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Will We Hold It Wednesday – Fed Edition

It's Fed day! 

It's also Star Wars Day – celebrate what you like.  I can see some future Donald Trump saying "Yes, today is the day we celebrate the great Greg Lukos, who envisioned our great Galactic Empire and I will build a big, beautiful Death Star to wipe out our enemies – especially the ones that are hiding in Congress.  Don't worry, I've made a list of them and we are already negotiating with Russian contractors to build our Death Star, who have promised us the biggest kickbacks – a great deal, to begin work as soon as they have finished counting the votes for our current election."  

Back to the present.  We got the bounce we expected yesterday, back to the weak bounce line at 4,180 and we're testing it this morning but there's nothing impressive about a weak bounce in the same way there's nothing impressive about a ball bouncing after you drop it.   The bounce is no indication at all that it's going to go higher – that requires an additional catalyst and the market requires the same thing.

In reality, we are 7.5% below the 200-day moving average than that means that each day we do not improve, the 200-day moving average comse down 0.0375% or 1.68 points.  We are at 4,491 now so tomorrow, unless we have a fantastic day, the 200 dma will be at 4,489.  If we look closely at the chart, we can see the Death Cross occurred at about 4,470 so we have 2 weeks to get back over the 200 dma before very serious technical damage occurs and the 200 dma is in clear decline.  

Editorial Cartoons for Saturday & Sunday from Times Wire ServicesTHAT is how you use a chart!  NOT to GUESS where things might go but to calculate the probability of where the chart will be in the future – so we know what the TA sheeple will "discover" long before they discover it themselves.  Do we have sufficient fuel to push the S&P 7.5% higher to stop the 200 dma from creating a worse chart in the next few weeks?  Earnings have been very iffy so far and keep in mind May 15th is halfway through Q2 and the situations have not improved so no help there. 

Inflation is still a thing, the War rages on and Congress is now consumed with the abortion battle – so no help there either.  Oil is $106 this morning and Natural Gas is $8.33 – have fun heating those pools!  The only thing the technicals have going for them are the technicals – which are currently indicating oversold but that means – if we can't get back to at least the Strong Bounce Line at 4,320 and the 50 dma at 4,374 (and falling fast), then we are certainly screwed and it will be time to cash out because hedges may not be able to help us enough to stick with what we have.  

We added $560,000 worth of additonal protection in our Short-Term Portfolio yesterday, in our Live Member Chat Room, so our Long-Term Portfolio is now backed up by $2M worth of hedges – and it's "only" a $2M portfolio!  Still, we don't just sit by and watch the money drain out of our positions so we're wathing the developments of the rest of this week very closely.  Don't forget, Non-Farm Payrolls are Friday but that's minor compared to the OPEC meeting and the Fed meeting.

Though the Fed has hinted at a 0.75% increase, I don't think Powell has the balls to pull the trigger on that and 0.5% will be somewhat of a relief – until the minutes come out and people see that most of the Fed thinks we are not doing near enough to fight inflation.  Anyway, so we have a very strong technical push to get back over the strong bounce line (4,320) to at least the 50 dma (4,374) and what we're really looking for is a failure to do so – THAT would cause us to get much more bearish.

Otherwise, we're content to be well-balanced in our portfolios as we watch earnings season move into its more manic phase.  

Speaking of manic – how's that ignoring Covid thing working?

Getting great again!  

 


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

    https://attendee.gotowebinar.com/register/8958646343597085195


  2. Good Morning.


  3. Good morning! 

    Dollar off the highs and the VIX below 30 so it will be very pathetic if we can't turn in some gains.  

       

        

     

       


  4. A lot of punishment being dished out for earnings reports this morning.  

    TWTR -0.08%May 04, 2022 9:36 AM ET1 Comment

    A UK parliamentary committee has invited Elon Musk to give evidence about his plans to buy Twitter (NYSE:TWTR), but the billionaire is looking to hold off the inquiry for now.

    Parliament's digital committee is looking for details "in more depth" on Musk's plans for the company.

    “I am honored and thank the Parliament for their invitation, but it would be premature at this time to accept, given that there has not yet been a shareholder vote," Musk said in email.

    The lawmakers are seeking the evidence as they're going over draft online safety legislation and want to know about Musk's plans in that area – particularly user authentication, which falls in line with their own recommendations to the government.

    The draft legislation includes a requirement for the biggest social media platforms to give users an option to verify their identity, as well as allowing them to choose not to interact with unverified users – a move that could offer protection from spam and "robot" accounts.

    Musk's initial tweets after reaching the $44 billion deal with Twitter laid out some broad strokes including plans to "authenticate all humans."

    Reports yesterday said that Musk is telling potential equity investment partners that he plans to take Twitter public again perhaps within three years.

