 8:30 a.m. EST.

      “The strategic review of our Boots business is progressing, and our transformational actions are accelerating sustainable value creation," she added.

      Read: Last week, Sky News reported that Apollo Global was in talks with several banks to help finance a £6B bid for Walgreens U.K. Boots chain.

    • Now Read: Will Walgreens Boots Alliance Q2 Earnings push the stock price higher amid positive outlook?

  11. That's $1.59 per $45 share in a quarter!  

    Expectations are that this $41Bn company will make $4.3Bn this year with Q1 15% ahead of those projections so far.

    Keep hating on them if you like but I do like companies that actually return good profits on my money.


  12. Sometime one is in love with a frog


  13. This is fun:

    SLI +6.86%Mar. 31, 2022 12:30 PM ET1 Comment

    Lithium producers extend gains after the Biden administration officially said Thursday it will use the Defense Production Act to boost domestic production of critical materials for batteries needed to power electric vehicles and the transition to renewable energy.

    The decision adds lithium, nickel, cobalt, graphite and manganese to a list of covered items, which could help mining companies access $750M under the Act's Title III fund.

    Among potentially relevant tickers: NYSE:SLI +6.6%NYSE:LAC +4.4%NYSE:MP +3.3%ALB +1.6%LTHM +1.4%PLL -0.2%.

    However, the Defense Production Act does nothing to streamline the permitting process that sees 7-10 years to get a mine up and running in the U.S., compared to 2-3 years in Canada, according to the U.S. National Mining Association.

    The White House Thursday also unveiled plans to release 1M bbl/day of strategic crude oil reserves over the next six months.

    XLE +0.50%Mar. 31, 2022 11:34 AM ET87 Comments

    A statement from the White House Thursday detailed plans to release 1mb/d of strategic crude oil reserves, in cooperation with allies, for the coming six months. The statement indicated that Russian oil supplies have been curtailed, but provided few details on the quantum of the supply impact. The White House did note that the bi-partisan ban on Russian oil has limited US imports. Year-to-date, Russian oil imports have averaged ~59kb/d, versus US oil consumption of ~21mb/d. The statement made no mention of ongoing Iran negotiations.

    The statement indicated that "there is nothing standing in the way of domestic oil production." The President expects US oil production to grow by 1mb/d in 2022, in line with Citi's prior estimates, and $60 Brent oil price forecast for year-end 2022.

    The statement referred to the 9,000 undrilled leases on federal lands currently being "hoarded" by industry, though failed to mention the 23,803 federal leases which are producing. A fact that has led some to speculate that the 9,000 unused leases are in fact unproductive, and not simply being hoarded in an attempt to corner the oil market. The President's statement called on Congress to make companies pay fees on public lands "that they are hoarding without producing."

    Energy stocks are trading higher on the news (XLE), with Occidental (OXY) up ~2.5%, and Exxon (XOM) up ~1.0%. Despite oil prices (CL1:COM) for May delivery falling ~4%, oil prices for delivery in the second half of 2022 are largely unchanged on the day. Suggesting oil markets (USO), and equity investors are looking at Thursday's announcement as a temporary fix to a structural supply problem.

    KNDI -7.74%Mar. 31, 2022 11:49 AM ET1 Comment

    Chinese electric vehicle stocks traded lower in midday action on Thursday with targeted COVID restrictions in China still a major concern.

    Nio (NIO -4.1%), XPeng (NYSE:XPEV -3.3%), Li Auto (NASDAQ:LI -4.6%) and Kandi Technologies (NASDAQ:KNDI -5.4%) all fell.

    Production updates: XPeng (XPEV) President Brian Gu said the shutdowns are having a direct impact on the number of cars the automaker can deliver to customers. Toyota Motor (TM) and Volkswagen (OTCPK:VLKAF) have suspended production at four plants in Changchun, while Tesla's (TSLA) suspension at the Gigafactory in Shanghai started Monday amid a broad phased lockdown in the region. The break in Tesla production is expected to run through at least Friday. General Motors (GM) has production running in its joint venture in Shanghai, but only by implementing a closed-loop process with employees working, living and sleeping in isolation facilities.

    Elsewhere in China EV news, BMW (OTCPK:BMWYY) has developed its first fully electric 3 series vehicle for the market. The BMW i3 eDrive35L model that is based on the automaker's line of compact cars will enter the Chinese market in May. The EV has a range of 327 miles when fully charged. Also of note, Nio (NIO) started deliveries of the ET7 sedan this week.

    DIS -1.35%Mar. 31, 2022 12:28 PM ET

    Citi's review of Walt Disney's (DIS -1.6%) Parks investor day echoed the bullish reactions coming from analysts about a bounceback in the company's resorts, with an eye to a still-improving attendance rebound and tech enhancements.

