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Just Another Manic Monday – Big Tech Weak?

ImageEarnings, earnings, earnings!  

We've got Apple and Google and Twitter and Meta, on Boeing on Qualcom, on Intel and Visa!  Santa would be exhausted by the time he got through calling out our S&P high-flyers and, so far, investors have been in a punishing mood – using any hint of weakness as an excuse to dump their holdings.  

All this is coming against a background of not IF but WHEN there will be a recession while war continues to rage in the Ukraine and Covid continues to rage around the World,  Oh yes, and don't forget inflation, which is completely out of control with no end in sight – that's bad too.  

There's been a 50% rise in infections in the US this month and China is locked down but most of the rest of the World is just pretending it isn't happening.  1/4 (80M) of the US population has already gotten Covid and 1/3 of the population (110M) refuse to be vaccinated or take most precautions so there's essentially no way to get rid of this thing and the only question is how severe the next wave will be?  It's not a political question – it's an economical one.  We've run out of stumulus, which causes more inflation that we're trying to fight now anyway – so what are we going to do if we're hit with another wave of Covid?

With Q1 GDP coming out on Thursday, what we're really concerned with is whether or not the indexes can stay out of our 20% correction range, which makes 13,500 on the Nasdaq hyper-critical as we crashed below the 20% correction line there as well as 1,920 on the Russell, which is our only index where we prediced more than a 20% correction LAST YEAR, when we began using this chart:

  • Dow 36,000 to 28,800 would be a 7,200-point drop with 1,440 bounces to 30,240 (weak) and 31,680 (strong).   
  • S&P 4,800 is 20% above 4,000 and that makes it an 800-point drop with 160-point bounces so 4,160 (weak) and 4,320 (strong).
  • Nasdaq is using 13,500 as the base.  14,100 is the weak bounce and 14,700 is strong.  
  • Russell 1,600, would be about an 800-point drop with 160-point bounces to 1,760 (weak) and 1,920 (strong)

So, very simply, if the Nasdaq turns green we have some hope but if the Russell turns red – we need to add more hedges and consider cashing out completely.  If these levels fail, you can't even imagine the carnage that lies below us.  Look what a mess the S&P is already:

But, of course, if you look at it in perspective, this is only a minor correction at best:

Covid alone took us from 3,300 to 2,200 (33%) in early 2020 and now that's just one of the things we are worried about.  From 4,800 a 33% correction would be about 3,200 – the top of where we corrected from last time and, from a LONG-term perspective, that would be nice consoldation for the decade ahead and still better than the 60% correction we had in 2008/9, right?  

Last Tuesday, in our morning PSW Report (which you can subscribe to here) I asked you if you would like to make a quick $10,000, saying:

S&P 500 Futures (/ES) pay $50 per point and we're below the 50-day moving average at 4,416 – so that would be the stop line and 4,320 is the strong bounce line and, failing that, we have no support at all until the weak bounce line at 4,180 – 200 points below where we are this morning (4,385).  If we call 4,400 the stop line – then we risk losing $50 x 15 points = $750 against the potential gain of $10,000 if the S&P falls back to where we were a month ago.

We still have the war, we still have Covid, the Fed is still raising rates because we still have inflation – am I missing something?  In fact, speaking of the Fed, St Louis President, James Bullard just said this morning that his target rate for THIS YEAR is 3.5%, not 2.5%.  

4,218 is where we bottomed out on Friday and that was good for gains of $9,100 and we're back to 4,238 this morning and I'd certainly keep a stop at 4,250 to lock in $7,500 of profits and, by the way – you're welcome!    Oil is down another 5% this morning at $97 and that's almost tempting to play for a bounce back to $100 on /CL but I'd rather play Natural Gas (/NG) over the $6.50 line with tight stops below as Putin might cut off gas to Europe and send prices well over $8.  /NG futures pay (or take!) $100 per penny so even if you lose 0.05 – that's $500 but, on the very bright side, $8 would be $15,000 in gains on a single contract so playing off a good support line is the way to go but TIGHT STOPS is the key to surviving.

Gold (/GC) will be attractive if it gets back over $1,900 (now $1,895) with tight stops below and the same goes for Silver (/SI) at $23.50.  The Dollar is super-strong at 101.50 but hasn't properly tested 100 as it's gone over so I'm expecting a little pullback this week as it's up on all the hawkish Fed comments last week and that's not likely to get worse and other Central Banksters may start talking about raising their own rates and leveling the playing field with our Fed – and that would calm the Dollar down as well.

That being said, let's take a look at our calendar for the week where there are NO Fed speakers scheduled (doesn't mean they won't say anything) as they too are probably waiting for earnings results from Big Tech before trying to steer the markets one way or another.  We have the Chicago and Dallas Fed Reports this morning and Chicago already reported a March slowdown to 0.44 from 0.54 in February and that's down from 0.74 in January – how's that for a trend?

Image

Image

Notice Personal Consumption and Housing went negative – that's not good…  Notice the sharp decline in Employment from last month.  The last time we had that was August and these are early indictators but we had a decline in September, as the S&P fell from 4,550 to 4,275 (6%).  We're already down 7.5% from our March highs but I'm still expecting to see our -10% range at 4,180 before we're done (if we're even done there at all).  

Our primary reason for not going to CASH!!! so far is we think the Government has another round of stimulus left to throw at us.  It's hard to imagine they want to roll the dice on another 10-20% drop in the market from here coming into the election cycle but you never know – so far, the Republicans have held up each vote on more stimulus as they feel the public is blaming their economic problems on Biden and the Democrats – which is like blaming the firemen for the fire they came to put out – but what can you do?  

What we could do was improve our hedges in our Short-Term Portfolio, which is what we did on Wednesday last week – BEFORE the market started dropping…

It's going to be a crazy week, so sit back and enjoy the ride.  

 


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  1. Good Morning! Can anyone explain to me why the Yen is weakening? In a risk off environment the opposite should be happening…. The WSJ did a poor job at trying to explain the catalyst behind the move.


  2. Good Morning!


  3. Phil / BABA

    I have the 2024 120C – 145C spread. The short 145 calls are up 70% and the long 120 calls are down 65%. Would it be a good time cash in on the short calls and look at rolling to a different spread?
     


  4. Phil your thoughts on CMG were spot on in the fall. Any other stocks where the P/E is stretched and heading into a recessionary environment that will correct aggressively? Or does CMG still have room to fall.


  5. Good morning!

    Yen/Tully – The Yen is a F'd currency – as they all will be in the near future.  Japan has $12.2Tn in debt against a $5Tn economy so 266% of GDP is debt, 45% of that debt is held by the BOJ.  Currently, at 2% interest ($240Bn), debt service is 25% of the Government's total expenditures.  And this is a country that spends only 5% of it's GDP on Defense.  Our Government collects $4Tn against a $22Tn GDP so about 18% of GDP is collected in taxes and fees while Japan is already over 20% of their GDP and if rates rise to 4%, where are they going to get another $250Bn/yr.  Meanwhile, they are still running $1Tn (20%) annual deficits.  They have worse issues than we do with aging population, Social Security and Health Care, which is projected to go from 15% of their GDP (same as us) to 30% over the next few decades (and that's without the current inflationary spiral).  