    F -0.10%May 04, 2022 9:25 AM ET6 Comments

    • Ford Motor (NYSE:Freports U.S. sales declined 10.5% to 176,965 vehicles in April.
    • Truck sales down 17.8% Y/Y to 79,768 units, Cars sales down 57.7% Y/Y to 4,388 units, Electrified vehicles sales +50.2% Y/Y to 16,779 units and SUVs +2.7% Y/Y to 92,809 units.
    • Total retail sales -12.3%: Truck -16.3%, Electrified vehicles +55.1% and SUV -2.5%.
    • Sales of Ford electric vehicles increased 139% Y/Y on the strength of Mustang Mach-E and E-Transit sales, while the first shipments of all models of the all-new F-150 Lightning are underway.
    • E-Transit sales increased 62.3% over March, while Mustang Mach-E had its best monthly sales performance since it was launched, with sales up 95% over last year.
    • “While industry semiconductor chip shortages persist, improved inventory flow in April delivered a significant share gain of 1.0 percentage point over a year ago with Ford outperforming the industry. Inventory flow bolstered stronger F-Series, Mustang Mach-E, E-Transit and record April Ford brand SUV sales. We are now shipping all models of the electric F-150 Lightning.” – Andrew Frick, vice president, Sales, Distribution & Trucks

    AETUF +5.27%May 04, 2022 9:25 AM ET1 Comment

    Cheniere (LNG) reported Q1 earnings ahead of the market open Wednesday, lifting free cash flow guidance by 26% and locking in supply for Corpus Christi expansion:

    • Earnings – the Company lost $3.41 per share in the first quarter, largely as a result of non-cash derivative impacts which made results incomparable with Street estimates.
    • Guidance – consolidated EBITDA guidance was lifted 16.6% to $8.5b (midpoint) for 2022; distributable cash flow guidance was lifted 26% to $5.8b (midpoint) for 2022.
    • Supply – management signed a 15yr deal with ARC (OTCPK:AETUF) to supply 0.9mtpa of gas to Corpus Christi on JKM-linked pricing.

    CEO Fusco said, "today we are raising our 2022 financial guidance due to the sustained strength in global LNG markets and an increase in expected LNG production … we expect to complete the remaining steps necessary to reach FID on Corpus Christi Stage 3 in the coming months."

    Cheniere (LNG) is generally viewed as a low-risk way to gain exposure to the increasingly bullish LNG export theme; however, with $5.8b of distributable cash flow in 2022, the free cash flow yield of ~17% compares favorably to broader equity indices, and many un-contracted, large-cap energy peers.

    TUP -30.04%May 04, 2022 8:44 AM ET1 Comment

    Tupperware Brands Corporation (NYSE:TUP) shares crashed on Wednesday as the trajectory of its core business comes into question.

    Shares fell by more than 25% in pre-market trading. The decline would mark the largest one-day drop since March 16, 2020 if the losses hold.

    The Florida-based purveyor of plastic household products reported a big miss on profits while also coming up short on revenue expectations. The deep disappointment on earnings was led by a 16% drop in net sales from 2021 and a 720 basis point contraction in gross margins.

    "We exited 2021 encouraged that our Turnaround Plan was on track, however with today's results we acknowledge that this turnaround still requires a lot more work," CEO Miguel Fernandez said. "Results came in below our expectations due to a combination of external and internal factors.”

    He cited the Russia/Ukraine conflict, COVID lockdowns in China, inflation, and internal execution issues as the key culprits for the inauspicious earnings result. He added that steep price increases are difficult for the company to pass through to consumers. In truth, it would be difficult to name factors impacting consumer products companies that were not called out by Fernandez.

    Based on the bearish result for the first quarter, the company indicated it no longer believes it will achieve its full year targets and has therefore decided to withdraw its previously issued guidance.

    “This quarter illuminated elements within our core direct selling business that still require fundamental improvement, and we are refocusing our efforts to address them,” he said. “Due to the high degree of operational uncertainty we currently face, we have decided to withdraw our previously issued financial guidance for 2022.

    Despite the significant issues in execution, the company has elected to continue its share repurchase program authorized in early 2021. Wednesday’s earnings release revealed a $75 million accelerated share repurchase program to be completed by the end of June 2022.

    TUP Long Call 2024 19-JAN 15.00 CALL [TUP @ $17.91 $0.00] 30 2/28/2022 (625) $22,500 $7.50 $0.40 $7.50     $7.90 $0.00 $1,200 5.3% $23,700
    TUP Short Call 2024 19-JAN 25.00 CALL [TUP @ $17.91 $0.00] -30 2/28/2022 (625) $-12,000 $4.00 $0.85     $4.85 $0.00 $-2,550 -21.3% $-14,550
    TUP Short Put 2024 19-JAN 13.00 PUT [TUP @ $17.91 $0.00] -20 2/28/2022 (625) $-6,000 $3.00 $-0.05     $2.95 $0.00 $100 1.7% $-5,900

    t's not a big deal but when we get hit like that on "steady" stocks like TUP, then nothing is safe and we need to strongly consider the benefits of CASH!!!  Now it's back to where we came in.  


  5. NVTA -8.71%May 04, 2022 8:31 AM ET

    ABNB +7.31%May 04, 2022 8:30 AM ET

    More losers than winners and more intensity on the loser side – NOT GOOD!  

    WING -1.24%May 04, 2022 8:21 AM ET

    Wingstop (NASDAQ:WING) shares are diving after an earnings disappointment on Wednesday.

    The Texas-based restaurant operator reported non-GAAP EPS of $0.34 missing expectations by two cents while revenue of $76.21 million also came up short of analyst consensus by $9.95 million.

    Costs rose notably in the quarter largely due labor cost as well as inflationary impacts that drove a 14.2% increase in the cost of bone-in chicken wings as compared to the prior year period. Overall cost of sales increased to 81.9% from 75.6% in the prior year period.