    Revenue in Disney's Parks, Experiences and Products division in the first quarter exceeded Q1 2019 by 6%, and EBIT exceeded that 2019 period by 14%, but management pointed out that's still affected by pandemic headwinds, analyst Jason Bazinet notes.

    Those include international visitors that are slow to return to the resorts; hotel utilization rates that are still below pre-COVID levels; and several parks that are closed (including Hong Kong Disneyland and Disney Shanghai).

    The company took advantage of the slowdown by launching expansion projects as well, including several upgrades for Disneyland Paris, a Frozen-themed land in Hong Kong, and a Zootopia land in Shanghai; and its newest cruise ship, Disney Wish, is set to make its first voyage in July.

    Management also highlighted technology enhancements, including MagicBand+ technology that takes advantage of haptic vibrations and gesture recognition.

    That feeds a theme of more immersive experiences: Disney is partnering with DMB Development on communities called Storyliving by Disney, starting with Cotino near Palm Springs. And Disney's Star Wars-themed Galactic Starcruiser two-day guest experience opened this month and is fully booked through the end of June.

    Amid praise for the Parks unit, Bazinet noted investors are still nervous about "net add cadence" in the company's media business. He has a Buy rating and $200 price target on Disney stock, implying 44% upside.

    Earlier, analysts largely responded with positivity to the parks update, pointing to the outperformance even against existing hurdles.

    UNG +3.84%Mar. 31, 2022 12:07 PM ET

    The United States Natural Gas (NYSEARCA:UNG) exchange traded fund has surged 61% in 2022’s 61 trading days. With Russia's invasion of Ukraine putting natural gas at the forefront of international concerns, the market segment outpaced all other ETF themes.

    As such, UNG is not the only natural gas ETF that has taken off in 2022. Other funds include the leveraged VelocityShares 3x Long Natural Gas ETN (UGAZF), ProShares Ultra Bloomberg Natural Gas (NYSEARCA:BOIL), and the United States 12 Month Natural Gas Fund, LP (NYSEARCA:UNL).

    MSFT -0.91%Mar. 31, 2022 12:00 PM ET14 Comments

    • Four U.S. senators are pressing the Federal Trade Commission to give a hard review to Microsoft's (MSFT -0.5%) proposed near-$75 billion acquisition of Activision Blizzard (ATVI +0.4%), citing the videogame maker's issues with employee misconduct.
    • Sens. Elizabeth Warren, Bernie Sanders, Cory Booker and Sheldon Whitehouse say "We are deeply concerned about consolidation in the tech industry and its impact on workers" in a letter to FTC Chairwoman Lina Khan.
    • They'd like a review to assess whether the deal could exacerbate the allegations of sexual abuse, harassment and retaliation that have become prevalent as Activision Blizzard faces federal and state probes over misconduct.
    • They also note the deal's terms would let embattled Activision CEO Bobby Kotick continue in his role until an expected 2023 closing and receive a potentially large exit package.
    • For months, expectations around the blockbuster deal have been that Kotick would leave after it was closed.
    • The FTC last week extended its probe with a second request for information from the two companies.

    It's tricky to invest in a World so full of Government edicts changing the rules of the game from moment to moment…


  14. Comment content omitted because it is too long.


  15. Consumer slowdown?

    BBY -3.90%Mar. 31, 2022 10:55 AM ET3 Comments

    Best Buy (BBY -4.0%) traded lower early on Thursday after a weak read of current foot traffic trends was digested by investors.

    Data from location tracking firm SafeGraph data showed Best Buy's (NYSE:BBY) store traffic fell 7% year-over-year for the week that ended on March 26 to worsen from the 0.4% year-over-year drop in the week prior.

    Best Buy (BBY) is being watched more closely than normal by analysts for any signs of consumer discretionary spending slowdowns in Q1.

    Shares of Best Buy (BBY) have trailed the returns of the S&P 500 Index and broad retail ETFs this year so far.

    DELL -5.56%Mar. 31, 2022 10:11 AM ET9 Comments

    Dell Technologies (NYSE:DELL) and HP (NYSE:HPQ) dove in early trading on Thursday after Morgan Stanley downgraded both stocks and cut their price targets, citing a cut to the firm's forecast for PC sales.

    Analyst Erik Woodring lowered his rating on Dell to equal weight from overweight and cut HP to underweight from equal weight, noting that data collected over the past couple of months has shown that have resulted in the firm getting "incrementally more cautious" on the IT hardware outlook for the rest of the year.

    "We see increasing risk of negative hardware budget revisions, Hardware earnings revisions peaking, and the potential for further multiple compression, which historically has resulted in IT Hardware underperformance," Woodring wrote in a note to clients.

    Woodring also cut his price targets on the stocks, lowering Dell to $60 from $66 and HP to $31 from $34.

