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Non-Farm Friday – Holding the Line?

4,130 – That's where we started this week.

4,127 – That's where we are this morning.  It only SEEMS like a bad week because we had that silly rally on Wednesday that got our hopes up but, on the whole, it's been a good, solid consolidation week DESPITE some disappointing data.  This morning, the NFP Report shows that we added 428,000 jobs – that's not what a depressed economy does and there are 11.2M jobs available – enough for anyone who doesn't like the job they have to find another one.  

So yes, that's driving wages higher and that's causing some inflation but transferring money from Corporations to the Workers is the good kind of Inflation in this Capitalist Hellscape we've allowed to consume our once-thriving Middle Class.  And, by the way, when someone saying something like that smacks of Communism – don't think about how liberal I am but think about how Conservative our thinking has been programmed to be that the very idea of workers getting their fair share of the profits they WORKED for seems like a radical idea these days.

About Supply Side Economics — I'm Still Waiting For It To Trickle Down | by  Dennis Crawford | MediumWe NEED to rebalance the scales and we NEED to redistribute some of the wealth because we've been on a very wrong patth for a very long time – essentially since Reagan was elected in 1980, when we were sold that whole "trickle down" line of BS.   Wealth has never tricked down.  Wealth accumulates and a very small group of people become so powerful that they end up having essentially all of the wealth and then they become more concerned with protecting it than they are about doing things for the public good.

So they pass laws that restrict the rights of the very people who put them in power and then they pass laws that restrict elections so they can't be removed from power and, as observed by Lord Acton 100 years ago, the power itself corrupts the men who hold it.  Eventually the people suffer enough and overthrow the people in power and take all the money and loot the wealth and we have a great redistribution and, in the 20th Century, that was called Communism and Socialism and the Communism came through Revolution and the Socialism came through fear that something worse would happen if the post WWI monarchies didn't start taking better care of the people.  

Even America dabbled in Socialism, hence "Social Security" but that's been gutted and destroyed over the years and the payments are now a joke – especially compared to the amounts people are forced to contribute.  The average benefit in 2022 is $1,657/month and that's for 13% of your income (half from you, half from you boss) for about 40 years.  Let's say you averaged $25K the first 10 years and $35K the next 10 and then $45K and $50K so that's $1.55M x 13% = $201,500 contributed to Social Security.

Using a Compound Rate Calculatior, and let's say you contibuted $4,000/yr for 40 years and got 5% interest – you should have $535,519 in the bank and 5% of that annually is $26,776 or $2,231/month.  So not only is the government giving you 1/2 of what they should be giving you but they are also STEALING the principle when you die.  People used to be able to leave that $535,519 to their children but now it just disappears and the Government stops paying the day you die.  That was not the original plan but it's what the plan has become over the years.  I'm certainly not against Social Security – I'm against what it has become!  

Employment - Chart PornAnyway, let's not get too into that.  My main point is that, painful though it may be, rising wages is a good thing and companies will adapt and maybe end up with a bit less margin going forward but it won't put them out of business if 30% of their revenues go to wages instead of 20%.  

As you can see from this chart, Wages (and that includes the wages of the Masters) fell from 54% of GDP in 1970 to 44% of GDP in 2012 – that's down 18.5% and do you think your boss didn't make more money or did it come out of your paycheck?  That all started under Nixon, who promoted the idea that unions were run by the Mafia and then Reagan fired the Air Traffic Controllers and ushered in a great era of union-busting while the courts chipped away at workers rights until suddenly we were wondering if we deserved Health Care or Social Security at all?

Not having to pay workers is great for the bottom line and Corporate Profits almost tripled, from 4% of the GDP to 11% in 2012 and, as of last year, we hit the full triple at 12% and that is AFTER taxes and after all the BS deductions they take – not wages – half those wages go to taxes and benefits – like Social Security that you end up getting ripped off for.  And don't kid yourself, all those Trllions of Dollars we put into Social Security are lent out to Corporations by the Government at sub-standard rates on our behalf – that's why it's not accumulating in our accounts!  

So yes, get behind efforts to fight inflation but now when it's WAGE inflation.  Workers need to get paid more and that's been a long time coming and certainly corportations do just fine with 8% of the GDP in profits – they don't need 12%.  BUT if things normalize back to 8% – what happens to the market?  The market will have to normalize too and that's the danger we face as investors. 

Nova Scotia Department of Finance - StatisticsDon't get caught up thinking companies have to bounce from these levels.  Labor-intensive businesses especially are simply going to have to deal with making a bit less money going forward because, as we're hearing from a lot of Consumer-based CEOs, it's not that easy to pass on price increases to Consumers who still haven't all gotten raises that adjusts for inflation that is destroying their Disposable Income.  

So consider this a period of adjustment.  It's a market CORRECTION – not a dip.  Dips you recover from, Corrections show you where the proper level is after you're done over-paying for companies and, as I've been saying for 2 years now – 30x earning is TOO MUCH to pay for stocks at any point in history – especially one where we have all these over-hanging macro issues.  

This is not a complicated situation:  The free money has dried up, Workers are no longer forced to accept below market wages since there are enough jobs for 10% of them to quit tomorrow, Supply Chain issues don't disappear overnight, our refusal to kick the fossile fuel habit has consequences that give people like Putin leverage over us and are also causing massive damage to the planet – which gets more and more expensive to fix.  We also have 11,500 people per day retiring as the peak Boomers have now hit the 65 mark and this will go on for the rest of the decade, putting massive strains on our system.

Going forward, we need to invest with these realities in mind.  At the moment, I think we've got further to fall as I'm still having trouble finding bargains in this market and some companies I do think are baragains are STILL managing to disappoint us on earnings/guidance.  

We bumped up our hedges in the Short-Term Portfolio (STP) to over $2M – up 33% from last week and I THINK I can sleep well on the weekend with them but maybe not with the Nasdaq failing to hold 13,000 – we'll see how the day goes – wondering when it will be safe to get back in but getting back in does not mean we'll want to be back in the same stocks that are failing us now – something you may want to consider.  .  