    Shares fell more than 8% in pre-market hours shortly after the print.

    Nonetheless, management voiced confidence in the road ahead and reiterated expansionary plans beyond the 13.4% jump in restaurant openings reported in the first quarter.

    "Our first quarter 2022 results reflect the strength and momentum in our global development with a record 60 net new restaurant openings," CEO Michael Skipworth commented. "Our strategic growth levers and proactive investments in technology have positioned our brand for continued long-term growth as we continue executing against our vision to become a Top 10 Global Restaurant Brand."

    Read more on analyst confidence in the company despite its tough year-over-year comparisons.

    May 04, 2022 8:15 AM ET2 Comments

    • ADP Jobs Report: +247K vs. +398K consensus and +479K prior (revised).
    • “In April, the labor market recovery showed signs of slowing as the economy approaches full employment,” said Nela Richardson, chief economist, ADP. “While hiring demand remains strong, labor supply shortages caused job gains to soften for both goods producers and services providers. As the labor market tightens, small companies, with fewer than 50 employees, struggle with competition for wages amid increased costs.”
    • Jobs gain of 247K is lowest in the year.
    • Service providing sector added 202K, while manufacturing added 46K jobs.

    Does not bode well for NFP. 


  6. silver zi did a rip down.


  7. MAR +3.83%May 04, 2022 7:43 AM ET

    Marriott International (NASDAQ:MAR) is adding to the chorus of bullish forecasts on summer leisure on Wednesday.

    "Globally, robust demand trends continued in April, and going forward we expect leisure travel to remain strong, business travel to accelerate and cross border travel to gain momentum, supporting solid [average daily rate] performance,” CEO Anthony Capuano said. “In the U.S. & Canada, we reached a milestone in April, as we estimate that RevPAR for the month was fully recovered to 2019 levels.”

    He added that the return to pre-pandemic levels in major markets is increasing optimism that financial results will recover back to 2019 levels soon as well. The only hangup in terms of RevPAR trends was noted in Greater China as lockdowns understandably weigh on business.

    The comments add to an overall encouraging hotel operator, which printed a big beat on profits and only narrowly missed revenue estimates. Non-GAAP EPS for the first quarter reached $1.25, pushing past estimates by $0.33 while revenue at $4.2 billion came short of expectations by only $30 million.

    Shares rose about 2% in pre-market hours.

    Elsewhere, management announced the resumption of shareholder return programs from their pandemic-driven suspension. The step comes sooner than had been initially forecast due to solid results, Capuano explained.

    "Our focus on maximizing cash flow, managing expenses, and improving our credit profile, combined with strong first quarter results, has resulted in our Board of Directors declaring a $0.30 per share quarterly cash dividend payable at the end of the second quarter,” he said. “Assuming the demand environment continues to improve and that we are within our target leverage ratio range, we also would expect to resume share repurchases in 2022.”

    In terms of spending, the Bethesda-based hospitality chain is also adding to property holdings. During the first quarter, 75 properties were added against 16 exited. The development pipeline stands at 2,878 properties, or more than 489,000 rooms.

    Read more on the AirBnB’s similarly rosy demand forecasts.

    LYFT -32.23%May 04, 2022 7:41 AM ET10 Comments

    Lyft (NASDAQ:LYFT) shares plunged on Wednesday after the ride-sharing company posted quarter results that topped expectations, but issued weak guidance and said it was increasing spending to attract more drivers to its platform, a move that several analysts said would not please investors.

    Wedbush Securities analyst Dan Ives and Ygal Arounian, who rate Lyft (LYFT) shares outperform, lowered the per-share price target to $32 from $50, noting that the company's "80's rock star" mentality of high spending on driver incentives and heavy investing in its platform won't fly with investors at the moment.

    "As a negative, Lyft is spending money like a 1980s Rock Star and this will have a violent negative reaction from investors in an already jittery market," Ives wrote in a note to clients.

    Lyft (LYFT) shares fell more than 25% to $22.95 in premarket trading on Wednesday.

    Competitor Uber Technologies (NYSE:UBER) shares fell nearly 0.5% after it released first-quarter results on Wednesday and revenue topped Wall Street's expectations.

    In addition, Arounian noted that investor "patience is wearing thin" on Lyft (LYFT) but caveated that the sharp decline in shares was a "severe overreaction."

    Lyft (LYFT) said it generated $55 million in EBITDA during the first-quarter and $876 million in revenue, up 44% year-over-year, as ride volumes bounced back later in the quarter, despite the rise of the Omicron variant and sub-variants.

    However, the company said it expects EBITDA to be between $10 million and $20 million in the second-quarter, with revenue between $950 million and $1 billion, compared to estimates of $83 million and $1.02 billion, respectively.

    As a result, Susquehanna analyst Shyam Patil downgraded Lyft (LYFT) to neutral from positive and lowered the per-share price target to $25, noting that the softer near-term outlook, increased investments and a number of broader concerns "are likely to weigh on shares in the near-term, causing us to move to the sidelines."

    RBC Capital Markets analyst Brad Erickson called the results "tough" and noted that the earnings call was even "tougher," but also noted that the sharp drop was "overdone."