    If Japan were a company, it would be clearly on its way to Bankruptcy and, as a company or a country, they clearly have absolutely no exit strategy for this and it's not for lack of trying or being unwilling – this just seems to be an insurmountable problem at this point.  I guess the best overall solution would be to encourage immigration and increase the population from 1/3 (40M) over 60 to 1/4 so they need 35M young people which means they have to bring in about 3M per year for the next decade or so.  That would grow GDP to $7Tn and add taxpayers and retirement contributors, etc. but it's a non-starter in Japan as they don't like immigrants.  

    Population pyramid of Japan in 1930, 1995 and 2025

    So they are screwed and they keep electing people who say they are not screwed and won't do what it takes to make things better so they keep heading towards that cliff so yes – nobody wants their currency and the only reason anyone does use it is because it's a well-known reserve currency that people still trust more than other Asian countries.  The Yen is 5.5% of Global Reserves (US 59%, Euro 20.5%, Pound 5%, China 2.5%, Canada 2.5%, Aussi 2%, Swiss 0.2% – no one else matters). which is a stupidly high proportion but, other than China and Australia, they have no competition in Asia and who ever says they want to have some Aussie Dollars "just in case"?  

    So, generally, investors split their Asian allocations between Japan and China and, if investors put more than 10% of their money into Asia, then both of those countries end up getting over-allocated vs their relative weights and that's what keeps both of those currencies strong as US investors might put 10% or less in Asia but European investors tend to go maybe 20% US, 20% Asia and Asian investors who are keeping half their money local are the major over-buyers of Japan and China's currencies so the whole house of cards over there is held up by false demand and, should sentiment begin to sour on the Yen – I can't imagine where the sellers will find buyers then.

    How would you like that to be your savings account?

    Also, if you want real reporting on foreign countries – don't read the WSJ.  

    https://www.macaubusiness.com/lack-of-momentum-external-factors-weigh-on-japans-economic-recovery/

    Following two years of contraction in 2019 and 2020, Japan’s economy was back on the track of slow expansion in 2021, with real gross domestic product growing by 1.6 percent. However, domestic demand had a small contribution of 0.6 percentage points to the economic growth, due to waning consumption and declining investment.

    Since the beginning of this year, the central bank of the United States, the Federal Reserve, has been more firmly on the hawkish stance in light of a 40-year high inflation, hinting a widening gap of interest rate between the yen and the U.S. dollar. The yen, losing ground, has depreciated further, amplifying the impact of surge in international commodity prices on the Japanese economy.

    According to the Nikkei’s currency index of the world’s major currencies, the yen was devalued by 5.7 percent in the first quarter of this year. The yen has plummeted more than 10 percent against the U.S. dollar since March.

    Amid growing concerns that a weaker yen would harm economic recovery, Kengo Sakurada, chairman of the Japan Association of Corporate Executives, one of Japan’s three largest business groups, said the yen was too much devalued.

    According to a media survey, 76 percent of companies surveyed said they would find it difficult to cope with the situation, where the yen falls below 125 to the U.S. dollar, while 94 percent said they could not withstand a level of 130 yen to the U.S. dollar.

    The sharp depreciation of the yen has worsened Japan’s current account balance. The current account surplus has been shrinking since August last year, slipping into deficit in December and widening to about 1.19 trillion yen (10.35 billion U.S. dollars) in January 2022, due to rising import prices and Japan’s deteriorating trade balance, according to data from the Finance Ministry.

    The Nikkei estimated that Japan’s current account deficit will widen to 16 trillion yen (139.16 billion dollars) in fiscal 2022 if the yen trades at 120 to the U.S. dollar and crude oil prices rise to 130 dollars a barrel.

    Coupled with sharp depreciation of the yen, mounting imported inflationary pressure has caused burden on businesses. According to the Bank of Japan (BOJ), the country’s corporate inflation index has risen for 13 consecutive months year on year, hitting 9.5 percent in March this year, as import prices continued to surge.

    As Japan has been facing deflation pressure for a long time, and the COVID-19 pandemic has repeatedly dampened the sluggish domestic demand, Japanese companies are generally cautious about raising prices, and many companies have not passed on the rise in raw material prices to retail prices, leading to great pressure on their operations.

    According to the BOJ’s short-term economic survey released earlier this month, the sentiment index of large manufacturing companies declined in the first quarter, while the expectation of short-term performance of companies in all industries deteriorated.

    BOJ Governor Haruhiko Kuroda said that cost-push inflation is different from the demand-expansion inflation expected by the central bank. Instead of stimulating consumption, it will restrain consumer demand, which is not conducive to Japan’s economic recovery, he said.

    According to a recent survey of 36 economists by the Japan Center for Economic Research, Japan’s economy is likely to slip into negative growth in the first quarter of this year.

    Taro Saito, head of Economic Research Department at NLI Research Institute, estimated that Japan’s economy will grow just 2.1 percent in fiscal 2022.

    BABA/Jij – $84!  That's sad.  First it was regulation, now they are down on lockdowns.  

    Keep in mind it's now more speculative than it was as de-listing is still a possible threat so, unless you are prepared to deal with that – be very careful.  The calls and puts are down pretty proportionately so hopefully you aren't down too much so think hard before you put more money on the fire.  If you do want to stick with it, you are essentially liquidating the position at $14/9.75 so $4.25 is what you are salvaging and the $75s are $30 and the $100s are $20 so that spread is net $10 and what I would do is a 2/3 cover (like 30 of the $75s and 20 of the $100s) and, if there's a bounce back over $100, you can start selling 10 or 15 July $110s, which are now $3 but should be at least $7 if BABA moves up and then you have used 81 out of 634 days you have to sell to collect $7-10,000 on the net $40,000 spread.  Of course, if BABA goes lower, as long as you get $7 or more for the last 10 of the short 2024 $100s, you'll have net in for $33,000 on the $75,000 spread (plus whatever loss you are rolling in from).

    High P/E/Pman – We have our TSLA short in the STP, that's this one:

    TSLA Long Put 2023 20-JAN 1,000.00 PUT [TSLA @ $1,005.05 $0.00] 5 4/6/2022 (270) $90,000 $180.00 $13.15 $180.00     $193.15 $0.00 $6,575 7.3% $96,575
    TSLA Short Put 2023 20-JAN 900.00 PUT [TSLA @ $1,005.05 $0.00] -5 4/6/2022 (270) $-67,500 $135.00 $5.30     $140.30 $0.00 $-2,650 -3.9% $-70,150
    TSLA Short Call 2022 15-JUL 1,200.00 CALL [TSLA @ $1,005.05 $0.00] -2 4/6/2022 (81) $-16,000 $80.00 $-34.75     $45.25 $0.00 $6,950 43.4% $-9,050

    It was more like $1,100 when we started.  