Have a great weekend, 

- Phil


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  1. Good Morning

    trickle down theory has been repackaged as rising tide lifts all boats 

  2. Good Morning.

  3. Too bad, no one in that funny pic is around to defend the trickle down theory….

  4. Good morning! 

    That's right 1020, they are dead and will burn in Hell and if we are nice and accept our poverty, we will get rewarded AFTER we die.  I wonder who wrote that?   You could probably put that same caption on the Last Supper.  That's why the Church is right by the top of the pyramid:

    Pyramid of capitalist system. | Download Scientific Diagram

    Meanwhile, I hope we are all sufficiently trained to ignore these daily moves, as noted yesterday:

    • 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)

    If the Nasdaq has 600-point bounce lines then 12,900 would be the next level down and we just failed that as well.  That's TERRIBLE!  RUT is 1,851 and Dow is 32,747 after dropping 1,200 points in a day so the Dow could turn red for the first time if we have another day like this or simply follow-through with this momentum into next week.

    12,900 is in the rear-view window now so 12,300 is the next line to watch but the RUT and Dow are still holding and /ES is still over 4,000 so all we're doing here is testing those 20% lines – we always knew that was going to happen – the hedges are for IN CASE those levels don't hold. 

    Remember on the Nasdaq, the entire move up to 16,500 was ignored as an overshoot of 15,000 and 13,500 is only 10% below 15,000 but it is a 20%(ish) correction of 16,500.   We don't use 13,200 because the key support on /NQ is 15,000 and the action we've seen so far only proves that we were right about the overshoot.  Unfortunately though, if 15,000 proves to be the top of the range, we can easily drop 20% from there to 12,000 – which is what's happening now.  Hopefully 12,000 will be good support and we have a 3,000-point drop in that case with 600-point bounces so we should expect to see support at 12,600 (weak) and 13,200 (strong).

    See how that played out last year?  

    HOPEFULLY we form a solid base at 12,000 and then we work our way back to 15,000 and earnings improve to the point where we DESERVE to be there.  Don't forget AAPL is still dominant in the Nasdaq – even more so as it's fallen a bit less than the rest.  So if AAPL hasn't corrected 20% from the top ($144), then it's not likely we fail the proper 20% line at 12,000.  Notice $144 was in play for AAPL for half of last year – so it should be solid support for them.

    FB and NFLX and AMZN already crashed 

    GOOGL pulled back but not as drastic:

    TSLA is another biggie with room to fall:

    AVGO, COST, NVDA, PEP and CSCO are all about 2% of the index and after that, who cares?  

    We know AAPL, AVGO & CSCO would all be doing better if not for supply chain issues.  MSFT, AMZN, FB and GOOGL are all suffering from comps when everyone was forced to stay at home and use their services so the pullback isn't there fault BUT they still probably never should have been as high as they were (idiots extrapolating the pandemic gains).   TSLA is still $900Bn and should be $450Bn – so that's a remaining danger but survivable.

    So, on the whole, I don't see a compelling reason to drop below 12,000, which means we shouldn't have much further to fall at this point.  The issue is I also don't think we have much reason to bounce back more than 10% (halfway) at best and I'd be more comfortable if we drift along here until Covid and the war are resolved, at least.

  5. Trickle-down/all – the wikipedia article on supply-side economics is good stuff. I'd never realized that people have been playing this scam for so long. There's a joke from Will Rogers, a bitter comment from LBJ, and a highly intelligent comment from Thomas Sowell, a towering intellect who is much smarter than you.

  6. Boy, there's almost no need for a new Watch List as the old one is back to the buy zone for most of them:

    We bumped up our hedges yesterday so now we switch back to bargain-hunting mode and I don't want to do anything before the holiday but here's a few stocks worth looking at:  

    • Bidu (BIDU) is 60% off it's highs at $136, which is a market cap of $85Bn although the company makes a fairly consistent $3Bn a year so less than 30x for the high-growth company is very nice.  People are worried Chinese stocks will be delisted but that doesn't mean you can't own them on foreign exchanges.  That's what the rest of the World does with US Stocks – so don't be afraid of it.

    • JD.Com (JD) is 40% off it's highs and $65 is just $103Bn for a company that is on track to make $13Bn this year and expects to make $20Bn in 2022.  JD is a logistics company that mainly does business in China and again, it's stupidly low because of fear – nothing that's acutally wrong with the business.  

    • Generac (GNRC) is a generator company we always like when they are down and $347 is 33% off the highs at $22Bn and these guys made $351M in 2020 and are making $604M this year and project $756M for 2022.  Every time there's a natural disaster – their phones ring and, the way this World is warming – business will be booming for years to come.

    • Alaska Air (ALK) is my favorite airline.  They are 30% off the highs at $52, which is $6.5Bn and they used to make almost $1Bn per year but they lost $1.3Bn in 2020 and this year is about break-even and maybe next year will be too but, one day – they will make money again.  The nice thing about options is we don't have to buy them for $52, we can PROMISE to buy 500 shares at net $35 (another 33% off) by selling 5 2024 $40 puts for $5 ($2,500).  That puts $2,500 cash in our pockets while we wait and see how Omicron plays out in Q1 – let's do that in our Long-Term Portfolio (LTP).  

    • Activision (ATVI) is a huge gaming company that is down 36%, mostly because they are involved in a sexual discrimination case in California because, who would have guessed, gamers and coders apparently don't know how to behave properly around women.  Does this affect their gamer audience?  My oldest daughter is a radical feminist and she hasn't closed her Warcraft account so I think they'll be OK.  ATVI makes $3.90 per $52 share you buy, which is a p/e of 13.33 and they haven't even had a big release recently but the Metaverse will open up a whole new frontier for gaming companies and who has all the top coders?  

    • Medtronic (MDT) is another old favorite and $104 is 23% off the high and a $140Bn market cap for a company that makes about $4Bn/year and is growing nicely.  As with ALK, I'd be happy to promise to buy them if they get cheaper. 

    • Boeing (BA) is only $119Bn at $203 and they generally made $5-10Bn a year before their problems.  They still have a 7-year backlog of orders to fill and there's nobody breathing down their necks to compete (though we do have stock in ERJ).  This will be a slow turnaround so we don't expect a big jump but you really don't want to miss the comeback on them. We already sold 5 of the 2024 $200 puts in our LTP for $30 back in November and now they are even better at $38, netting you in at $162.  