    The analyst added that PC and consumer hardware spending could be pressured as supply improves and demand starts to normalize after two years of "above-trend growth" as a result of the pandemic and expects PC sales to decline 6% year-over-year, versus a prior outlook of 4% growth.

    Dell (DELL) shares fell 7% to $50.51, while HP (HPQ) shares fell almost 7.5% to $36.02 in early trading.

    Year-to-date, Dell shares have fallen nearly 4.5%, while HP has gained slightly more than 2%.

    Woodring noted that while enterprise IT hardware spending has shown "greater durability" in 2022 than expected, the Russian invasion of Ukraine, rising COVID cases in China, inflation and concerns about a recession could hurt IT budgets.

    Earlier this month, Evercore upgraded Dell Technologies (DELL) to outperform, citing several factors, including the company's "very conservative" forecast for its 2023 fiscal year.

    AER -1.26%Mar. 31, 2022 10:34 AM ET11 Comments

    • S&P Global is expecting losses in the specialty insurance market of $16B-35B due to Russia's invasion of Ukraine, Reuters reported Thursday, citing a report.
    • Specifically, aviation insurance losses could reach $6B-15B, with other specialty lines such as cyber, political risk and marine war insurance likely to be affected as well, Reuters noted, citing the ratings agency.
    • "We believe it may take many years to settle the ultimate losses incurred by aircraft leasing companies, insurers, and reinsurers," S&P Global highlighted. Furthermore, the top 21 global reinsurers rated by S&P Global will likely suffer around half of the total losses. This comes in addition to large natural catastrophe losses already incurred this year.
    • For company-specific news, aircraft lessor AerCap (AER) on Thursday submitted a $3.5B insurance claim for 100+ jets stuck in Russia.
    • Property and casualty insurers: American International Group (AIG), Trisura (OTCPK:TRRSF), Travelers Companies (TRV), Chubb (CB), Allstate (ALL), Hartford Financial (HIG) and Aon (AON).
    • Take a look at the latest updates regarding the Russia-Ukraine war here.
    • LNG -0.33%Mar. 31, 2022 9:41 AM ET164 Comments

      • Thursday Morning it was reported that Putin will require payment for Russian gas in rubles, and that gas exports will be halted if ruble payments are not made.
      • The Russian President has reportedly signed the order and the new gas trading rules will become effective April 1st; special ruble accounts are to be opened with Gazprombank.
      • European natural gas prices spiked ~10% as headlines hit; however, few additional details are known.
      • The update follows reports Wednesday that Russia and European customers were set to agree to terms for USD or Euro payments; any halt to Russian gas flows would provide a tailwind for gas exporters to Europe like Cheniere (LNG), and Shell (SHEL), as well as domestic producers like Equinor (EQNR), Vermillion (VET) and NRT (NRT).

    REM +0.06%Mar. 31, 2022 10:18 AM ET11 Comments

    • Led by rapidly rising inflation as well as the prospect of strong demand for goods and ongoing supply disruptions, 30-year fixed-rate mortgage averaged 4.67% with an average 0.8 point for the week ending Mar. 31, 2022, up from last week when it averaged 4.42%; higher than 3.18% a year ago, according to the Freddie Mac Primary Mortgage Survey.
    • This marks the highest reading since December 2018 levels and has unfolded to these levels faster than expected.
    • "Purchase demand has weakened modestly but has continued to outpace expectations. This is largely due to unmet demand from first-time homebuyers as well as a select few who had been waiting for rates to hit a cyclical low," Chief Economist Sam Khater commented.
    • On Wednesday, Federal Reserve's Thomas Barkin stated that he is open to hiking the central bank's policy rate by 50 basis points in May.
    • 15-year fixed-rate mortgage averaged 3.83% with an average 0.8 point, up from last week when it averaged 3.63% and a year ago at this time, the 15-year FRM averaged 2.45%.
    • 5-year Treasury indexed hybrid adjustable-rate mortgage averaged 3.50% with an average 0.3 point, up from last week when it averaged 3.36% and a year ago at this time, the 5-year ARM averaged 2.84%.
    • Quick look at the Mortgage ETF vs. S&P500 comparison in past 5-years:
    • Mortgage Bankers Association indicates that, number of applications submitted by hopeful home buyers has risen for three of the past four weeks despite higher mortgage rates.
    • Refinancings are expected to make up 33% of mortgage originations this year, down from 59% in 2021, according to the Mortgage Bankers Association.
    • The March national median listing price for active listings was $405K up 13.5% compared to last year and 26.5% compared to March 2020, as per to Realtor.com economist Danielle Hale as cited by HousingWire.
    • National inventory of active listings declined by 18.9% Y/Y, while the total inventory of unsold homes, including pending listings, declined by 12.5%.
    • "Given the speed of the mortgage rates increase we're still not quite settled on whether this is volatility and you will see rates moving in both directions, or whether this is just a level shift and we will stay here at the higher level," MBA Economist Michael Fratantoni commented.
    • Homebuilding stocks: (DHI), (LEN), (TOL), (PHM), (BLD), (NVR)
    • ETFs Watch: (XHB), (HOMZ), (REZ), (REM)


  16. TLRY -3.50%Mar. 31, 2022 10:12 AM ET12 Comments

    Many U.S. Multi-State Operators (MSOs) and Canadian Licensed Producers are trading lower in morning hours on Thursday even after a key House committee formally cleared the latest bill aimed at legalizing marijuana at the federal level.