    VTR was one I noticed recently as it's a REIT with a leaning towards senior properties which SOUNDS good but their costs go up and the amount of money you can squeeze out of seniors is pretty fixed so they don't have that much leverage to raise rents.  Once upon a time, they made $400M a year but that was down to 50M last year and a loss is projected this year and MAYBE $120M next year but the company, at $57.67, is being valued at $23.3Bn, which is fairly insane.  Also, there's the $12Bn in debt so call it $240M in interest and another $240M by the end of the year is going to push the earnings back into the red.  I don't see the light at the end of the tunnel for these guys.  

    I'd go for the 2024 $50 ($5.50)/40 ($3.25) bear put spread at $2.25 as there's not much risk and you get to see a few earnings reports.  Seems unlikely you'd lose more than $1.50 before pulling the plug so that risk vs $7.75 (344%) upside potential seems very reasonable.  You could do 30 of those for $4,500 and sell 5 of the 2024 $70 calls for $5 (if they pop a bit) and than you'd be in the $30,000 spread for net $2,000 with $28,000 (1,400%) upside potential but, even without the short call sale, +$25,500 would be a nice pay-off too.  


  6. I'm not short enough damn it!


  7. Phil – good explanation on FXY. 


  8. it's really kind of interesting how poorly gold (and it's ugly step-sister, silver) have performed recently. We will see another August 2011 type of bubble? Can we see $2500-3000 per oz, or is gold forever dead?







  9. Short enough/BDC – We went about 20% shorter last week.

    As to Gold and Silver – I think they are simply being re-priced to reflect the weakening of fiat currency in general – it's not a trend likely to reverse as it's driven average extraction costs from $1,000 to $1,350 over the last few years and you can't put that genie back in the bottle.  We throw away so much gold in our phones these days – 0.035 grams per – that's about 1 Kg per 30,000 phones and they sell about 150M per year so about 5 tons of gold we trash each year is a lot but GOLD mines about 150 tons/year – so it's not really changing the global dynamic except that it doesn't recirculate like most gold.  And, of course, we eat a lot of gold these days – I wonder what that amounts to?

    golden phoenix cupcake

    em

    Oil hit $95.28 at the low, Gold failed $1,900 with the Dollar still going up and testing 102.

        

     

    Game is still on if we get our crosses.

    Euro not doing much better than the Yen – they can't possibly let it fall below $1, can they?

    Now!

    • Morgan Stanley analyst Jens Eisenschmidt on Monday has cut his economic growth forecasts for the euro area, citing weakness ahead amid less energy flows from Russia, with a high risk of an embargo on Russian oil.
    • While growth in the euro zone has remained resilient, "we expect headwinds will grow in the coming quarters, also in the light of strict covid containment policies in China," Eisenschmidt wrote in a note to clients.
    • As a result, the analyst has revised down his 2022 GDP forecast to 2.7% and lowered his 2023 assumption to 1.3%, the note said.
    • The downward revision comes as inflation in Europe – like in most developed markets – is surging to historically high levels with no slowing in sight. In turn, the European Central Bank is expected to start normalizing monetary policy with a 25-basis point rate hike as soon as September.
    • In mid-April, the ECB left interest rates unchanged.

    Apr. 25, 2022 12:33 PM ET

    Real estate brokerage firm Redfin sees an early sign that the housing market is starting to cool as inflation and rising mortgage rates make homes less affordable, according to a report released on Monday.

    Some 65% of home offers written by Redfin agents faced competition on a seasonally adjusted basis in March, down from the revised rate of 66.7% in February and the first M/M decline since September.

    "Most homebuyers are still encountering bidding wars, but competition is beginning to cool because surging mortgage rates and home prices are prompting some Americans to back out or put their buying plans on hold," said Redfin Chief Economist Daryl Fairweather. "We expect bidding wars to ease further in the coming months as rising mortgage rates price more buyers out of the market."

    It's not just the number of competing bids that are declining. Other signs that the housing market has become less frenetic — mortgage applications, home tours and online housing searches have also declined, and more sellers are lowering their asking prices after putting their homes up for sale.

    The intensity of competition, though, varies by region. San Jose, California, is the most competitive market, with 79.8% of Redfin offer facing competition, up from 77.5% in February. The Boston metro market had 79.0% of offers vying with competing bids, up from 77.3% in February.

    More than 78% of offers in the Providence, Rhode Island; and Worcester, Massachusetts, markets had competing, but both are down from the 80%+ range in the previous month.

    Earlier, BofA trimmed homebuilder price targets, EPS estimates on the expectation that demand for new homes will peak in Q2.

    Last week, Mortgage rates, at the highest level in 10 years, rose for a seventh straight week

    KSS +4.28%Apr. 25, 2022 12:15 PM ET3 Comments

    Kohl's (NYSE:KSSrose 3.5% on a report that the department store chain received an offer from Simon Property (SPG) and Brookfield Asset Management valued at more than $8.6 billion.

    Simon (SPG) and Brookfield (BAM), which owns JCPenney, offered $68/share for Kohl's (KSS), according to a NYPost report. The bidders plan to cut costs a Kohl's by over $1 billion over the next three years.

    The NYPost article comes after CNBC's David Faber said on Friday that Simon Property (SPG) and Brookfield (BAM) are said to have expressed interest together in a potential bid for Kohl's.

    Other bidders reportedly bidding for Kohl's (KSS) include Hudson's Bay, Sycamore Partners, Acacia Research (ACTG) and Starboard Value, possibly Leonard Green and Franchise Group (FRG).

    The WSJ has previously reported that Sycamore and Hudson's Bay offered in the high $60s for Kohl's. Leonard Green was also expected to submit a bid for Kohl's, according to a previous NY Post report. The offers were said to be between $67 and $69. Women's Wear Daily also previously reported that a deal for Kohl's would likely be in the high $60s or $70/share range.

    PPLT -1.16%Apr. 25, 2022 11:56 AM ET2 Comments

    Palladium prices plunged as much as 13% on Monday as commodities tumble across the board amid rising concerns over prolonged COVID-led lockdowns in Shanghai and potential increases to U.S. interest rates that could hurt global growth and demand.

    June palladium (XPDUSD:CUR) recently traded -10.6% at $2,120.50/oz after hitting a low of $2,068.82, and July platinum was -2.3% to $906.30/oz.

    ETFs: (PALL), (SPPP), (NYSEARCA:PPLT), (PLTM), (PGM)

    With an increasing amount of China being shut, "chances are auto demand and economic activity broadly aren't going to be as strong as we thought, and this is offsetting a lot of the potential shortage concerns associated with the Russian sanctions," Bart Malek, head of commodity strategies at TD Securities, told Reuters.