    • Phillips 66 (PSX) is 22% off the highs at $73 and that's $32Bn and, pre-covid, these guys made $5Bn a year.  They lost $4Bn in 2020 but that's why you can buy them so cheap.  This year making about $1.7Bn, next year they expect to be back over $3Bn so now's the time to get in.

    • Disney (DIS) is 24% off the highs at $155 and that's $281Bn in market cap and they are good for $10Bn in a good year so not really a bargain and Omicron makes them too risky but worth keeping an eye on in case we're shut down again and they get closer to $120 – where I would find them irresistable. 

    • Corning (GLW) is another old favorite of ours that's 20% off the highs, which is $32Bn at $37.50 and they are good for about $1.8Bn so paying 20x for a steady-growing industry leader is very fair, in my opinion.  

    So there's 10 stocks for a Holiday Watch List we can keep our eye on.  If we survive the weekend, we'll probably add a few more to our portfolios and, if we don't – then these are the fresh horses we'll want to ride into the next recovery. 

    We did BIDU and got out.

    • JD got cheap in March but now we are worried about China though next time in the $40s I'd take a chance.
    • GNRC we just added after waiting PATIENTLY for 6 months to get a good price.  
    • ALK we have short puts on in the LTP (still good for new trade).
    • ATVI is getting bought so I guess it was too cheap at $57.50.
    • MDT is only back to where I liked it.  That's one we can add to a portfolio.
    • BA is getting cheaper every day but I think $150 is very compelling and we already have it.  See: "13 problems management isn’t fully recognizing, according to BofA"
    • PSX is a refiner so doing great.  
    • DIS we sold puts in the LTP but we've been playing them for income in the Butterfly Portfolio – might be time to add a proper position in the LTP.
    • GLW is a bit cheaper than it was at 15x with nice, steady 5% growth.  Also worth adding somewhere.  

    Not a bad list overall.  That's why they were a Watch List and not a Buy List – we were supposed to wait for better prices and now we're getting them.

    Sowell/Snow – You can read that here:

  7. Sowell/Phil – heh…thanks, Phil, but I was being sarcastic, and using the generic "you" as well. No offense intended, you're much smarter than Thomas.

  8. Morning.  GPRO – Phil.  What's your take on earnings.  I quickly looked it over but appears decent.  Subscriptions is what I'm looking at is up 87%.  They're down 18% .. justified or overreaction?  Will go over earnings in more detail in a bit.  TIA!

  9. Offense/Snow – Don't worry, I'm not that sensitive.  

    Crazy moves this morning – just ignore:


    Oil flying again:


    I like that $22.50 line bullish on /SI but $50 per penny and very easy to drop 0.20 ($1,000) before you can get out so risky to play.


    Of course I still like $1,900 on /GC too.

  10. Phil gonna be grumpy after the Spirit Airlines flight though… get your questions in now LOL

  11. Tech’s new season of shrinking

  12. LABU 7.15 may just buy the stock outright (options pricing too high right now)

  13. for those that can sell options short, an interesting idea is selling UVXY 2024 1 calls for 17 to 18. 

  14. Let's be honest snow, most X-ers "know" about voodoo economics because of Ferris Bueller.

  15. Good visualization:

    Take those guys out and the Nas is 25% lower.

    GPRO/Jeddah – Well other people really didn't like them.  We did well with them last time they were this low.  They beat on earnings so it was guidance that killed them.  

    • GoPro Subscribers up 85% year-over-year to 1.74 million
    • Adjusted EBITDA was $21 million, or 10% of revenue, compared to $11 million, or 5% of revenue in the prior year period.

    So all good there but guidance was 12% lower than expected – not at all a good reason to sell them off 17.5%.   $7.25 is $1.4Bn with no debt and $540M of cash and investments (so technically below $1Bn at $7.25) and they make $200M a year with 10% growth and I believe their commercial cameras (which are costing a lot of R&D at the moment) will be huge for them and eventually camera drones too.  I would not catch the falling knife but $6 should be a buy and you can sell the 2024 $7 puts for $1.85 and buy the 2024 $7 ($2.35)/12 ($1.10) bull call spread for $1.25 so, if you don't mind owning $7,000 worth of GRPO – you can sell 10 of the short puts for $1,850 and buy 20 of the spreads $2,500 and that's net $650 on the $10,000 spread – nice way to get started.  

    LOL Pman – Good prediction!   Arriving in Vegas at midnight doesn't help either.

    LABU/BDC – I can't believe the way Biotechs are being treated.   As if Covid was the only thing they would ever have a chance to make money on.

    Gold and Silver weaker as the Dollar picks up.


    People only want Dollars into the weekend.  

  16. UAA hammered hard. I dont own them but maybe worth a gamble. 

  17. UAA/Kustomz – Never been one I liked very much.  Nothing wrong with them, just over-priced.  Even $10.90 is $6.8Bn so still around 20x and they did $5Bn in 2018 and this year they project $6Bn so growth is not very exciting – like 5%.  HBI is $4.4Bn at $12.58 and they have $7Bn in sales and drop $600M+ to the bottom line so 7.3x with just a little less growth (2.5%).  As I learned from my years doing MAGIC Conventions – clothes are clothes – everyone has the hot new thing for a season or two and then it's all about how much money the retailer can make off the space your stuff is in.  The rare exceptions are certain mega-brands that Retailers HAVE to carry like Polo or Tommy Bahama – other than that, no one is special.  


    Looks like we're finishing the week on a sour note for the indexes. 

  18. RIVN -5.58%May 06, 2022 3:00 PM ET6 Comments

    Welcome to Seeking Alpha's Catalyst Watch – a breakdown of some of next week's actionable events that stand out. Check out Saturday morning's regular Stocks to Watch article for a full list of events planned for the week or the Seeking Alpha earnings calendar for companies due to report.