    Erickson, who lowered the per-share price target to $42, noted that Lyft's (LYFT) revenue, excluding incentives, is "likely tracking ahead of Street estimates coming in indicates likely strength beyond [second-quarter], management sticking to FY acceleration."

    In April, investment firm New Street Research said a merger between Lyft (LYFT) and DoorDash (DASH) made sense, noting the businesses complement each other.

    While Wedbush Securities and Susquehanna had Buy/Outperform ratings on Lyft, Seeking Alpha contributors were less bullish than the Wall Street analysts, and Seeking Alpha's quant rating on the stock was a hold.

    MRNA -1.82%May 04, 2022 7:37 AM ET4 Comments

    Moderna (NASDAQ:MRNA) shares have added ~8% in the pre-market Wednesday after the vaccine maker’s revenue for the first quarter of 2022 stood well ahead of forecasts driven by better than expected COVID-19 vaccine sales.

    Beating estimates by as much as $1.7B, total revenue for the quarter reached $6.1B from $1.9B in the prior year period, mainly due to increased product sales. The company’s COVID-19 vaccine branded as Spikevax made up $5.9B sales ahead of ~$5.1B in the consensus. Meanwhile, the grant revenue dropped ~35% YoY to $126M compared to $43.6M in the consensus.

    Net income for the quarter reached $3.7B from $1.2B in 1Q 2021, when Moderna (MRNA) recorded the first quarterly profit. Meanwhile, the cash and equivalents at the end of the period improved from 2021-year end to $19.3B, indicating ~10% rise.

    In terms of the outlook, the Cambridge, Massachusetts-based biotech reaffirmed the advance purchase agreements it signed for 2022, valued at approximately $21B.

    On the clinical front, Moderna (MRNA) said that it expanded its previous EUA submission at the request of the FDA for the use of the vaccine in the adolescent age group at two-dose 100 μg primary series. The additional submissions would be completed in about two weeks, the company noted.

    Chief Executive Stéphane Bancel said that the company looks forward to three respiratory commercial launches over the next two to three years, starting from the fall of 2022.

    “In the second quarter, we expect to have four programs in late-stage Phase 3 studies including our Omicron-containing bivalent COVID booster, seasonal flu, RSV and CMV vaccine candidates,” he added. The earnings call is scheduled at 8:00 a.m. ET today.

    Read: With its first quarter financials Tuesday, rival vaccine maker, Pfizer (PFE) chose to keep its guidance for COVID-19 franchise intact.

    Yay!

    EAT -14.80%May 04, 2022 7:15 AM ET1 Comment

    Brinker International (NYSE:EAT) shares are sliding sharply on Wednesday after reporting margins squeezed by inflation, labor costs.

    For its fiscal third quarter, the operator of Chili's Grill & Bar and Maggiano's Little Italy reported non-GAAP EPS of $0.92, 11 cents below the bar set by Wall Street at $1.03, and revenue that edged out estimates by just $2.32 million at $980.4 million.

    "Brinker's strong brands and industry-leading value proposition helped deliver another solid quarter, all while continuing to navigate some of the most challenging commodity and labor cycles many of us have ever seen," CEO Wyman Roberts said. "Despite these near-term obstacles, we are well positioned to increase our investment in both Chili's and Maggiano's, significantly expanding our restaurant development while leaning further into technology to improve our performance and guest experience."

    Detailed financial results released alongside the headline figures reveal that the quarter was indeed challenging in terms of pressure on profits. Operating income as a percentage of total revenues fell to 5.0% as compared to 6.3% in the quarter while operating margin decreased to 12.2% as compared to 13.9% in 2021.

    Shares fell nearly 13% in pre-market trading as inflationary impacts overshadowed the earnings result.

    Nonetheless, moving forward, management reaffirmed its previous guidance. Revenue estimates for the full year stand at $3.75 billion to $3.85 billion, in line with analyst consensus. Diluted EPS forecasts of $3.05 to $3.30, meanwhile, fell short of estimates at $3.48.

    Read more on the state of the restaurant space during a busy earnings season.


  8. /SI/Tommy – Just re-testing support at $22.20 so far but not predictable on a Fed day.  

    GOLD -0.22%May 04, 2022 7:11 AM ET

    Barrick Gold (NYSE:GOLD+0.4% pre-market on Wednesday after reporting reduced Q1 earnings and revenues but not as much as Wall Street analysts had forecast, and saying it remains in line to achieve its targets for 2022.

    Q1 net income fell to $438M, or $0.25/share, from $538M, or $0.29/share, in the year-earlier quarter; adjusted earnings slipped to $463M, or $0.26/share, from $507M, or $0.24/share, a year ago.

    Q1 revenues slid 3.5% Y/Y to $2.85B, slightly ahead of consensus, while cost of sales increased 1.6% to $1.74B.

    Q1 gold production fell 10.1% to 990K oz from 1.1M oz in the year-ago quarter, in line with analyst expectations, hurt by lower output at its Carlin and Cortez mines in Nevada, while the company's realized gold price rose to $1,876/oz from $1,777/oz.

    "As guided earlier, Q1 was a softer quarter, particularly when compared to Q4 2021, which included a record-breaking performance from Nevada Gold Mines," the company said. "With a stronger performance expected in the second half of the year, Barrick remains on track to meet its 2022 production guidance."