    Russia's Norilsk Nickel (OTCPK:NILSY), the world's biggest palladium and nickel producer, reiterated its full-year production guidance and said its operations remain uninterrupted, indicating that sales have not yet been hurt by the war.

    In its first update since Russia's invasion of Ukraine, Nornickel said its Q1 nickel production rose 10% Y/Y to 51.5K metric tons due to the recovery of its two mines after flooding in 2021, palladium production fell 8% to 706K oz, platinum output slid 12% to 163K oz from a higher than normal level a year ago, and copper output remained stable at 91.4K tons.

    The company plans to produce as much as 215K tons of nickel, 2.7M oz of palladium and 667K oz of platinum this year.

    Palladium prices have retreated nearly 40% since hitting all-time highs above $3,400/oz in early March.


  10. VET -8.02%Apr. 25, 2022 11:45 AM ET32 Comments

    • The energy market route began last Thursday when, despite stable commodity markets, small-cap energy stocks sold off aggressively into the weekend.
    • The selloff continued Monday, as China demand fears outweighed mixed supply news over the weekend.
    • Early Monday, hedged oil producers like W&T (WTI) and Africa Energy (OTCPK:AOIFF) sold off 11% and 7% in early trading, un-hedged oil producers Diamondback (FANG) and Occidental (OXY) traded off ~7%, while gas-focused producers like Chesapeake (CHK) and Antero (AR) fell 5-7%, despite rising natural gas prices (NG1:COM).
    • Services (OIH) were sharply lower, as were refiners like Valero (VLO) and Philips (PSX); even the integrated names Exxon (XOM) and Chevron (CVX) were down 4-5% Monday.
    • The Energy Select Spiders (XLE) fell 12% from a week ago, with many small cap names like Tellurian (TELL), SM (SM) and Vermillion (VET) down more than 20% from last Monday's close.
    • With oil down 6% Monday, prices for WTI (CL1:COM) and Brent (CO1:COM) are hovering in the high 90s, ahead of Q1 earnings later this week.
    • Analysts are expecting strong earnings from the integrated and refining names, with improved outlooks into Q2; however, with the sector outperforming year to date, and mining stocks sinking on supply-chain and inflation headwinds last week, it appears few energy investors want to take earnings-related risk this quarter.
    VLO -4.30%Apr. 25, 2022 10:47 AM ET

    • Valero (NYSE:VLO) is set to report Q1 earnings ahead of the market open Tuesday; analysts are expecting $1.64 in earnings per share from the company during Q1.
    • However, EPS estimates for Q2 have risen from $2.50 only three weeks ago, to $3.20 currently.
    • Wall Street analyst Paul Sankey of Sankey Research believes the Company could earn as much as $5.00 in EPS during Q2 alone; noting that with refining capacity constraints "extraordinary refining markets which really will lift all boats in refining, so you can almost buy any refiner here" (PSX) (MPC) (PARR).
    • Valero's (VLO) indicator refining margins per barrel do highlight elevated profitability across US markets:
    • With Chinese demand weakness tempering oil prices, but reduced Chinese refining runs balancing refined product markets, Q2 outlooks from refiners could compare favorably to outlooks from upstream producers.

    EGRNF -0.62%Apr. 25, 2022 11:29 AM ET

    • In a broader effort to support China's distressed property market, the People's Bank of China last week had allowed lenders to loosen standards on some loans for struggling developers like China Evergrande (OTCPK:EGRNF) (OTCPK:EGRNY), Sunac (OTC:SCCCF) (OTCPK:SNCHY) and Shimao (OTCPK:SIOPF) (OTCPK:SHMAY), people familiar with the matter told Bloomberg Monday.
    • The move comes amid ongoing liquidity stress across China's real estate industry as developers fail to raise sufficient funds from asset sales.
    • Moreover, China's central bank held discussions with a slew of banks and asset managers to resolve the risks of 12 indebted builders, the people said, as reported by Bloomberg. Specifically, the PBOC wanted to ease requirements on lending for property acquisitions, extend debt maturities among other forms of deal financing the, people added.
    • The list of developers that will be supported in the first wave of the PBOC's initiative could change based on how the real estate industry's liquidity crunch evolves, the people told Bloomberg.
    • In the beginning of January, China wanted banks to accelerate property lending.

    T -0.41%Apr. 25, 2022 10:53 AM ET9 Comments

    Goldman Sachs has reinstated AT&T (T -1.5%) at Buy, liking the new positioning coming out of the Warner Bros. Discovery deal, and cut Verizon (VZ -3%) to Neutral as it sees the valuation gap between the two closing.

    Wrapping up the WarnerMedia spin-off on April 8 marked the "near-completion of a series of asset sales and spin-offs that largely unwound its pursuit of an integrated telecom, media and entertainment business model that began with its acquisition of DirecTV in 2015," analyst Brett Feldman notes.

    That results in a company that's nearly 100% focused on core communications service, in a better position to invest in core growth opportunities in fiber and 5G and "therefore sustain more durable trends in revenues and adjusted EPS."

    With plans to almost double the fiber build in the next few years, AT&T is in good position to drive improved net additions in broadband subscribers, as well as accelerated revenue growth in the consumer wireline business: "Indeed, we believe that this segment, which experienced EBITDA declines in 2020-2021, is likely to have the best growth profile across AT&T's core businesses over the next several years."

    The company can also sustain "more durable, moderate" growth in the Mobility business than it had pre-pandemic, he says.

    Feldman has a $23 12-month price target for AT&T (NYSE:T) – representing price-performance upside of 20%, with the company's 5.7% dividend yield adding to total upside there.

    Meanwhile, AT&T is closing the valuation gap on Verizon (NYSE:VZ), to which AT&T comes at a "steep discount" despite the much more similar revenue mixes and growth outlooks. Verizon warrants a "modest" premium due to a slightly more favorable business mix and more consistent network investment, but the gap's too big to reflect that.

    Along with cutting to Neutral, Feldman reduces Verizon's 12-month price target to $55 from $61 – implying 9% upside on price (again with more total upside coming by including a 5% dividend yield).

    Elsewhere, RBC Capital Markets updated its price target on AT&T (T) by cutting to $20 from $30; it's maintaining a Sector Perform rating.

    AT&T on Friday set up its executive suite for the new company's future by naming Jeff McElfresh its chief operating officer, among other small shuffles.

    Apr. 25, 2022 10:32 AM ET

    Remember, these are the same idiots who EXPECT that the GDP will be higher than the Atlanta Fed indicates on Thursday….