    With the clearance from the House Rules Committee, the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act, now heads to a Floor vote, which, according to Cowen analyst Jaret Seiberg could be held on Friday during market hours.

    MORE Act aims to remove cannabis from the list of federally controlled substances and promote social equity in the industry, among its other objectives.

    A previous version of the bill cleared the House floor in December 2020 but stalled in the then-Republican controlled Senate.

    Seiberg argues that the key factor to watch would be the number of House Republicans who will speak in support of the legalization even if they oppose the bill.

    “This will give us an indication of whether narrower House Republican legalization bills will have a path to passage in the House next year if the GOP wins a majority in the mid-term election,” Bloomberg reported, quoting Seiberg.

    Notable decliners are dominated by Canadian LPs such as Tilray (NASDAQ:TLRY -3.3%), Aurora Cannabis (NASDAQ:ACB -3.6%), Hexo (NASDAQ:HEXO -2.8%) and Canopy Growth (NASDAQ:CGC -3.2%). U.S.

    US MSO, Curaleaf Holdings (OTCPK:CURLF -1.4%) is also trading lower with cannabis distributors, GrowGeneration (GRWG -2.3%) and OrganiGram Holdings (OGI -1.7%).

    After a sharp rally last week, ETFMG Alternative Harvest ETF (MJ -1.9%) and Global X Funds – Global X Cannabis Etf (POTX -1.2%) are also in red. Both ETFs have well outperformed the broader market over the past 30 days, as shown in this graph.

    EADSY -1.51%Mar. 31, 2022 9:59 AM ET

    Airbus (OTCPK:EADSFOTCPK:EADSY) says it is seeking alternative sources of titanium so it can maintain ambitious plans to raise production for A320-family jets from the current ~40/month.

    The planned ramp-up to a rate of 65/month by mid-2023 is Airbus' number one priority, European sales chief Wouter Van Wersch told Bloomberg; the planemaker relies on Russia for about half its supply of titanium sponge, creating the potential for disruption if shipments are interrupted.

    For now, the European Union has allowed Airbus to keep buying Russian titanium, while U.S. rival Boeing has suspended purchases.

    Separately, Qatar Airways said surface flaws on Airbus A350 jets causes a risk of the fuel tanks igniting, in the latest development in a bitter legal dispute which will be fully aired in a London court next month.

    The new accusation is the latest in a dispute which kicked off when Qatar Airways sued Airbus late last year over surface quality issues with A350 jets.

    Mar. 31, 2022 8:32 AM ET

    • February Personal Income and Outlays: Income +0.5% M/M vs. +0.5% expected and +0.1% prior (revised from +0.0%).
    • The increase reflected a boost in compensation that was partly offset by a decrease in government social benefits.
    • Personal spending: +0.2% M/M vs. +0.5% consensus and +2.7% prior (revised from +2.1%).
    • On Tuesday, consumer confidence rose slightly more than expected in March.

    Mar. 31, 2022 9:48 AM ET

    • March Chicago PMI: 62.9 vs. 57.0 consensus and 56.3 prior

    FIVE +0.66%Mar. 31, 2022 8:39 AM ET

    Citi upgraded Five Below (NASDAQ:FIVE) to a Buy rating after having the retailer set at Hold.

    The firm walked away from Five Below's (FIVE) Investor Day event impressed with the growth potential laid out by the management team.

    Analyst Paul Lejuez: "We believe this underscores FIVE’s still very long runway for growth, fueled by highly productive and profitable store expansion (store goal raised from 2,500 to 3,500 vs. 1,190 in F21) and opportunity to drive comps through its Five Beyond concept, store remodels and capitalizing on new trends."

    Lejuez also said that Five Below (FIVE) is resonating with younger consumers. "We expect FIVE to continue benefitting from being a go-to destination for teens/tweens, consistently taking advantage on new trends that arise," he noted.

    Citi pushed its price target on Five Below (FIVE) up to $205.

    Shares of FIVE jumped 2.37% premarket to $164.00.


  17. Mar. 31, 2022 4:47 AM ET100 Comments

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

    Gas Contracts

    Germany has warned of a possible energy emergency that could come as soon as Friday after rejecting a Russian demand that natural gas be paid for in rubles. President Vladimir Putin has since suggested a potential compromise, in which payments could be made in euros and sent to Gazprombank – which is not subject to EU sanctions – to be converted into rubles. German Chancellor Olaf Scholz Scholz has asked for written information to "better understand the procedure."