    Monday – May 9

    • Volatility watch - Options trading is elevated again on Vinco Ventures (BBIG) and Ardelyx (ARDX). DoorDash (DASH) and Lucid Group (LCID) are near the top of the list of most discusssed stocks on Reddit's WallStreetBets and StockTwits after their earnings reports. Watch IGM Biosciences (IGMS) with short interest at an elevated level.
    • All week - The conference schedule is headlined by the Bank of America 2022 Healthcare Conference with over 50 healthcare companies giving presentations. Other notable meetings that could generate news include the Goldman Sachs Industrials and Materials Conference, the Oppenheimer's 7th Annual Emerging Growth Conference, Citi’s 2022 Global Energy, Utilities, and Climate Technology Conference, the Sidoti Virtual Micro Cap Conference, and the Goldman Sachs Seventh Annual Leveraged Finance and Credit Conference.
    • All day - Analyst quiet periods expire on Execelerate Energy (EE), Applied Blockchain (APLD), and Genius Group (GNS). IPO lockup periods expire on certain blocks of shares for Hertz Global (HTZ), Expensify (EXFY), Third Coast (TCBX), and Society Pass (SOPA). There is also Rivian Automotive (NASDAQ:RIVN) with nearly 800M shares being freed up to be sold investors if they desire. Notably, that tally includes 100M shares of Rivian held by Ford (F) and 160M shares by Amazon (AMZN).
    • All day - Western Digital Corporation (NASDAQ:WDC) will host its 2022 Investor Day during which execs plan to discuss the company’s long-term strategy with a question and answer session following the presentations. A separate "What’s Next Media & Industry Analyst Day" will focus on new products across WDC's portfolio of storage solutions. The events take place with activist investor Elliott Management calling for the storage company to separate its hard-disk drive and flash businesses.
    • 11:00 a.m. Shareholders with Artisan Acquisition Corp. (ARTA) meet to vote on the deal to take Hong Kong startup Prenetics public in a $1.7B SPAC deal. The combined company will be traded on the Nasdaq under a new ticker symbol PRE upon completion.
    • 11:00 a.m. Atlantic Union Bankshares Corporation (AUB) will host an investor day outlining the company's strategic priorities and plans for the future.
    • 2:00 p.m. Jack Henry & Associates (JKHY) will host an Investor Day event with a series of presentations by senior management. The last time the company held an investor day, shares fell about 5% over the next few sessions as investor digested the update.

    Tuesday – May 10

    • All day - Dish Network Corporation (DISH) will hold an analyst day event. Shares of DISH fell sharply following a disappointing earnings report, but Morgan Stanley thinks the analyst day presentation could reinvigorate investor confidence in the private network/enterprise opportunity.
    • All day - Watch Veru (VERU) with a pre-emergency use authorization meeting planned for Sabizabulin. Shares of Veru have been active in the past off sabizabulin developments.
    • All day - Shareholders with OTR Acquisition Corp. (OTRA) will meet to approve a business combination with Comera Life Sciences in a SPAC deal. Comera Life Sciences is looking to transform essential biologic medicines from intravenous to subcutaneous forms.
    • All day - Fed speakers are back on the circuit with Federal Reserve Bank presidents Raphael Bostic, John Williams, and Loretta Meister due to give talks.
    • All day - Fortinet (FTNT) will host its Accelerate 2022 & Investor/Analyst Day event.
    • All day - Corvus Pharmaceuticals (CRVS) is set to hold a R&D Symposium to provide an update on the company's three clinical programs
    • All day - Tesla (TSLA) CEO Elon Musk will join the Financial Times’ Future of the Car Summit for a one-hour live interview.
    • All day - Magna International (MGA) will hold its investor event at the M1 Concourse in Pontiac, Michigan. Magna CEO Swamy Kotagiri will present on the company's position in the market, innovative technologies, systems-level capabilities and progress on the company’s strategy.
    • All day - Blue Apron (APRN) will host its inaugural investor day at the company’s fulfillment center in Linden, New Jersey. Members of Blue Apron’s management team plan to discuss the company’s mid-to-long term strategic plans and outlook, operations, marketing, technology, sustainability and financials, among other topics. Shares of Blue Apron are down more than 40% YTD.
    • Postmarket - Coinbase Global (COIN) will report earnings with options trading implying a 18% share price move up or down. Coinbase earnings have created ripples in the broad crypto market in the past, including immediate moves for Bitcoin (BTC) and Ethereum (ETH-USD).

    Wednesday – May 11

    • All day - Mind Medicine (MNMD) will present Phase 2a data on the effects of LSD at the Pysch Symposium.
    • All day - Under Armour (UAA) holds its annual meeting on May 11 just days after shares crumbled after the athletic apparel company disappointed with its earnings report. Kohl's (KSS) also holds an annual meeting with activists investors pushing for board seats and bidders in the mix.
    • 8:30 a.m. The consumer price reports will blaze in to expectations for a 0.2% month-over-month increase in CPI. The year-over-year inflation rate is seen edging down to 8.2% from 8.5%. A CPI reading of 6.1% is anticipated after backing out food and energy costs. Bank of America forecasts broad price gains across categories amid supply chain headwinds and higher commodity prices. Food and auto prices are seen running extra hot, while some deceleration is seen with lodging prices, air fares, and transportation services pricing.
    • 1:20 p.m. Aurora Innovation (AUR) CEO Chris Urmson takes part in a fireside chat at the FT Future of Car Summit.
    • 2:20 p.m. Lucid Group (LCID) CEO Peter Rawlinson takes part in a keynote address at the FT Future of the Car Summit.
    • 4:30 p.m. TuSimple (TSP) will host its 2022 Investor Day in Tucson, Arizona with a detailed update on the company's progress on hitting near-term milestones and the path to commercialization. Analysts have the event circled as a potential share price catalyst.
    • 4:30 p.m. Lucid Diagnostics Inc. (LUCD) will host a business update conference call to provide an overview of the company's near-term milestones and growth strategy.