  11. MTN +4.29%Apr. 25, 2022 10:18 AM ET

    • Vail Resorts, Inc. (MTN +0.7%) traded slightly higher on Monday after reporting certain ski season metrics for the comparative periods from the beginning of the ski season through April 17.
    • Season-to-date total skier visits were up 12.5% compared to the prior year season- to-date period.
    • Season-to-date total lift ticket revenue, including an allocated portion of season pass revenue for each applicable period, was up 19.4% compared to the prior year season-to-date period.
    • Season-to-date ski school revenue was up 53.0% and dining revenue was up 73.2% compared to the prior year season-to-date period.
    • Retail/rental revenue for North American resort and ski area store locations was up 39.0% compared to the prior year season-to-date period.
    • CEO update: "We are pleased with our overall results as the 2021/2022 North American ski season concludes which, as expected, are significantly outperforming results from the 2020/2021 season. The prior year was significantly impacted by COVID-19 and related limitations and restrictions, which eased for most resorts in March and April of last year resulting in stronger visitation and revenue relative to the earlier parts of last season. This year, challenging early season conditions persisted through the holiday period, but our results were strong from January through the remainder of the season."
    • On Wall Street, Jefferies analyst David Katz said the announced operating metrics are generally in line with the firm's top line assumptions. Katz noted the top-end-of-the-range guidance commentary implies higher profitability vs. its existing model, which is positive for the shares. He also said that more important for the trajectory of the shares will be the normalized earnings power for FY23, which thus far appears to be "setting up in a stable manner."
    • See all the valuation metrics on Vail.

    KO +0.10%Apr. 25, 2022 10:11 AM ET4 Comments

    Coca-Cola Company (NYSE:KO) moved up 0.88% following earnings on a day that broad market averages are all solidly lower. Analysts were uniformly impressed with the quarter turned in by the beverage giant, particularly the strong organic sales mark of +18% vs. +9% consensus.

    Bank of America pointed out that Coca-Cola's (KO) growth was volume-led, with +11 points of concentrate volume, +3 points vs. unit cases on inventory build and +7 points of pricing. Coca-Cola (KO) was noted to have reiterated FY22 guidance including Russia/Ukraine headwinds of 1 point to unit case vol., 1% to 2% to sales, and $0.04 to EPS.

    BofA maintained a Buy rating on KO and price objective of $70 based on 26X the FY23 EPS estimate, which is a premium to non-alcoholic beverage peers at 22.9X. BofA thinks a premium multiple is warranted as it expects KO to emerge from the COVID-19 crisis in a stronger position.

    Morgan Stanley said strong Q1 results and maintained FY22 guidance from KO offer very clear confirmation that the company is well positioned compared to peers in a turbulent consumer packaged goods environment. An Overweight rating is held on KO following the strong Q1 results.

    Wells Fargo also stayed constructive on Overweight-rated Coca-Cola (KO) after noting the beverage giant's top line beat in every division and gross margins that met expectations. The firm said a caveat is that shipments were ahead of consumption (especially LatAm), but sales nevertheless still came in noticeably ahead, even after normalizing for shipment timing. WF said reiterated full-year organic sales guidance from Coca-Cola implies +4 to +5% delivery for the remainder of the year, decelerating from Q1 +18% due partially due to COVID comparisons.

    Bernstein may be the most bullish on the Coca-Cola (KO) numbers, saying the blockbuster EPS beat and maintained full-year guidance leaves the potential for upward revisions.

    Read more about Coca-Cola's organic sales stunner.

    LEN +2.59%Apr. 25, 2022 10:11 AM ET5 Comments

    • Bank of America analyst Rafe Jadrosich is expecting demand for new homes to peak in Q2 2022 as higher mortgage rates create a "pull forward" in which home buyers move to buy before rates move any higher.
    • iShares U.S. Home Construction ETF (ITBis falling 1.1% in Monday morning trading.
    • "We expect demand to moderate in late-2Q and 3Q as higher mortgage rates impact home buyers and the pull forward benefit subsides," the analyst wrote in a note dated Monday.
    • On average, BofA is trimming 2022 EPS estimates by 5% and 2023 EPS estimates by 10% to reflect lower gross margin assumptions. He also reduced price targets for the homebuilders he covers by an average of 15%, "based on lower price-to-book ratios given slowing demand and potential margin headwinds."
    • "Going forward, we see risk that prices will begin to hit a ceiling and builders will reintroduce sales incentives as worsening affordability pressures demand," Jadrosich said.
    • Plenty of fundamentals are still strong for homebuyers. BofA expects 2023 margins to remain above prepandemic levels as builders are still delivering homes on land that was acquired at prices below current market values. Backlogs appear to be safe, as buyers don't want to cancel after they've put down a deposit while home prices and rent continue to rise and waiting lists will be able to absorb supply.
    • In addition, demographic and migration trends are favorable, existing home inventory is tight, new home inventory is expected to remain limited on long build cycles, and rental vacancy rates are near all-time low levels and rents are rising quickly.
    • Jadrosich trims Lennar (NYSE:LEN) price target to $90 from $108, PulteGroup (PHM) to $50 from $58; Toll Brothers (TOL) to $56 from $63, KB Home (KBH) to $45 from $50, and Dream Finders Homes (DFH) to $19 from $23.
    • In Monday morning trading, Lennar (LEN) is down 0.7%, PulteGroup (PHM-1.6%, Toll Brothers (TOL-0.9%, KB Home (KBH) -1.8%, and Dream Finders Homes (DFH-1.3%.
    • Earlier this month (April 5), Credit Suisse initiated KB Home (KBH) and PulteGroup (PHM) with Outperform ratings.

    RIO -4.66%Apr. 25, 2022 8:55 AM ET22 Comments

    Rio Tinto (NYSE:RIO-3.7%, BHP (NYSE:BHP-4.2% and Vale (NYSE:VALE-4.3% pre-market as iron ore on the Dalian commodity exchange in China and the Singapore futures exchange both plunged as much as 11% Monday to the lowest in a month on rising fears that the COVID-19 lockdown that has paralyzed Shanghai during the last month could spread to Beijing.

    Steel producers also are indicated sharply lower, including (MT-5.2%, (CMC-3.9%, (X-3.2%, (NUE-3.2%, (CLF-2.6%.

    Also on watch: (OTCPK:GLCNF), (OTCPK:GLNCY), (OTCQX:AAUKF), (OTCQX:NGLOY), (OTCQX:FSUMF)

    "The outlook appears precarious in the near term, as more cases are expected to show up in the coming days and the impact to economic conditions may seem more prolonged," IG market strategist Yeap Jun Rong told MarketWatch.

    Additionally, a director at the environment ministry told a conference in Beijing on Saturday that China needs to put reasonable controls on steel output, which would mean cutting production for a second year.

    On the supply side, Rio, BHP and Vale have been sticking with their full-year production guidance even after soft Q1 results.

    BTC-USD +0.10%Apr. 25, 2022 8:49 AM ET14 Comments

    Bitcoin (BTC-USD) is falling to six-week trading lows Monday morning as investors pull out of stocks in the wake of aggressive Fed tightening.