    Putin Standing Firm on Ruble Demand

    Vladimir Putin reportedly plans to stand firm on his demand for ruble payments for gas exports. According to media accounts, the Russian leader will require payment in his country's currency or else he will halt deliveries of natural gas. The order is set to become effective on April 1.

    Insurance Costs for Ukraine Conflict Mount

    An estimate issued by S&P Global indicated that the insurance cost from Russia's invasion of Ukraine could reach as high as $35B. According to Reuters, the company predicted that the losses in the specialty insurance market could range between $16B and $35B.

    SPR Release

    The Biden administration is weighing a plan to release around 180M barrels of oil from the Strategic Petroleum Reserve, in what be the largest release from SPR since it was created in 1975. WTI crude futures tumbled 6.7% to $100.53 on the news, while Brent futures fell 7.3% to $110.23. The coming SPR decision would likely see 1M barrels released daily over the course of six months, but analysts are still debating its benefits and whether it would put a dent in the inflationary forces seen in the current environment.

    Heading Eastward

    Ukrainian forces are preparing for new Russian strikes on the Donbas, according to President Volodymyr Zelenskyy, as Moscow deploys more troops there after suffering setbacks near Kyiv. The Donbas region includes two self-proclaimed "people's republics" – Donetsk and Luhansk – that Russia is "helping to free" from Ukrainian control. The besieged port city of Mariupol is located in Donetsk and has seen some of the war's heaviest shelling, with around 170K people trapped there with scarce food and water.

    Botched Invasion?

    "We believe that Putin is being misinformed by his advisers about how badly the Russian military is performing and how the Russian economy is being crippled by sanctions, because his senior advisers are too afraid to tell him the truth," White House communications director Kate Bedingfield told reporters. This has "resulted in persistent tension between Putin and his military leadership. He didn't even know his military was using and losing conscripts in Ukraine, showing a clear breakdown in the flow of accurate information to the Russian president."

    CL1:COM -4.24%Mar. 31, 2022 4:39 AM ET145 Comments

    The Biden administration is weighing a plan to release around 180M barrels of oil from the Strategic Petroleum Reserve, in what be the largest release from stockpile since it was created in 1975. WTI crude futures (CL1:COMtumbled 6.7% to $100.53 on the news, while Brent futures (CO1:COMfell 7.3% to $110.23. The coming SPR decision would likely see 1M barrels released daily over the course of six months, but analysts are still debating the benefits and whether it would put a dent in the inflationary forces seen in the current environment.

    Commentary: "Stocks of strategic oil have a limit and flows of commercial oil do not. Flows that stop are a bigger problem than strategic stocks can solve over time," said Kevin Book, energy policy analyst at ClearView Energy Partners. "Historically, SPR releases have temporarily sent oil prices lower and are then followed by higher prices as the market prices in insufficient supply," added Josh Young, chief investment officer at Bison Interests. "It is likely that oil prices rise after an initial temporary pullback, and that the SPR may have to be refilled at even higher prices."

    The White House could make the announcement at 1:30 p.m. ET on Thursday, when President Biden gives a speech aimed at "lowering gas prices at the pump for American families." According to data from AAA, the national average for a gallon of gas currently stands at $4.23 per gallon, down a penny from a week earlier, but up from $2.87 one year ago. OPEC+ is also scheduled to meet today, but is expected to stick to plans of boosting production by another 400K barrels a day in May despite U.S. pressure to pump more, while the IEA has called an emergency ministerial meeting for Friday to discuss oil supply and coordinate a global release by other countries.

    Some history: Washington has released oil from the SPR roughly two dozen times, but most of them have been on a small scale (around 1M barrels) and in the wake of local disasters or emergencies. Over the past six months, however, the Biden administration has coordinated two mega releases of 30M and 50M barrels, while the latest 180M would be a third. Prior to these, a big drawdown from the SPR was a rare event, only coming after supply disruptions during the Libyan civil war in 2011 and Hurricane Katrina in 2005. The SPR currently holds 568.3M barrels of oil, its lowest level since May 2002.

    USO -2.55%Mar. 30, 2022 10:33 PM ET182 Comments

    • Late Wednesday, it was reported that the White House is considering a strategic petroleum reserve (SPR) release of roughly 1mb/d for several months; the total release could be 180mb, according to Bloomberg sources.
    • The release would follow prior attempts from the White House to reduce the price of oil (USO) and gasoline, including a 50mb SPR release announcement in November, and a 30mb release announcement in March; so far in 2022, the White House has released ~25mb, or ~300kb/d.
    • The SPR stands at ~570mb, so the reported 180mb release would reduce reserves by ~32%:
    • The reserve has historically been called upon during periods of supply disruption, and the market has struggled to form consensus around exactly how much oil has been disrupted as a result of the war in Ukraine.
    • Energy investors (XLE) and commodity traders alike are sure to focus on upcoming policy announcements from the White House, as any SPR news is likely to provide insight into Russian supply impacts as well as the Iran nuclear deal.