    For FY 2022, Barrick (GOLD) still forecasts gold production of 4.2M-4.6M oz at all-in sustaining cost of $1,040-$1,120/oz.

    Barrick (GOLD) also doubled its quarterly dividend to $0.20/share, including a $0.10/share performance dividend, with the new dividend payable June 15.

    Barrick's (GOLD) price return has increased 18% YTD and is roughly breakeven during the past year.

    The fact that they are controlling their production costs makes them an even better inflation hedge.  They are making about $700/ounce now at $1,825 – at $2,000, they make $875(ish), which is 25% more.

    SBUX +6.49%May 04, 2022 7:08 AM ET13 Comments

    Starbucks Corporation (NASDAQ:SBUX) rallies after the coffee chain's conference call and analyst commentary helped take the sting off the slowdown in China and pulled guidance for FQ3 and FQ4.

    CEO Howard Schultz talked up the Starbucks Web 3.0 strategy and pointed to record demand in the U.S. during the earnings call.

    "Looking ahead, trying to imagine thousands of vastly more productive and efficient Starbucks stores reconfigured to align with today's customer behavior and built around technology that will deliver increased speed of service, improved labor management and reduced unit cost, an elevated partner and customer experience," updated CEO Howard Schultz.

    He also reiterated that stores with union will not have the same level of improvements and employee benefits as stores without a union.

    Starbucks (SBUX) plans to set financial targets and update on capital allocation plans at an Investor Day event in September.

    Analysts were cautiously optimistic about the balance of the SBUX, while staying generally bullish on the longer term track.

    "We remain confident in the long term story given the strength of the U.S. sales playbook and long term development opportunity in China given strengthened new unit economics prior to the recent COVID-19 wave. However, we expect shares to remain subdued in the near term as the company paves the way for a new CEO hire later in 2022 & investors can gain more confidence in 2023-24," commented Cowen analyst Andrew Charles.

    Shares of Starbucks rose 6.01% premarket to $78.80 after initially turning negative when the earnings report dropped.

    Dig into the Starbucks earnings call transcript

    YUM -0.71%May 04, 2022 7:03 AM ET1 Comment

    • Yum! Brands press release (NYSE:YUM): Q1 Non-GAAP EPS of $1.05 misses by $0.02.
    • Revenue of $1.55B (+4.0% Y/Y) misses by $40M.
    • Worldwide system sales grew 8%, excluding foreign currency translation, with KFC at 9%, Taco Bell at 8% and Pizza Hut at 3%.
    • The company added 997 gross units during the first quarter resulting in 628 net-new units and 6% unit growth year-over-year.

    UBER -10.32%May 04, 2022 7:01 AM ET13 Comments

    • Uber press release (NYSE:UBER): Q1 EPS of -$3.04 may not be comparable to consensus of -$0.11.
    • Net loss attributable to Uber Technologies, Inc. was $5.9 billion, which includes a $5.6 billion headwind (pre-tax) relating to Uber’s equity investments, primarily due to aggregate unrealized losses related to the revaluation of Uber’s Grab, Aurora, and Didi stakes. Additionally, net loss includes $359 million in stock-based compensation expense.
    • Revenue of $6.9B (+137.9% Y/Y) beats by $800M.
    • Shares -3%
    • Gross Bookings of $26.4 billion, up 35% year-over-year, and above the high-end of the guidance range
    • Monthly Active Platform Consumers: 115M
    • Trips 1713M
    • For Q2 2022, we anticipate:

      • Gross Bookings of $28.5 billion to $29.5 billion
      • Adjusted EBITDA of $240 million to $270 million


  9. MRNA -1.49%May 04, 2022 6:53 AM ET11 Comments

    • Moderna press release (NASDAQ:MRNA): Q1 GAAP EPS of $8.58 beats by $3.37.
    • Revenue of $6.1B (+214.4% Y/Y) beats by $1.67B.
    • The increase in 2022 was primarily due to increased product sales. Product sales for the first quarter of 2022 were $5.9 billion from sales of the Company's COVID vaccine, compared to $1.7 billion in the first quarter of 2021.
    • Shares +2.7% PM.
    • Moderna reiterates its 2022 signed advance purchase agreements of approximately $21 billion
    • FY22 Outlook
    • Research & Development (R&D) and Selling, General & Administrative (SG&A) Expenses : Full year expenses expected to be approximately $4 billion.
    • Tax Rate: The Company expects an effective tax rate for the full year in the mid-teen percentage range.
    • Capital Expenditures: Expect capital investments for 2022 in the range of $0.6-$0.8 billion.
    • Cost of Sales: Cost of sales as percentage of product sales are expected to be in the low-to-mid 20s percentage range.

    Who doesn't love Biotech?  

    Everyone, apparently….


  10. Wow, 13,000 isn't good support – that's a problem.

    Oil headline build but net 3.2Mb draw should be supportive over $102.50.

    I told you Wordle was a good buy for NYT:

    NYT +2.15%May 04, 2022 10:28 AM ET

    The New York Times Co. (NYSE:NYT) is 3.1% higher out of Wednesday's market open after it topped profit expectations and got a huge user boost from its acquisition of a popular word game.

    Revenue was a rare miss, up 13.6% to $537.4 million vs. an expected $543.5 million. And operating profit fell to $6.3 million from $51.7 million, mainly due to one-time costs in acquiring The Athletic (which closed Feb. 1).