    Ethereum (ETH-USD -2.6%) is also extending losses to its lowest since mid-March, standing at $2.86K, as all three major U.S. stock market indices point to a weaker opening.

    On a technical basis, bitcoin (BTC-USD -1.9%) is dipping to $38.8K and it's moving further away from its 200-day simple moving average, recently changing hands at $44.1K. But it still remains rangebound in a nearly four-month channel. Meanwhile, “Bitcoin looks to be breaking a pivotal minor two-month trend on Friday’s pullback that likely causes weakness down to test January lows,” said Fundstrat Technical Strategist Mark Newton, as reported by Bloomberg. He added that if BTC falls through $36.3K, that "should lead to a full retest of $32,950 without too much trouble.”

    While markets price in a 50-basis point rate hike at the Fed's upcoming May meeting, the percentage of bitcoins in supply that hasn't moved in one year is at an all-time high, digital asset broker GlobalBlock wrote in a note. In other words, "Bitcoin is being distributed from those who see it as a risk-on asset, to long-term holders who have strong conviction in Bitcoin’s long term potential," the note said.

    Note that BTC's maximum coin supply is capped at 21M. Out of that total, 19M have already been mined.

    Major cryptos falling the most include: solana (SOL-USD -3.9%), cardano (ADA-USD -3.1%), avalanche (AVAX-USD -4.1%), polkadot (DOT-USD -5.7%), NEAR protocol (NEAR-USD -7.7%), cosmos (ATOM-USD -6.5%), uniswap (UNI-USD -4.8%), algorand (ALGO-USD -4.7%) and ethereum classic (ETC-USD -4.9%). Both dogecoin (DOGE-USD +4.7%) and apecoin (APE-USD +6.6%) are trading in the green.

    Unsurprisingly, crypto-related stocks are sliding in premarket trading, with the largest percentage decliners being: Bitfarms (BITF-2.1%, Bakkt (BKKT) -4.1%, Bit Digital (BTBT-1.7%, CleanSpark (CLSK-1%, Coinbase Global (COIN-1.3%, HIVE Blockahin (HIVE-1.8% and Marathon Digital (MARA-1.3%.

    Previously, (April 23) Morgan Stanley said that Bitcoin's use as a currency may just be getting started.


  12. MSFT +0.47%Apr. 25, 2022 7:46 AM ET8 Comments

    Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL) are set to report quarterly earnings this week and investment firm Wedbush Securities believes the results from the two tech giants "could dictate the path of tech stocks over the coming months."

    Analyst Dan Ives, who rates Microsoft (MSFT) and Apple (AAPL) outperform, noted that the tech sector has split, with software, semiconductors, cyber security and product drive names leading the space higher.

    In conjunction, those who benefited from the work-from-home trends during the pandemic, such as Netflix (NFLX), Meta Platforms (FB), Zoom Communications (ZM) and DocuSign (DOCU) are likely to see their earnings multiples move lower as results come off their highs.

    "To this point, we are expecting strong numbers from both stalwarts Microsoft and Apple this week which would be much needed good news for the tech sector in this white knuckle time," Ives wrote in a note to clients.

    Microsoft (MSFT) shares fell slightly more than 1% to $270.97 in premarket trading, while Apple declined 1.5% to $159.30.

    Ives noted that Microsoft's (MSFT) cloud story is not slowing down, with "large transformational cloud deal" up more than 50% and it may be gaining market share from Amazon (AMZN) Web Services.

    "We are seeing deal sizes continue to increase markedly despite macro jitters as enterprise-wide digital transformation shifts are accelerating with CIOs all focused on readying their respective enterprises for a cloud driven architecture with [Microsoft] poised to beat Azure whisper growth numbers of ~45% this quarter," Ives wrote.

    For Apple (AAPL), China is still the growth engine, even as the country deals with a crippling outbreak of COVID cases, resulting in multiple lockdowns.

    Still, it's likely that Apple (AAPL) gained roughly 3% of the smartphone market in China over the past 12 months due to the iPhone 12 and iPhone 13, both which have 5G services. It's also possible that the company may benefit from higher average selling prices from China, which could help it drive further revenue gains.

    Nonetheless, a slowdown in China's economy has caused some investors to be concerned about slowing growth for Apple (AAPL) in the country, but Ives said there is still pent up demand for its products.

    "While the supply chains issues have curtailed some growth (~15 million iPhone units) for Apple over the past few quarters on this massive product cycle, we believe the pent-up demand story is still being underestimated by investors and will be a laser focus of the Street later this week," Ives added.

    Earlier this month, research firm Canalys said Apple (AAPLgained share in the smartphone market in the first-quarter, largely due to the "growing demand" for its iPhone 13.

    BABA -1.78%Apr. 25, 2022 7:14 AM ET18 Comments

    Alibaba (NYSE:BABA), JD.com (NASDAQ:JD), Baidu (NASDAQ:BIDU) and a number of other Chinese tech stocks slumped early Monday after China's zero COVID policy became stricter, further intensifying lockdown's in the world's most populous country and sending markets spiraling around the world.

    The CSI 300 Index fell nearly 5% on Monday, bringing the year-to-date decline to more than 22%, as China ordered more testing near Beijing and further locked down areas of the capital due to rising COVID-19 cases. It's likely that more cases will appear over the next several days, further adding to investors' woes.

    Alibaba (BABA), JD.com (JD) and Baidu (BIDU) all saw declines of at least 2.5%, led by Baidu's slump of nearly 5% in premarket trading.

    Other Chinese internet stocks, such as Pinduoduo (PDD), Bilibili (BILI), NetEase (NTES), Kingsoft Cloud (KC) and DiDi Global (DIDI) also declined between 2% and 5%.

    Alibaba (BABA) and other Chinese tech stocks have also had to deal with worries over increased regulation in recent days, including the news earlier this month that the Central Cyberspace Administration of China said it would start a two-month "special action" to curb illegal content on streaming and short video sites.

    Additional worries, such as regulators imposing heavy fines on DiDi (DIDI) for its U.S. initial public offering have also weighed on Chinese tech stocks.

    Earlier this month, Charlie Munger's Daily Journal Corp. (DJCO) disclosed it has cut its stake in the Chinese Internet and e-commerce giant Alibaba (BABA) in half.

    WYNN -2.46%Apr. 25, 2022 7:04 AM ET

    Macau casino stocks moved lower after developments in China over the weekend increased concerns that the COVID disruption will extend.

    Beijing is now a region of increased focus with authorities in the capital sealing off entrancing of public housing blocks and closing off entire streets with wire mesh fences, according to Reuters.

    Meanwhile, the Shanghai government reported 51 new COVID deaths on April 24, which marks the highest daily tally so far. The local government in Shanghai is using a tiered system that divides neighborhoods into three categories of restrictions based on the risk of transmission.

    On Wall Street, JPMorgan lowered estimates on Macau gaming stocks earnings estimate due to its earlier projection on the full reopening timeline looking to be too optimistic.