    BABA -4.93%Mar. 30, 2022 10:09 PM ET89 Comments

    U.S. Securities and Exchange Commission Chairman Gary Gensler appeared to tone down speculation of a potential imminent deal for Chinese companies to avoid delistings in the U.S.

    The SEC has threatened to delist companies that fail to allow U.S. regulators to review their company audits for three-straight years, a rule that went into effect in late 2020. The agency earlier this month named five companies from China that could be delisted for failing to abide by U.S. accounting regulations.

    “There have been thoughtful, respectful, productive conversations, but I don’t know where this is going to end up,” Gensler said in a Tuesday interview with Bloomberg. “It’s up to the Chinese authorities, and it could be frankly a hard set of choices for them.”

    Gensler's remarks are similar to some remarks the Public Company Accounting Oversight Board said last week, that were first reported by Bloomberg. The agency said that while it's 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.

    Gensler indicated to Bloomberg that only full compliance with U.S. audit inspections would suffice.

    “If we’re in the same place two years from now,” many companies “would be suspended,” Gensler told Bloomberg.

    The PCAOB comments came after China's Vice Premier Liu He said the country would continue "to support various types of companies to list overseas," noting that it would work with U.S. regulators, including the SEC, on the matter. The comments sent shares of tech stocks such as Alibaba (BABA) skyrocketing as some investor concerns appeared to be eased on the potential delistings.

    It was also reported last week that Alibaba (BABA), JD.com (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, according to the Reuters report.


  18. AAPL -0.64%Mar. 30, 2022 8:17 PM ET70 Comments

    Apple (NASDAQ:AAPL) and Meta Platforms (NASDAQ:FB) provided customer data such as addresses, phone numbers and IP addresses to hackers who posed as law enforcement officials, Bloomberg reported.

    The news outlet, citing three people familiar with the situation, reported that the tech giants gave the information in the middle of last year to a fraudulent "emergency data request." These requests generally are accompanied by a search warrant or subpoena, but emergency requests do not need court orders, Bloomberg added.

    Snap (SNAP) was also the recipient of a forged request, but it is not clear if the Evan Spiegel-led company complied and responded.

    Apple, Snap and Meta Platforms did not immediately respond to a request for comment from Seeking Alpha, but Apple pointed Bloomberg to the law enforcement guidelines posted on its website.

    "If a government or law enforcement agency seeks customer data in response to an Emergency Government & Law Enforcement Information Request, a supervisor for the government or law enforcement agent who submitted the Emergency Government & Law Enforcement Information Request may be contacted and asked to confirm to Apple that the emergency request was legitimate," the guideline states.

    It's unclear who the hackers were, but some cybersecurity researchers have speculated that it could be a group of minors in the U.S. and U.K. and may be one of members of the Lapsus$ group that hacked Nvidia (NVDA), Microsoft (MSFT) and Samsung (OTC:SSNLF) in recent weeks.

    Bloomberg added that the information obtained by the hackers was used to carry out harassment campaigns, citing one of the people. The three people also noted that the information could have been used to commit financial fraud.

    It's likely that the requests were sent via hacked email domains that allowed the fraudsters access to law enforcement agencies in multiple countries and created the requests using templates.

    Bloomberg also reported that Discord, an instant messaging platform, was also the recipient of a fraudulent legal request and the company told the news outlet it had complied with the request.

    On Wednesday, Apple (AAPL) started allowing certain apps, including Netflix (NFLX) and Spotify (SPOT), to allow sign-up links that point outside Apple's App Store.

    F -0.96%Mar. 30, 2022 7:35 PM ET38 Comments

    Big automakers are backing the U.S. Environmental Protection Agency's new tougher vehicle emissions regulations in a court challenge brought by some states and ethanol groups, Reuters reports.

    Texas leads 16 states, some corn and soybean growers' groups, Valero Energy (NYSE:VLO) and other ethanol producers in challenging the EPA's vehicle emissions rules that reverse a rollback of tailpipe rules issued under former President Trump,

    But the Alliance for Automotive Innovation – which represents automakers including Ford (NYSE:F), General Motors (NYSE:GM), Honda (HMC), Toyota (TM), Chrysler parent Stellantis (STLA) and others – said in a court filing Wednesday the EPA rule "will challenge the industry" but ensure "critical regulatory provisions supporting electric vehicle technology are maintained."

    The energy transition "must be supported by regulatory stability," the group said in the filing. "If the outcome of the litigation remains in question for a significant period… [automakers] could face stranded investments and planning uncertainty."