    Adjusted operating profit at New York Times Group was mainly unchanged at $67.7 million.

    Subscription revenues jumped both on growth in number of digital-only subscriptions as well as a migration to higher prices from introductory promotional pricing, the company notes.

    Meanwhile, an acquisition of daily word game Wordle brought "an unprecedented tens of millions of new users to The Times, many of whom stayed to play other games."

    The quarter was NYT's best Q1 for subscription growth since the launch of the digital subscription model, outside of Q1 2020, with net adds of 387,000 digital subscribers (including The Athletic after that deal closed).

    The adds bring NYT to 9.1 million total subscribers, with 10.4 million total subscriptions. Of the 9.1 million subscribers, 8.33 million were paid digital-only, with 9.62 million paid digital-only subscriptions. The Athletic brought 1.1 million subscribers with 1.23 million subscriptions.

    Revenue by segment: Subscription, $372 million (up 13%); Advertising, $116.3 million (up 19.7%); Other, $49.2 million (up 5%).

    Adjusted operating costs rose 17.7% to $476.5 million, amid higher technology investments.

    At quarter-end, the company had cash and marketable securities of $474.8 million, down from $1.07 billion as of Dec. 26 (About $550 million went to buy The Athletic). The company also has an undrawn $250 million revolving line of credit.

    After February's authorization of $150 million in stock repurchases, the company bought back $29 million in shares, leaving $121 million in the authorization.

    For Q2 (including The Athletic) it sees digital-only subscription revenues rising 16-18% (and total sub revenues up 7-9%); and digital ad revenues flat to down low single digits (and total ad revenues up 2-5%).

    Not cheap though – 30x earnings and less and less people every day smart enough to read them.

    Speaking of papers – Neither the WSJ or the NYT had the war on the front page already (other than small article).  Not even 3 months and not at all resolved and it's already forgotten….

    Good article gaming he logic to the leaked Supreme Court decision.  

    AKAM -11.74%May 04, 2022 10:10 AM ET

    Akamai Technologies (NASDAQ:AKAM) shares plunged 12% in response to the cloud services firm's Q1 results that was followed by a string of ratings and PT cuts.

    The company generated adj. EPS of $1.39 on revenue of $904M (+7 Y/Y) – both metrics fell short of consensus estimates.

    Revenue by solution: Security revenue was $382M, up 23% Y/Y; compute revenue grew 32% Y/Y to $78M, while Delivery revenue fell 6% Y/Y to $444M.

    GAAP net income fell 23% Y/Y to $119M, while adj. net income dropped 1% to $225M primarily due to an adverse tax impact of $0.03.

    CEO Tom Leighton stated, "Despite a challenging global environment and the headwinds associated with the strengthening U.S. dollar, Akamai delivered results in line with our Q1 guidance."

    The company noted in the earnings call that it expects a much greater foreign exchange headwind for the remainder of 2022. Non-GAAP effective tax rate is seen at ~16%, which is around 1.5 points higher than the prior assumption.

    As a result, the company cut its full year forecast, expecting adjusted EPS between $5.32 and $5.44 vs. $5.98 consensus (prior guidance: $5.82 to $5.97) and revenue $3.62B to $3.67B vs. $3.80B consensus (prior guidance: $3.673B to $3.728B).

    Q2 guidance: Revenue is estimated to be between $890M and $905M vs. $938.66M consensus (FX fluctuations are expected to have a negative $30M impact year-over-year on Q2 revenue). Q2 non-GAAP EPS is seen at $1.28 to $1.33 vs. $1.46 consensus.

    The results failed to impress analysts, with Baird downgrading its rating on the stock to "Neutral" from "Outperform" and lowering PT from $125 to $102. The new PT implies a 10% decrease from last price.

    Other brokerages also cut their targets on AKAM. Cowen lowered it from $186 to $164; Piper Sandler from $126 to $118 and Royal Bank of Canada from $140 to $135.

    May 04, 2022 10:05 AM ET

    • April PMI Composite Final56.0 vs. 55.1 consensus vs. 57.7 prior
    • The rate of output growth eased to the slowest for three months, but was sharp overall.
    • Input and labor shortages pushed up cost burdens to the greatest extent on record.
    • New export orders rose at the quickest rate since data collection for the respective seasonally adjusted series began in September 2014.
    • Service PMI: 55.6 vs. 54.7 consensus vs. 58.0 prior
    • Higher wage, transportation and material costs drove up input prices.
    • The rate of input price inflation accelerated for the third successive month to the fastest in 11-and-a-half years of data collection.
    • Backlogs of continued to rise, thereby extending the current sequence of expansion that began in July 2020.
    May 04, 2022 10:00 AM ET

    • April ISM Services PMI Index57.1 vs. 58.5 consensus and 58.3 in March.
    • Economic activity in the non-manufacturing sector grew for the 23rd consecutive month.
    • Business Activity Index: 59.1 vs. 55.5 prior.
    • Prices Index: 84.6 (all-time high) vs. 83.8.
    • New Orders Index: 54.6 vs. 60.1.
    • Employment Index: 49.5 vs. 54.0.
    • Supplier Deliveries: 65.1 vs. 63.4.
    • Overall, "business activity remains strong; however, high inflation, capacity constraints and logistical challenges are impediments, and the Russia-Ukraine war continues to affect material costs, most notably of fuel and chemicals," said Anthony Nieves, chair of the Institute for Supply Management Services Business Survey Committee.
    • Earlier, goods and service trade deficit widened more than expected in March.