    In Hong Kong trading on Monday, Galaxy Entertainment (OTCPK:GXYEF) fell 2.26% and SJM Holdings (OTCPK:SJMHF) fell 4.24%. In the U.S. during the premarket session, there were drops for Las Vegas Sands Corp. (LVS-2.99%, Wynn Resorts (NASDAQ:WYNN-2.75%, MGM Resorts International (NYSE:MGM-2.29%, and Melco Resorts & Entertainment (NASDAQ:MLCO-1.65%.

    See Seeking Alpha Quant Ratings across the casino and gaming sector.

    TWTR +5.58%Apr. 25, 2022 6:19 AM ET77 Comments

    Things are getting serious over at Twitter (NYSE:TWTR) – at least according to the latest media reports. Elon Musk met with the crew in the C-suite on Sunday after Twitter went for the poison pill to block him from increasing his 9.2% stake. The ongoing drama saw Musk unveil a $43B bid for the social media platform only 10 days ago after declining a board seat, prompting the company to go on the defensive before shifting its posture towards striking a deal.

    What happened? Musk has lined up $46B in financing to fund a buyout ($25B in debt coming from investment banks and $21B in personal equity). He is also rallying Twitter (TWTR) shareholders, like Thrivent Asset Management, to support the takeover following private meetings on Friday. A bigger fear for the board could be a tender offer, which could reveal Twitter (TWTR) shareholder support for Musk's bid. While the poison pill would prevent them from tendering their shares (and require multiple years to gain board control), the company's negotiating hand would weaken significantly if it was shown to be going against its investor base.

    In the meantime, Twitter (TWTR) is still working on estimating its actual market value to compare it with Musk's "best and final" offer of $54.20/share. Executives also want breakup guarantees if the deal falls through, and are conducting due diligence into the regulatory investigations against Musk that could risk the deal being completed. The Tesla CEO has said he wants to "transform" Twitter (TWTR) into a "platform for free speech around the globe" by implementing improvements to its products and policies.

    Lack of movement: Twitter (TWTR) went public in 2013, but its shares have hardly moved in the eight-and-a-half years since hitting the market. While the company had priced its IPO at $26 per share, the first trade that regular investors could take part in came in north of $45. On Monday, Twitter shares are changing hands around $49 in premarket trading, up 7% from where Elon Musk first announced the potential takeover on April 14, but still 10% below his offer price.



  13. FB -0.23%Apr. 25, 2022 5:12 AM ET20 Comments

    Following marathon negotiations over the weekend, European lawmakers finally approved regulation that will force tech giants to monitor online content more aggressively. The Digital Services Act will compel companies like Meta (NASDAQ:FB), Twitter (NYSE:TWTR) and Google (NASDAQ:GOOG) (NASDAQ:GOOGL) to tell regulators exactly what they are doing to combat misinformation online and quickly rid their platforms of illegal content (such as incitement to terrorism and child sexual abuse). Tech giants will also be obligated to provide transparency about the algorithms they use to recommend content and can be required to take certain measures in the event of a crisis (like the Russian invasion of Ukraine).

    Bigger picture: The new proposal, set to come into force as early as 2024, is the second part of the EU's dual approach to protect internet users. The first, called the Digital Markets Act, has yet to be approved, but will go after the "unfair market dominance" of Big Tech. Failure to comply with the rules may result in a fine of up to 6% of a company's global annual revenue, meaning multibillion-dollar penalties for violations.

    This time around, there was even a big drive for an outright ban on "targeted advertising," though Google (GOOG) (GOOGL) and Facebook (FB) pushed back, arguing that it would end up hurting local businesses among other concerns. A compromise eventually came together banning the targeting of minors, or the use of gender, race or religion to target users. So-called dark patterns – manipulative schemes that drive people to click on content – will also be banned, while e-commerce players like Amazon (AMZN) will be obligated to prevent the online sale of illegal goods.

    Outlook: The European Union is the first bloc in the world to comprehensively put together a digital agenda for how tech giants should operate, starting with GDPR privacy rules back in 2018. In fact, the EU has already leveled a combined €8.2B in fines against Google (GOOG) (GOOGL) over antitrust violations, and has several active investigations into Amazon (AMZN), Apple (AAPL) and Meta (FB). Lawmakers in the U.S., Canada and elsewhere are also looking to copy some of the key aspects of the EU's tech regulation to protect user rights and prevent a fragmentation of the internet.

    Apr. 25, 2022 4:01 AM ET67 Comments

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

    Military aid

    The U.S. pledged another $322M in military financing to help Ukraine, bringing the total amount of American military assistance to $3.7B since the war began on Feb. 24. The U.S. also earmarked $400M to 15 other allied and partner nations in Central and Eastern Europe that have been impacted by the conflict. The announcement follows a high-level meeting between Ukrainian President Volodymyr Zelenskyy and U.S. Secretary of State Antony Blinken and Defense Secretary Lloyd Austin.

    No agreement yet

    "An import stop for oil and gas or a punitive tariff would be important to put pressure on Vladimir Putin and bring him to the negotiating table," Josep Borrell, the EU's top diplomat, told German newspaper Die Welt. "But at the moment we in the EU do not have a unified position on this question, while a final proposal for an embargo on oil and gas is not yet on the table."

    NFLX -4.55%Apr. 24, 2022 4:02 PM ET64 Comments

    Nielsen Gauge for march 2022

    Total television usage declined in March, but streaming's share of that usage hit a new high, moving up to near 30% of total use.

    Both streaming and cable grew share in March at the expense of gaming and broadcast TV – which withdrew a bit with the wrap-up of the Super Bowl and Olympics – according to "The Gauge" from Nielsen, its monthly macro look at TV delivery platforms.

    Overall usage made a typical seasonal drop of about 4.2%. But the biggest part of that drop came for broadcast TV and for the "Other" category, which is heavily videogaming, but also includes activities like watching video discs.

    Cable's share of TV usage bumped up to 36.9% from the prior month's 35.4%, no doubt aided by a bump for cable news alongside Russia's war in Ukraine. Broadcast share dipped to 24.9% from 26%, with sports viewing down 53% month-over-month (and the share of "sports event programming" in viewing fell to 12% from almost 25%). And "Other" use fell to 8.4% from 10%.

    That left Streaming to bump its share to 29.7% from 28.7% the month before – and with broad gains for its components. After dipping last month, individual leader Netflix (NASDAQ:NFLX) bumped up to 6.6% share from 6.4%; YouTube (NASDAQ:GOOG) (GOOGL) moved up to 6.0% from 5.7%; Hulu (NYSE:DIS) (CMCSA) bumped to 3.3% from 3.0%; Amazon Prime Video (NASDAQ:AMZN) was flat at 2.3%; and Disney+ went to 1.8% from a prior 1.7%.