    The new U.S. standards would raise fuel efficiency 8% annually for model years 2024-26 and increase the estimated fleet-wide average by 12 miles/gallon by model year 2026.

    J.D. Power forecasts retail automobile sales in the U.S. to fall 27% in March even as profits are soaring.

    Mar. 30, 2022 6:15 PM ET10 Comments

    European Union officials raided the offices of Gazprom's (OTCPK:OGZPY) German units as part of a probe into the Russian company's role in pushing natural gas prices to record highs, Bloomberg reported Wednesday.

    Officials reportedly visited offices of companies including Gazprom Germania GmbH and Wingas GmbH, which supplies ~20% of the German market.

    The probe started before the invasion of Ukraine; Energy Commissioner Kadri Simson told the European Parliament this month that the investigation into possible anti-competitive behavior was in the fact-finding phase.

    Vladimir Putin had demanded payment for Russian natural gas in rubles, which several European countries refused, but Reuters reported Wednesday that Russia has offered a new proposal where payment could be made in euros or dollars.

    Mar. 30, 2022 6:09 PM ET5 Comments

    As consumer price inflation looms at it highest in 40 years, Federal Reserve Bank of Richmond President Thomas Barkin said Wednesday that he's "open" to hiking the central bank's policy rate by 50 basis points in May, he told Bloomberg TV in an interview.

    “I think the question — and we will make this decision when we get to the meeting in May — is how strong does the economy still look in terms of its ability to take rate increases and how high is inflation persisting. I’m looking at both of those and we’ll make our call in May.”

    Meanwhile, markets are expecting the Federal Open Market Committee to hike interest rates by half a percentage point at its May meeting following the Fed's move in March to lift their benchmark lending rate off the effective lower zero bound with a 25 basis point increase.

    Recall Philadelphia Federal Reserve President Patrick Harker said Tuesday that he's doesn't favor a 50 bps hike in May, though he "won't take off the table." Fed boss Jerome Powell also said he would support a bigger move in the fed funds rate if needed to tame inflationary pressures.

    Earlier, Federal Reserve Bank of Kansas City President Esther George said rolling off the Fed's balance sheet could help strengthen the yield curve.

    X +1.03%Mar. 30, 2022 5:37 PM ET5 Comments

    Sentiment for finished steel prices continues to improve in the U.S., S&P Global reported in its latest Commodity Insights U.S. steel market participant survey, as domestic steelmakers announcing price increases as raw material prices continue to rise following Russia's invasion of Ukraine.

    S&P Global said 91% of those surveyed expected prices to rise in April, compared with 59% in March, with 40% of those bullish participants foreseeing a rise of more than 5% in finished steel prices, and none expecting prices to fall.

    Potentially relevant tickers include NYSE:XNYSE:CLFNYSE:NUEMTCMCSTLDOTCPK:STZHFSLX

    Most respondents to the S&P Global survey attributed the anticipated price increases to rising scrap prices and the effects of Russia's invasion on the supply chain, while near-term demand also was expected to remain strong.

    Scrap prices have been soaring on import disruptions of pig iron and other scrap grades, which S&P Global said has lifted shredded and prime prices in the Midwest by $135/lt and $187.50/lt, respectively, during the March buy week; early indications for April are up $50-$100/lt for shredded and up $100-$200/lt for primes.

    J.P. Morgan recently named Cleveland-Cliffs its top pick in the steel sector, as the impact of Russia's invasion is only just beginning to be felt in North America.


  19. /NQ testing 15,000 again.  

    /YM failing 35,000 

       

    "Gonna make you fall, gonna sock it to you
    That's right, I'm the last one standing
    And another one bites the dust

    "Let me hear you say, this shit is bananas
    B-A-N-A-N-A-S
    This shit is bananas
    B-A-N-A-N-A-S
    Again, the shit is bananas
    B-A-N-A-N-A-S"


  20. How high does natural gas go in the coming days?


  21. How should I know?  

    CARSON IS CARNAK SIS BOOM BAH- 7 MINS. COMPLETE SKETCH GIF | Gfycat

    This is a crazy situation but $6 should be hard to hold for now but, if this war drags on or if Europe actually tells Russia to shove their Ruble payments for /NG – $6 could seem like a bargain.  When we had all that nonsense 20 years ago, /NG hit $13 twice and this situation is potentially more dire.

    Of course the good news is we survived it.  


  22. Oh, in 2005, since I'm sure not everyone knows, Gazprom (Putin) was complaining that Ukraine was stealing gas on the way to Europe through Ukrainian pipelines.  It turned out to be a little true and Russia cut off the gas and prices went CRAZY!  Things were calm for a couple of years but then Russia started complaining that Ukraine was taking fees from Europe on behalf of Russia and not remitting them – also partly true. They went to International Court (Stockholm) about it and Ukraine lost. Since then Russia has diverted a lot of gas around Ukraine and it's always been a point of contention with lots of bad blood.