    Thursday – May 12

    • All day - Realogy Holdings Corp. (RLGY) will host an investor day event.
    • All day - Energy traders will be watching for the latest OPEC monthly oil report.
    • All day - Better World Acquisition Corp. (BWAC) will hold a shareholder Meeting to vote on extending the deadline on the deal to take waste disposal firm Averda public.
    • All day - Southwest Gas Holdings (SWX) will hold its annual report with Carl Icahn still pushing to land as many as four seats on the board.
    • 8:30 a.m. The producer price report will attract more attention than normal with a double-digit Y/Y increase forecast.
    • 8:30 a.m. WestRock Company (WRK) will host its 2022 Investor Day with updates expected on the company’s markets, operations, growth strategies and goals.
    • 11:00 a.m. BetMGM will hold a virtual business update to provide insights into the growing North American sports betting and iGaming operations of the company. Look for updates on the launches in Arizona, Colorado, Michigan, and Ontario. BetMGM is owned by MGM Resorts (NYSE:MGM) and Entain (OTCPK:GMVHF).
    • 1:00 p.m. Fastly (NYSE:FSLY) will host its 2022 Investor Day. The event will feature presentations members of the executive leadership team. Bank of America previewed that the event will provide more color around the on-going CEO transition at Fastly, how the company plans to address the CDN market, and more visibility into the security and Edge Cloud businesses.
    • Postmarket - Companies reporting earnings with a double-digit share prices move up or down implied by options trading include Affirm Holdings (AFRM), Poshmark (POSH), and Purecycle Technologies (PCT).

    Friday – May 13

    • All day - The Federal Reserve calendar of speakers include FRB Minneapolis President Neel Kashkari talking about energy and inflation, as well as FRB Cleveland President Loretta Mester discussing monetary policy.
    • 10:00 a.m. VolitionRx Limited (VNRX) will host a Capital Markets Day to update investors on strategic updates and discuss the company's key short-term growth drivers. Shares of VolitionRX rallied more than 20% in the six weeks after its last held a capital market day event.

  19. HBI, much better run company. The charts always entice me, always looking for doubles. 

  20. SP500 -1.47%May 06, 2022 2:37 PM ET54 Comments

    Thes stock market continued to show losses in Friday's mid-afternoon trading, failing to bounce back from Thursday's massive selling spree. With the further decline, the S&P 500 was testing the 4,100 mark, on track for its lowest close of 2022.

    Although they attempted to push into positive territory earlier in the session, the Nasdaq (COMP.IND) was -1.6%, S&P (SP500) was -1.1% and Dow (DJI) was -1.0% by mid-afternoon trading.

    Minneapolis Fed President Neel Kashkari said he sees the Fed's neutral rate at 2% and that supply constraints unwind quickly hikes to neutral might be enough to bring down inflation.

    Turning to the bond market, the 10-year Treasury yield is now well above the 3% mark, rising another 4 basis points to 3.11%. The 2-year Treasury yield is down 4 basis points to 2.68%.

    "What’s dangerous about yesterday’s huge market slump is that there must be an element of doubting the ability of there to be an effective 'Fed Put' in this cycle following a 30-40 year period where the central bank has almost always been able to come to the market's rescue," Deutsche Bank's Jim Reid said.

    On the economic front, nonfarm payrolls rose more than expected in April, and wage inflation eased, but the labor force participation rate arrested its upward trend, falling back slightly.

    "What’s not clear at this point, though, is whether the slowdown in payroll growth is a temporary hit triggered by the Ukraine war and the accompanying jump in energy prices, or an inevitable consequence of employment recovering most of the plunge triggered by the pandemic, or a more alarming downshift caused by the tightening of financial conditions," Pantheon Macro's Ian Shepherdson said. "We think the latter is unlikely; it’s just too soon."

    Shepherdson added: "[Fed] Chair Powell was very clear Wednesday that the Fed currently intends to hike by 50bp in both June and July, but if the wages numbers continue to signal a meaningful slowing we think the July 50 is not a done deal. Bear in mind that inflation will fall sharply over the next three months too, and we expect the housing market downturn to be undeniable in the data by then too."

    CROX -7.54%May 06, 2022 1:52 PM ET9 Comments

    • Crocs (NASDAQ:CROX-3% on Friday trading as Baird analyst Jonathan Komp slashes PT by 40% to $120 and maintains an outperform rating.
    • The company's Q1 earnings and guidance boost reflect strong operating performance despite external concerns of an eventual slowdown/reversion.
    • Analyst is uncertain how long sentiment headwinds may persist, but expects Crocs and HEYDUDE to achieve growth targets for 2H/2023.
    • B.Riley cuts the price target to $128 from $153. The target price is double from the current market price of $63.92.
    • Stifel analyst cuts price target to $59 from $101.

    As I said, Consumer Retail is a very tough business at the moment.

    May 06, 2022 11:30 AM ET60 Comments

    Federal Reserve Bank of Minneapolis President Neel Kashkari said Friday that the neutral rate, or the rate of a stable economy, is close to being achieved, though the "Fed will need to continue to assess where neutral is," amid skyrocketing interest rates across the yield curve, he wrote in a blog post Friday.

    He estimated a neutral fed funds rate of 2% and he's "confident that the Fed will do what is needed to bring inflation down" to the central bank's 2% average inflation target.

    By contrast, Fed Chairman Jerome Powell assured that "we're a very long way to neutral now," he said at his post-monetary decision press conference on May 4. Recall the Fed hiked the target rate by 50 basis points and guided for balance sheet runoff starting in June in an effort to tame surging inflation.

    Kashkari, who is not currently a voting member of the Federal Open Market Committee, said it's important for the Fed to "follow through on the forward guidance of federal funds rate increases and balance-sheet reduction that we have already signaled in order to validate the repricing that has taken place in financial markets.”

    And while lopsided demand and supply dynamics continue to contribute to higher prices, "we will likely have to push long-term real rates to a contractionary stance to bring supply and demand into balance," Kashkari said. He added that the war in Ukraine as well as lockdowns in China, the world's second largest economy, "are likely delaying any supply chain improvements."

    In March, Kashkari said he "penciled in 7 rate hikes" for 2022.

    USO +1.93%May 06, 2022 1:23 PM ET11 Comments

    Active drilling rigs in the U.S. scored their seventh consecutive weekly gain, adding another 7 to 705, its highest since March 2020 and 57% above levels at the same time last year, Baker Hughes said in its latest weekly report.

    U.S. rigs targeting crude oil gained 5 to 557, their highest since April 2020, and gas rigs added 2 to 146, their best level since September 2019, while two rigs remained classified as miscellaneous.

    ETFs: (NYSEARCA:USO), (UCO), (SCO), (USL), (DBO), (USOI), (NRGU), (OILK), (OLEM)

    Bank of America's commodities team previously forecast 900K bbl/day of lower-48 supply additions on ~100 horizontal rig additions throughout 2022; the oil rig count is now up 52 in the first 15 weeks of this year.