    DENN -11.89%May 04, 2022 10:04 AM ET2 Comments

    Shares of Denny's Corporation (NASDAQ:DENN) plunged in early trading on Wednesday after the restaurant missed expectations with its profit tally for Q1.

    Oppenheimer said it is difficult to forecast improved results for Denny's (DENN) amid the choppy operating environment that is still presenting unexpected sales and margin challenges.

    Denny's (DENN) addressed those macro challenges on the earnings call.

    "Global events in March contributed to additional inflation concerns, driving record high gas prices and additional supply chain disruptions, which ultimately weighed on our consumer sentiment and sales trends in March," noted CEO John Miller.

    Denny's (DENN) fell 12.69% on Wednesday morning and is swapping hands at its lowest level of the year.

    AAPL +0.01%May 04, 2022 9:46 AM ET1 Comment

    Apple (NASDAQ:AAPL) added to its position at the top of the tablet market in the first-quarter, even as iPad sales fell, the result of a slowing market, research firm Canalys said.

    According to the firm, Apple (AAPL) ended the first-quarter with 38.6% of the tablet market, up 0.4% from the year-ago period, as it shipped 14.88 million iPads in the most recent quarter.

    Rounding out the top five were Samsung (OTC:SSNLF), Amazon (NASDAQ:AMZN), Lenovo and Huawei, with 20.4%, 9.2%, 7.8% and 4.4%, respectively.

    Total tablets shipped during the first-quarter were 38.6 million, down from 39.7 million in the year-ago period.

    During Apple's (AAPL) most recent quarterly results, the company said it generated $7.6 billion in revenue related to the iPad.

    Canalys analyst Himani Mukka noted that despite the decline in the first-quarter, demand for tablets is still strong.

    “The market has now posted eight consecutive quarters of shipment numbers greater than in Q4 2019, before the pandemic," Mukka said in a statement, adding that increased deployments to businesses are offsetting weaker consumer demand.

    Looking at the total PC market, including tablets, Canalys noted that Apple (AAPL) had the first spot, shipping 22.3 million units, up 1% year-over-year, thanks in part to strength in its Mac lineup.

    Apple held 18.8% of the market, up from 18.1% in the year-ago period, while Lenovo, HP (HPQ), Dell (DELL) and Samsung (OTC:SSNLF) rounded out the top five spots, with 17.8%, 13.4%, 11.7% and 7.4%, respectively.

    Canalys also noted that Chromebook shipments declined sharply, falling 60% year-over-year to 4.9 million units after the U.S. and Japanese education markets finished their purchasing.

    On Monday, Berkshire Hathaway Chairman Warren Buffett said he bought $600 million worth of Apple (AAPLshares during the first-quarter sell-off.

    ABNB +3.55%May 04, 2022 9:42 AM ET

    Airbnb (NASDAQ:ABNB) opened with a strong gain on Wednesday as investors sized up the company's earnings report favorably.

    On Wall Street, Airbnb (ABNB) generated plenty of praise, although the rich valuation on the stock remained a key concern.

    Mizuho Americas analyst James Lee said with a mix shift to urban and international markets, ABNB is likely to gain market share given its supply strength. Room night growth and EBITDA guidance were noted to be tracking ahead of consensus. The firm has increased confidence in strong fundamentals ahead for ABNB and has increased confidence in FY26 EBITDA of $5.5B being generated, but a Neutral rating is held in place due to premium valuation over online travel agency peers. The price target was clipped to $175 from $205.

    Oppenheimer kept a Market Perform rating in place. Analyst Jed Kelly noted that despite flawless execution, ABNB is trading at 9.5X the 2023 revenue estimate with tougher back-half comparable on the way.

    Bank of America was also cautious on Airbnb (ABNB) despite what it expects will be a strong summer travel season. Analyst Justin Post thinks ABNB is one of the strongest brands on the Internet, but thinks the sector multiple compression could create a ceiling. A Neutral rating and price objective of $188 was maintained.

    There was some bullishness on Wall Street with Citi reiterating a Buy rating on Airbnb (ABNB) on its view the company did enough to justify a higher valuation.

    "Following 1Q22 results whereby Bookings, Revenue, and EBITDA came in 4%, 3%, and 205% above consensus, respectively, we emerge incrementally confident that Airbnb is taking share of the global lodging travel market and shares remain our top pick within the online travel vertical."

    Shares of ABNB rose 6.93% in early action vs. the 52-week range of $129.71 to $212.58.



  11. The last time the Fed went up +0.5% (May 2000) the market didn't bottom for 2.5 years.


  12. I can't look at the 5-year QQQ chart and see anything except a new "higher low" around 200-225, but maybe 195 or less with an over-correction. There's thee 143 low in the end of 2018, and then the 166 March 2020 covid low.