    You can see why Nord Stream matters so much to them – without that and South Stream – they are still stuck with Ukraine (and notice they took Crimea over the South Stream access).

    In the end, it's always about money.


  23. If you think inflation is bad now, try $12 /NG:


  24. Interesting article on the possible reasons for war and potential end-game since we are on the NG topic 

    https://www.nytimes.com/2022/03/29/opinion/ukraine-war-putin.html


  25. I agree – it's all about the money.


  26. Hi Phil:  What is your thinking re SDS as a hedge?  Unless, I am mistaken the Short Term Portfolio has no SPX hedges.  What is your reasoning?


  27. SDS/John – I generally hedge the indexes I think are weakest and S&P has the multinational large caps best-suited to deal with rising rates, labor shortages and inflation.  If you feel you are highly correlated to the S&P, then there's nothing wrong with using SDS – we just chose not to and, so far, no regrets.


  28. COPX -0.26%Mar. 31, 2022 12:55 PM ET6 Comments

    The global copper industry needs to invest more than $100B to build mines to reduce a potential 4.7M-ton annual supply deficit by 2030, according to Erik Heimlich, head of base metals supply at CRU, Mining.com reports.

    It means the world would need to build eight projects the size of BHP's Escondida in Chile, the world's largest copper mine, over the next eight years, a task Heimlich said seems questionable given the historically low completion rates of such large-scale projects.

    "A large share of the greenfield possible projects in 2012 remain under-developed, so there are questions about the ability to respond to the supply gap in an efficient and timely manner," Heimlich told the 2022 CRU World Copper Conference held in Santiago, Chile.

    ETFs: NYSEARCA:COPXNYSEARCA:CPERJJCTFJJC

    Copper prices have been trading near decade highs, although they fell on Wednesday to $10,331/metric ton in London on concerns over demand in China because of the resurgence in COVID-19 cases.

    MMG Ltd. says it secured government approval to expand its giant Las Bambas copper mine in Peru.

    CL1:COM -6.52%Mar. 31, 2022 2:03 PM ET51 Comments

    • Thursday, the Department of Energy released final monthly production statistics for January; weekly DOE estimates pointed to production of 11.6mb/d in January, though the final monthly tally released Thursday came in at 11.4mb/d; down 200kb/d from December levels, but up ~300kb/d from January 2021.
    • Following the White House SPR announcement Thursday, crude markets (CL1:COM) stabilized, down ~4.5% from the time rumors of an impending announcement emerged.
    • Trafigura's Chief Economist made an appearance on Bloomberg TV following the announcement, indicating that "because you're sending a signal to producers that by releasing the oil, we're bringing prices down and that's going to disincentivize the investment we need."
    • The Economist went on to note that although near-term prices fell, prices of crude oil futures for 2023 rose on the back of the announcement.
    • Goldman's oil strategist released a report following rumors of the announcement, indicating that "such a release would therefore not resolve the structural supply deficit, years in the making. In fact, lower prices in 2022 would support oil demand while slowing the acceleration in shale production."
    • Share price reactions have been mixed; refiners like Valero (VLO) and PBF (PBF) traded higher on the day, as did Kosmos (KOS), Apache (APA) and Occidental (OXY); however, Chevron (CVX) traded marginally lower, as did Pioneer (PXD).



  29. You know who could fix that copper shortage?  NAK!  

    Who's going to miss a few salmon???

    Salmon Nigiri (How to Make Salmon Sushi)


  30. There, problem solved: 

    MWO: Forums - -Ms- And The Battle For Kentares Iv - Page 2


  31. Phil,

    Low's issued new debt (3/31) and dropped 10% in 4 days then rallied for 2 sessions and then dropped even lower. Any idea if there is something else afoot?

    Thanks


  32. I’ll have to check a bit later, remind me tomorrow.  

    Well, that was quite the opposite of a stick save. Makes me a little bit worried about tomorrow.

    Depends on nonfarm payroll‘s  


  33. Phil:  FL is looking very inexpensive.  PE is 3.44.  I haven't begun to research it yet, but people need to buy shoes, and they need to do so in person, rather than via the Internet.  Any thoughts?


  34. FL- I recall looking at them a bit ago and was concerned with the business concentration of NIKE as main supplier. This is from CFRA analysis:

    Our assessment reflects the highly competitive and fragmented footwear industry, alongside favorable industry dynamics like an accelerated and partly Covid-19- inspired shift to healthy and active lifestyles. That said, we hold concerns over how FL will navigate the post-Covid-19 world, given high exposure to enclosed malls, alongside lower digital penetration relative to peers. Our assessment is also supported by a track record of setting poor expectations with investors and over-reliance on goods from NKE, which has been on a consumer-direct offense