    DISH -20.29%May 06, 2022 12:13 PM ET3 Comments

    Dish Network (NASDAQ:DISH) has tumbled 12.5% after its first-quarter earnings missed on nearly all measures, falling short on revenue and profit expectations and sporting disappointing subscriber numbers.

    Revenues fell 3.8% to $4.33 billion, while costs rose (particularly in selling, general and administrative expense), leading operating income to slide 36%, to $550.4 million.

    Net income slipped 31% to $432.7 million.

    Subscriber losses in its pay TV division doubled year-over-year, falling by about 462,000 subscribers vs. a year-ago decline of 230,000 net subscribers. That brought total pay TV subscribers to 10.24 million (7.99 million on Dish TV, 2.25 million on Sling TV), vs. an expected 10.5 million.

    The company also shed retail wireless net subs to the tune of 343,000, more than double the rate of last year's decline (of 161,000 net subs). It ended the quarter at 8.2 million wireless subs, vs. an expected 8.4 million.

    Meanwhile, net cash flow from operating activities fell to $705.3 million from a year-ago $1.13 billion, and combined with heavier purchases of property and equipment, free cash flow turned negative: to -$190.95 million from a prior-year positive $728.7 million.

    "Trends at the moment are not encouraging," MoffettNathanson says in reaction, zooming in on the cash flow turn in particular: That's "most discordant for a broader market suddenly focused on bird-in-the-hand cash generation stories." The firm is Neutral with a $28 price target.

    Bullish New Street Research (Buy rating) acknowledged the revenue, EBITDA and cash flow disappointed, but looked on the bright side: "The transition of subs from the Sprint network seemed to go better than expected, and the company may be close to completing the network deployment required to meet the June 2022 deadline."

    Dish Network just turned on its 5G service in Las Vegas this week, part of a move toward covering 20% of the U.S. population with the network by June.

    ARKK -5.23%May 06, 2022 11:28 AM ET69 Comments

    Cathie Wood’s flagship ARK Innovation ETF (NYSEARCA:ARKK) trades lower in Friday's early trading and has capsized to a new two-year trading low. The fund, which is focused on disruption and innovation names, is now closer to its COVID-19 trading low than to its 2022 opening year price.

    ARKK has now fallen 51.8% in 2022 and 70% from its record trading high. Moreover, with the losses accumulated during Thursday's session and Friday's early action, the exchange traded fund has collapsed 12% since Wednesday's close. At one point had lost as much as 16.1% in less than two full trading sessions.

    Wood’s ARKK is particularly sensitive to the recent general market sell-off, as investors appear to be purging themselves of high valuation names. The change in attitude has come as a higher interest rate environment is seen as unfavorable for unprofitable tech and growth stocks — the kinds of names ARKK is famous for holding.

    All 35 of ARKK's holdings are down double digits in 2022. Year-to-date, Signify Health (NYSE:SGFY) is the fund's best performer, down 12% since the end of 2021. The stock represents the ETF's 20th largest holding, with a weighting of 1.71%

    Meanwhile, TuSimple Holdings (NASDAQ:TSP) is ARKK's worst performing position, as the stock is -74.3% in 2022. TSP represents ARKK’s 29th most significant holding with a weighting of 0.99%.

    Additionally, 23 of the 35 holdings or 65% of the stock portfolio of ARKK trades lower than 50% in 2022.

    See a larger drawn out ARKK chart showing the key levels discussed above:

    In related ARKK news, Wood and Tesla boss Elon Musk share similar visions when it comes to actively managed funds, with both recently speaking out in favor of the investment vehicles.

  21. QQQ -1.45%May 06, 2022 11:03 AM ET97 Comments

    There have been 19 bear markets in past 140 years and many stocks are already in that territory, BofA Securities says.

    In the Nasdaq (COMP.IND) (NASDAQ:QQQ), 77% of its components are already down more than 20%, the traditional bear market definition.

    The "good news is that bear markets are quicker than bull markets," strategist Michael Hartnett wrote in BofA's weekly "Flow Show" note Friday.

    The average bear market duration is 289 days and the average decline is 37.3% (see chart at bottom).

    Past performance is no indicator of future performance, "but if it were, today's bear market ends Oct 19th '22 with S&P500 (SP500) (SPY) at 3000, Nasdaq at 10000," Hartnett said.

    The lead indicators of bear market were a trough in yields and the U.S. dollar and a peak in emerging market, crypto and speculative tech like biotech in Q1 2021, Hartnett added.

    Only once "yields & US$ peak, and floor in EM, crypto, speculative tech follow, should risk be added, first and foremost in corporate bonds – we are not there yet (and note speculative tech will remain in bear market for next 2 years, a floor does not = new bull market)." he added.

    VALE -1.62%May 06, 2022 10:44 AM ET23 Comments

    Vale (NYSE:VALE) said Friday it signed a long-term contract to supply Tesla (NASDAQ:TSLA) with nickel, one of the raw materials that is vital to make the kind of batteries used in most electric vehicles.

    Under the deal, Tesla (TSLA) will purchase nickel from Vale's (VALE) mines in Canada, which produced 76K metric tons of nickel last year; financial details are not provided.

    Vale (VALE), the world's biggest producer of nickel and iron ore, said the agreement is part of its plan to increase sales of its low-carbon, high-purity nickel to the electric car market.

    The company's operations include Sudbury – one of the largest integrated mining complexes in the world – and the Thompson mine in Manitoba, which has 5M metric tons of untapped nickel that Vale wants to exploit through new processing technology.

    Vale (VALE) recently reported its Q1 iron ore production fell 6% from a year ago and 22.5% compared to Q4 2021.

    DASH -2.35%May 06, 2022 10:05 AM ET1 Comment

    DoorDash (NYSE:DASH) peeled off 10.96% in early trading on Friday to reverse an initial post-earnings rally after the company reported sales and EBITDA above expectations.

    Analysts have cut their price targets on DASH in reaction to multiple compression that has swept over the tech and online retail sectors. Mizuho note that it dropped its EV/EBITDA multiple on DASH to 16X from 25X with the industry multiple going to 14X from 23X. That led to a price target cut to $100 from $150.