  13. GNRC doing nicely.  


  14. QQQ/BDC – It's been a great decade overall but these stocks are priced for continued growth, not plateauing.  

    Good luck to them competing with bonds when bonds start paying 8%.  From 2,000 in 2012 to 12,500 now is 20% annual growth for the Nas.  Have they grown 20% recently?  Are they likely to in the future?  They are on a path that is clearly not sustainable and, like they did in 2001, they'll have to correct and consolidate until the next wave of earnings creation comes to pass because paying 30x for companies that are growing less than 10% is simply fiscally unsound and fiduciarily uninvestable.  Combine those with the fact that, at $26Tn, there's not enough money in the world to sustain even 10% growth in the Nasdaq's value and it's going to be lots of stocks competing for not enough Dollars at some point.

    There's massive liquidity now but the Fed withdrawing from bonds that HAVE to be sold means the bond market will now be competing with the stock market for inflows to the tune of $100Bn per month – where's that going to come from.  Bonds attract more money by offering higher rates – stock attract more money by offering lower prices, which sends more stockholders into the bond market – bad cycle.

    Things don't happen in a vacuum.   Although, cosmically, I guess everything happens in a vacuum…



  15. GNRC/Stock – Solid report:

    Generac Non-GAAP EPS of $2.09 beats by $0.17, revenue of $1.14B beats by $50M

    May 04, 2022 6:03 AM ETGenerac Holdings Inc. (GNRC)By: Niloofer ShaikhSA News Editor1 Comment

    • Generac press release (NYSE:GNRC): Q1 Non-GAAP EPS of $2.09 beats by $0.17.
    • Revenue of $1.14B (+41.2% Y/Y) beats by $50M.
    • The company is updating its full-year 2022 net sales growth guidance to be approximately 36% to 40% compared to the prior year on an as-reported basis, an increase from the previous expectation of approximately 32% to 36% growth.
    • Adjusted EBITDA margin, before deducting for non-controlling interests, is expected to be approximately 21.5% to 22.5% as compared to the previous expectation of approximately 22% to 23.0%.

    Top Trades for Thu, 28 Apr 2022 13:28 – BA and GNRC

    While we are at it then, let's sell 5 GNRC 2024 $180 puts in the Earnings Portfolio for $18 ($9,000) to remind us to keep an eye on them.  No worries about the net $162 entry, which is $70 (30%) below the current price.  

    Free money!


  16. That chart says "8000 with over-correction as low as 6000"

    Or at least, one should be semi-prepared for that. 




  17. That would be drastic but not impossible, BDC.



  18. Powell said 0.75 hikes off the table so we're blasting higher but 0.75 hikes were never on the table until the Fed started a rumor that they were.  

    Jeux sans frontières

    As I was just saying in the Webinar – we'll see what kind of bounce that gives us but Dow blasting up 600 points – they were waiting for an excuse.

    • 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)

    Weak bounce on /ES went from Red to Black since Monday morning is the only thing that's changed at the moment.  


  19.    

    Oil is loving the excuse as well:

        

    Bonds are saved:

       

    This is the bet we should have made:

     

    Massive intraday drop in the Dollar:



  20. Wall Street Isn’t Ready for the Crackdown Coming Its Way



  21. Still blasting higher.  Russell, strong being tested at 1,920 and 4,160 is now green.  Nas 13,340 could even get to 13,500 by tomorrow if this keeps going.  This will work off the oversold condition a bit so interesting how it plays out the rest of the week.


  22. May 2nd, 2022 at 10:10 am | (Unlocked) | Permalink 

    STP is at $706,038, which is good:

    Security Value:  $494,418
    Cash on Hand:  $211,621
    Total Value:  $706,038
    Portfolio Ret.:  253.0%

    LTP is down to $1,870,683, which is bad:

    Security Value:  $100,195
    Cash on Hand:  $1,770,488
    Total Value:  $1,870,683
    Portfolio Ret.:  274.1%

    Now we're at:

    STP $747,248:

    Security Value:  $343,128
    Cash on Hand:  $404,121
    Total Value:  $747,248
    Portfolio Ret.:  273.6%

    LTP  $2,081,958

    Security Value:  $311,470
    Cash on Hand:  $1,770,488
    Total Value:  $2,081,958
    Portfolio Ret.:  316.4%

    What a crazy week!   $240,000 in combined gains so thanks Mr. Powell.  The key move was going for the CASH!!! in the STP and converting back to a more hedged spread (the SQQQ combo) than the directional TZAs (which is not yet reflected in the STP, so maybe better than it shows).  


  23. Look how perfectly those candles formed at 4,180 - that's how we know the 5% Rule is working properly:

    Think about how long we've been forecasting these levels – amazing to see them hit to the penny, right?  

    What do we do with spikes in the 5% Rule?  Ignore them!

    10% of the MACD oversold conditions disappeared already.  Actually, more like 20% as we're not supposed to be more than 50% in either direction.  


  24. Hey, bad news, no one noticed this whole time that the strong bounce should be 4,360, not 4,320 and that means the 50 dma is already at the strong bounce line and that means we only have until next week to get back over the Strong or there will be major technical trouble. 


  25. No wait, ignore that.  4,000 to 4,800 is 800 points so 160 is correct and it's 4,180 that's wrong and the weak bounce should be 4,160 – not 4,180!  4,320 is correct for the Strong Bounce.  


  26. 13,500!   That was impressive.  




  27. Flying insect numbers have plunged 60% in less than 20 years: report