    Niche services continue to gain as well, with "Other streaming" bumping its combined share to 9.8% from February's 9.5%. That category includes small services such as Crackle (CSSE) as well as linear streamers like Spectrum (CHTR), DirecTV and Sling TV (DISH).

    Turning to the weekly top 10 in streaming viewing time, it turns out Bridgerton is still the king. Netflix (NFLX) dropped its second season of the hit show March 25, and just a few days in the week were enough for it to stream a giant 2.547 billion minutes in the most recently Nielsen weekly ratings (for March 21-17).

    Bridgerton was at the vanguard of a big streaming week for Netflix: It was trailed in the overall ratings by fellow Netflix offerings The Adam Project (1.199 billion minutes) and Is it Cake? (1.185 billion minutes).

    Just behind them was a film cooling off after its own hot streak, Disney's (DISTurning Red, which streamed 977 million minutes. Disney's holiday hit Encanto is still hot as well, seventh-best overall with 719 million minutes streamed.

    Aside from those two Disney entries, Netflix held the other eight of the top 10 program slots.

    Pay TV distributors: Comcast (CMCSA), Charter (CHTR), Dish Network (DISH), Verizon FiOS (VZ), Optimum/Suddenlink (ATUS), Atlantic Broadband (OTCPK:CGEAF), Sparklight (CABO).

    Relevant local broadcast tickers: Nexstar Media Group (NXST), Sinclair Broadcast Group (SBGI), Gray Television (GTN), Tegna (TGNA), E.W. Scripps (SSP). National broadcasters: ABC (DIS), NBC (CMCSA), CBS (PARA) (PARAA), Fox (FOX) (FOXA). And some ad-tech names tied to connected TV: The Trade Desk (TTD), Magnite (MGNI), PubMatic (PUBM), Criteo (CRTO), Roku (ROKU).

    Netflix (NFLX) investors have had a week to remember, after the stock lost more than a third of its value after a second straight disappointing earnings report.


  14. JPM rallying the troops

    Significant inflows in equities this week should help the stock market rally and recover the sharp losses of the week before, J.P. Morgan says.

    "We see risks skewed toward a near-term equity rally given weak investor sentiment, low positioning, systematic strategy buying, seasonality, and oversold conditions," strategist Marko Kolanovic wrote in a note Monday.


  15. Thoughts on NFLX?  Despite the "losing subscribers" issue .. the business looks sound! With a P/E of 18 at the current price .. starting to look interesting.  I was thinking of selling puts (150s) and could do the 1/2024 200/300 BCS for $25ish .. so effectively in for $4 with risk that NFLX goes below 150.  Thoghts?


  16. JPM – Gotta drive those dip-buyers back in so their clients can cash out.

    /NG popping, /GC just getting back over $1,900 – /CL back over $98.50 already.

    NLFX/Nom – I like them down here but I'd wait and make sure they show a bit of support before jumping in – that's a very ugly chart – doesn't look done.

    GLD -1.70%Apr. 25, 2022 2:57 PM ET

    Gold futures fell Monday to their lowest finish since late February, hurt by the prospect of aggressive policy tightening by the Federal Reserve and a stronger dollar.

    "Fears about rate hikes have gotten the upper hand as of late," Julius Baer analyst Carsten Menke told Reuters, adding that gold has become "rather expensive as a safe haven asset.

    June Comex gold (XAUUSD:CUR) closed -2% to $1,896/oz, the lowest finish for a most-active contract since February 25, while May silver (XAGUSD:CUR) ended -2.4% to $23.67/oz, its lowest settlement since February 16.

    ETFs: (NYSEARCA:GLD), (NYSEARCA:GDX), (IAU), (NUGT), (PHYS), (SGOL), (SLV), (SIVR), (PSLV)

    "In the depths of a true equity bear market, and now a broadening China lockdown also spreading, gold has not maintained safe-haven interest," Wolfpack capital's Jeff Wright told MarketWatch, noting gold is a non-interest bearing vehicle in an environment of rising U.S. Treasury yields.

    "Gold's inability to benefit from falling stock markets is a reflection of how difficult it will be for gold to make significant gains given the interest rate outlook outlined by the Federal Reserve last week," according to Kinesis Money's Rupert Rowling.

    Separately, Newmont (NEM) and Barrick Gold (GOLD) are -2.1% and -3.7%, respectively, as Bernstein analysts downgraded the stocks to Market Perform from Buy, "given the equity leverage to gold price which is at levels we don't believe can be sustained."

    Palladium settled -10.7% Monday at $2,122.10/oz after plunging as much as 13% intraday.

    WOW!: 

    TWTR +5.53%Apr. 25, 2022 2:51 PM ET38 Comments

    Twitter (NYSE:TWTR) and its board have come to a sale agreement with Elon Musk for $44 billion – giving in to a relatively rapid hostile courtship from the eccentric billionaire.

    Twitter (TWTR) shares were halted at 2:41 p.m., with the stock up 5.5% to $51.63/share.

    It was unanimously approved by Twitter's board, and the deal is expected to close in 2022. Twitter will go private in the deal.

    The deal is for $54.20/share in cash, Musk's first (and also "best and final") offer.

    That price marks a 38% premium to Twitter's closing price on April 1, the last session before Musk disclosed a 9% stake in the company.

    "The Twitter Board conducted a thoughtful and comprehensive process to assess Elon's proposal with a deliberate focus on value, certainty, and financing," says Twitter Chair Bret Taylor. "The proposed transaction will deliver a substantial cash premium, and we believe it is the best path forward for Twitter's stockholders."

    Musk speaks: "Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated," he says. "I also want to make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spam bots, and authenticating all humans. Twitter has tremendous potential – I look forward to working with the company and the community of users to unlock it."

    Musk had reportedly lined up $46.5 billion in committed financing, including $21 billion in equity commitment from Musk himself. The newly agreed deal has no financing conditions.

    Musk and Twitter's team reportedly worked through Sunday night into Monday, likely finalizing walk-away details around the acquisition plan.

    The company adopted a "poison pill" takeover defense on April 15, but by Sunday night it had changed stances to re-examine Musk's offer, with no "white knight" bidder in the wings.

    Twitter will report earnings before the open on April 28 - but with a go-private plan in place, it's canceled its earnings conference call.

    People are just too friggin' rich.  It's ridiculous that a single person is able to do this.


  17. Hey, on the bright side, it is  a great leap forward for an African American entrepreneur :)


  18. Beware the false rally


  19. DDS market cap creeping back up…


  20. DDS/Pman – Too rich for my blood.  They have 300 stores, KSS has 1,100 for $7.4Bn and they are dropping $900M to the bottom line.  DDS is $5Bn at $284 with $300M in profit but no debt is nice.  KSS has a manageable $2.5Bn.  Seems like SPG is buying KSS at $8.6Bn – about 20% higher than it's trading.

    They were giving both of them away 2 years ago.



  21. African American/pstas  Was that an attempt at humor?  Tsk, tsk….