    UBS kept a Neutral rating and clipped its price target to $94 from $118. The firm warned that the DASH strategy of reinvesting core profits into new verticals could mute near term margins in a tap that is more interested in profits than growth.

    Other price target cuts were in from Susquehanna (to $100 from $145), Barclays (to $80 from $145) and Wells Fargo (to $140 from $170).

    Despite its PT cut on DoorDash (DASH), Wells Fargo stayed positive on the long-term upside and kept an Overweight rating in place.

    Analyst Brian Fitzgerald: "We see lots of runway, with new growth vectors from new categories, Intl growth, expanding platform services, and advertising. DASH continues to focus on selection, quality, affordability, and the consumers' enduring demand for convenience, as it extracts inefficiencies from the network (benefiting both customers and Dashers)."

    Dig into the DoorDash earnings call transcript.

    HD -1.57%May 06, 2022 9:35 AM ET18 Comments

    The trend in home improvement stocks is bringing back some bad memories, according to Gordon Haskett analyst Chuck Grom.

    In a note to clients on Friday broadly downgrading the sector, he explained that while there is reason to remain constructive on many names, the rapid increase in uncertainty pervading the market has completely upended his prognostications.

    “Over the past couple of months, the rules of engagement have clearly changed,” Grom wrote. “We are having some déjà vu back to 2006/2007 before the GFC.”

    He explained that a confluence of rising rates, a reversion to pre-pandemic home improvement trends, a consumer that may not be keen to take persistent price increases, and likely margin erosion portends poorly for the space.

    “While most retailers have yet to experience any inelasticity issues on passing along price increases…it’s probable that at some point in the coming months the consumer is going to balk,” Grom wrote, adding that trends from the restaurant space have telegraphed this turn.

    As such, even at low valuations relative to historical trends, Grom does not see much attractiveness in the sector. Further, he expects more incremental sellers versus incremental buyers in coming months and rallies are reined in.

    In the sweeping industry review, Grom downgraded shares of Home Depot (NYSE:HD), Lowe’s (NYSE:LOW), Tractor Supply (TSCO), Floor & Decor Holdings (FND), Restoration Hardware (RH), Wayfair (W), and Williams-Sonoma (WSM).

    Downgrade to “Accumulate”

    • Home Depot (HD), price target cut from $355 to $330

    • Lowe’s (LOW), price target cut from $255 to $225

    • Tractor Supply (TSCO), price target cut from $260 to $230

    • Floor & Decor Holdings (FND), price target cut from $100 to $90

    Downgrade to “Hold”

    • Restoration Hardware (RH), price target cut from $465 to $330

    Downgrade to “Reduce”

    • Williams-Sonoma (WSM), price target cut from $200 to $130

    • Wayfair (W), price target cut from $80 to $60

    Speaking to the distinctions, Grom advised that the “Accumulate” grouping represents businesses that are structurally sound and long-term prospects remain positive. The stocks are merely victims of the aforementioned macroeconomic and earnings issues and therefore rangebound.

    For Restoration Hardware (RH), which stands alone as a “Hold,” demand trends were cited as likely to disappoint while production issues persist as well. The company is also notable for its early call on inflation impacts to its business.

    Finally, Williams-Sonoma (WSM) and Wayfair (W) were downgraded to a sell-equivalent based upon “demand destruction from higher prices” and the anticipation of promotional activity as supply chain dynamics shift.

    “Home furnishing suppliers and retailers are now in an over-supplied position with too much inventory now in the channel,” Grom explained. “This will 100% lead to a much greater promotional cadence over the balance of 2022.”

    He expects that this activity will hit margins as oversupply likely comes to bear.

    Shares of nearly every name downgraded are nearing its 52-week nadir, with the notable expectation of Tractor Supply Company (TSCO).

    KGC -1.40%May 06, 2022 9:02 AM ET3 Comments

    • Barrick Gold (NYSE:GOLD) CEO Mark Bristow ruled out a potential purchase of Kinross Gold (NYSE:KGC) after speculation about a possible deal.
    • Bristow said a Kinross (KGC) deal doesn't make financial sense and he characterized Kinross's core portfolio of gold mines in Brazil, the U.S. and West Africa as "marginal," according to a Globe & Mail report, which cited an interview with Bristow.
    • Although Bristow isn't interested in Kinross (KGC) he didn't rule out another large-scale acquisition in the next few years, according to the report.
    • Also see from Wednesday, Barrick says Q1 'softer' as expected but on track to meet full-year guidance.

    BA -1.38%May 06, 2022 8:45 AM ET19 Comments

    Boeing (NYSE:BA) shares have descended to lows not seen since the dark days of the pandemic, despite an uptick in air travel and a ramp up in production. Is now the time to buy?

    Production and Regulatory Woes Cut Into Earnings

    As of Tuesday night, shares of BA had dropped 20% over the previous 30 days, closing at $153.70, a price range not seen since late October 2020.

    The decline for BA has been steeper than that of its closest competitors. In comparison, Airbus (OTCPK:EADSY) shares have fallen 9% while those of Embraer (ERJ) have declined 12% and Lockheed Martin (LMT) have slid 3%.

    BA shares have been under considerable pressure in recent months, as investors worry about continued delays in the resumption of deliveries of its 787 Dreamliner, which were halted in May 2021 over quality control issues. The FAA, which is reviewing BA’s certification plan for the planes, has yet to announce when deliveries can resume.

    According to a recent Reuters report, the aerospace manufacturer had hoped to resume Dreamliner deliveries in May. The company is now guiding for deliveries to resume in the second half of 2022.

    BA shares were also pushed lower on April 27 after it reported a dramatically wider-than-expected Q1 loss, with revenue missing analyst estimates by $1.91B.

    Adding to its woes, the company also said it was pausing production of the 777X airliner due in part to certification delays and weak demand. Deliveries of the plane are now expected to begin in 2025, about a year later than anticipated. BA also recorded an unusually high number of charges related to its fixed-price defense contracts.

    On the bright side, BA added that it was ramping up production of its 737 MAX to 31 per month in Q2. The aircraft had been grounded worldwide from March 2019 to November 2020 following two crashes.

    Is BA a Buy?

    Morgan Stanley analysts said in a note dated April 28 that they saw BA’s stock drop as a buying opportunity. However, the firm reduced its price target to $215 from $230 to reflect lowered expectations for BA’s defense business. The firm maintained its Overweight rating on the stock, citing in part improving global air traffic.

    Baird analysts were more cautious, reducing their price target to $245 from $306 with an Outperform rating.

    “787 uncertainty is the primary issue for the BA stock as it generates the most cash on a unit basis,” wrote Baird analysts in a note on April 28. “While management won’t front-run the FAA, the open-ended nature of not having a delivery restart date will remain an overhang on the BA stock.”

    Wells Fargo analysts maintained their Overweight rating on the stock but lowered their target to $214 from $250 in a note dated April 27. The analysts added that they didn’t see much downside to the stock as it was trading at less than half its pre-COVID price.

    “We think resumption of 787 deliveries and 737 MAX China recertification remain keys to the stock working, although the timing of these events is difficult to call. With the stock in the $150 per share range, we still think the risk-reward remains skewed to the upside,” they wrote.

    As of Wednesday, Wall Street analysts, on average, rated BA a Buy. Of the 23 analysts tracked by SA over the last 90 days, 12 rated it a Strong Buy, five had it a Buy and four gave the stock a Hold recommendation. On the bearish side, there were two analysts who have issued a Strong Sell opinion. SA authors, however, rated Boeing a hold, on average.

    SA’s Quant Ratings have the stock labeled as a Hold. While the company earned a C for growth and a D for valuation, it also received a D+ for revisions, a D for momentum and a D- for profitability.

    For a more in-depth look at Boeing (BA), check out SA contributor Dhierin Bechai’s “Boeing Buy Rating Tumbles on Miserable Earnings Miss” or Trapping Value’s “Boeing Bulls Capitulate, Look to Buy This Below $100”.

  22. W -1.47%May 06, 2022 8:05 AM ET4 Comments

    Wayfair (NYSE:W) fell another 2.30% in early Friday trading after a 25.68% shellacking on Thursday in reaction to soft earnings. On Wall Street, analysts are burning up pencils revising their ratings and price targets.

    Piper Sandler downgraded Wayfair (W) to a Neutral rating after having it slotted at Overweight.

    "While we continue to see healthy long-term potential for Wayfair in the home furnishing space, we believe investors have no patience for negative EBITDA and negative FCF companies in the current environment," updated analyst Peter Keith.

    Keith also said Wayfair's (W) order volumes are suspect due to the impact of higher pricing.

    Wells Fargo said it believes Wayfair (W) suffers from a "wrong stock, wrong tape" syndrome with investors' appetite for high growth, negative EBITDA pandemic winners very low. The firm slashed its price target to $65 from $100.

    Elsewhere on Wall Street, Wedbush cuts its price target to $68 from $85, Guggenheim lowered its PT to $100 from $175, and RBC Capital Markets hacked its PT to $76 from $137.

    Shares of Wayfair (W) fell to a multi-year low of $65.32 on Thursday.

    AA -3.47%May 06, 2022 7:35 AM ET2 Comments

    Aluminum prices in London fell to four-month lows on Friday, as concerns about demand created by slowdowns in manufacturing activity in China and elsewhere were reinforced by the strong dollar, Reuters reports.

    London Metal Exchange benchmark aluminum (LMAHDS03:COM) could be headed for its sixth straight weekly loss, and recently traded -0.7% at $2,895/metric ton after earlier touching $2,888/ton, a 30% decline since early March and the lowest price since January 6.

    Alcoa (NYSE:AA) shares have dropped more than 10% during the past week; other potentially relevant tickers include (CENX), (ARNC), (KALU), (ACH), (JJU)

    "Concern about growth and demand headwinds from China's ongoing COVID lockdowns is a primary driver of the selling pressure in base metals," AMT analyst Tom Mulqueen told Reuters.

    China's factory activity in April declined at the sharpest pace in 26 months, while manufacturing activity in the U.S. and the euro zone also has slowed.

    Among other metals, zinc (LMZSDS03:COM-2.1% at $3,824/ton, while copper, lead, tin and nickel all posted small losses.

    Commodity-linked equities plunged Thursday as part of the broader equity selloff, pressured by rising interest rates.

    FYBR +0.77%May 06, 2022 7:03 AM ET

    • Frontier Communications Parent press release (NASDAQ:FYBR): Q1 GAAP EPS of $0.26 beats by $0.03.
    • Revenue of $1.45B (-13.7% Y/Y) in-line.
    • Built fiber to a record 211,000 locations.
    • Adjusted EBITDA of $509 million.
    • Added a record 54,000 fiber broadband customer net additions, resulting in fiber broadband customer growth of 10.4% from the first quarter of 2021.
    • Reaffirmed its operational and financial guidance expectations for 2022: Adjusted EBITDA of $2.00 – $2.15 billion; Fiber build to at least 1 million new locations; Cash capital expenditures of $2.40 – $2.50 billion; Cash taxes of approximately $20 million; Net cash interest payments of approximately $430 million; Cash Pension and OPEB expense of approximately $75 million; Cash pension and OPEB contributions, including a catch-up from contribution waivers during bankruptcy, of approximately $135 million.

  23. OK, I'm off to Vegas – have a great weekend, folks,

    - Phil

    Viva Las Vegas GIFs | Tenor

    First time actually going somewhere since Thailand in Christmas, 2019.

    I've been to Orlando, Naples, Miami and Key West but no airports.

  24. have a great trip 

  25. Be safe and enjoy Vegas, Phil!

  26. Safe trip Phil, givem hell!

  27. So it is 8 o'clock and we are about to board on time.

    The airport is very crowded and seems to be functioning normally.  

    I would say about 75% of the people are not wearing masks I haven't worn mine walking around but I am putting it on now that I'm sitting by the gate. I assume on the plane the percentage will be the same.

  28. First class seat on Spirit does not recline!   It's like a sport seat in a sports car, comfy but thin.  No screen.  

  29. Not that comfy 5 hours later.  $15 for Wi-Fi – ther is no end to how many ways they gouge you!   No free water either – $3.50.  That should be illegal…

    And we're stuck on the runway waiting for a gate.  

  30. Welcome back Phil, no mention of Vegas? What happens in Vegas stays in Vegas?