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Off-Target Tuesday – TGT Profit Warning Spooks Retail

Buying habits are changing.  

This is not news to people who've been listening to our Live Trading Webinars for the past few months or followed along in our PSW Reports or our Live Member Chat Room (all of which you can be join right HERE).   In fact, just last Thursday we decided TGT was cheap enough and opened the following trade at 1:40 pm for our Long-Term Portfolio:

  • We talked about how silly TGT is at $160 and we sold 5 2024 $200 puts in the LTP for $19.85 ($9,925) and there's nothing wrong with that TARGET (so clever!) so let's add 15 TGT 2024  $150 ($32.50)/200 ($13.50) bull call spreads at $19 ($28,500) and that will put us in overall at net $18,575 on the $75,000 spread.   If TGT goes lower, we sell 50 more calls and add 10 more longs.  

We already had a loss on the puts but we sold 5 2024 $200 puts for $19.95 so our net target on 500 shares is $180.05 and our position looks like this:

TGT Short Put 2024 19-JAN 200.00 PUT [TGT @ $159.67 $-1.37] -5 4/7/2022 (591) $-9,925 $19.85 $30.53 $-19.85     $50.38 - $-15,263 -153.8% $-25,188
TGT Long Call 2024 19-JAN 150.00 CALL [TGT @ $159.67 $-1.37] 15 6/2/2022 (591) $48,750 $32.50 $-0.48     $32.03 $-1.26 $-713 -1.5% $48,038
TGT Short Call 2024 19-JAN 200.00 CALL [TGT @ $159.67 $-1.37] -15 6/2/2022 (591) $-20,250 $13.50 $-0.65     $12.85 $-0.93 $975 4.8% $-19,275

TGT should be down around $145 this morning on the news but taking a writedown on inventory is not really news and TGT expects to return to normal margins (6%) in the second half of the year so, if you are a long-term investor, NOW is the time to be buying, not selling.  When a stock plunges 10%, there are things we can take advantage of and thing one will be selling 10 of the 2024 $150 puts for $25.  That will be a pre-roll of the short $200 puts but, since we don't think $180 is an unreasonable target – we're not going to buy those back until TGT bounces – perhaps next quarter.

Inflation MeterThe other thing we can take advantage of is the way the $140 or $130 calls that are in the money will lose significantly more price than the out of the money 2024 $150 calls we have – which will gain premium as the volatility of the stock goes up.   We will take advantage of that by rolling our $150 calls (now $32.03) to the $140 calls ($37.50 at yesterday's close) or the $130 calls ($44 at yesterday's close) as long as we can pay less than $5 for $10 worth of position.

Assuming we spend $5 to roll to the $140 calls, that would be $7,500 spent for the roll and $25,000 collected on the puts and we paid $18,575 for the overall position so now our net cash in drops to $1,075 for the $140/200 spread that is $7,500 in the money at the assumed $145.  We are obligated to own 500 shares at $200 ($100,000) and 1,000 shares at $150 ($150,000) so our commitment is owning 1,500 shares of TGT at $166.66.  

As long as TGT stays over $120, then our downside risk is about $45 x 1,500 shares = $67,500 but we would mitigate that by rolling our short puts and selling short calls to cover.  For example, if we are assigned the stock at $166.66 and we sell the 2024 $140 calls for $35, then our net would be $131.66 

Customer demographicsThis is a process called "scaling in" to a position – we begin with a small commitment and then, if the stock gets even cheaper for what we consider to be poor reasons – we adjust and add to it. In the case of TGT, sales are not off – they simply have the wrong mix of inventory as consumers are scaling back their spending habits and they need to adjust but $145 is $67Bn in market cap for TGT, who made $6.9Bn last year and, even with the adjustments, should make $4Bn this year and $6Bn again next year so $67Bn is stupidly cheap – and we'll take advantage of it!  

This is why we like to have plenty of cash (75% in our LTP) on the sideline in a choppy market – you never know when things are going to go on sale…

Investors these days are very impatient – they only care about the current quarter and tend to miss the bigger picture.   Just this morning, while TGT was warning, Kohl's (KSS) got a $60/share offer from Franchise Group (FRG) for their whole operation – up almost 50% from yesterday's $42 close.  KSS has a market cap of $5.4Bn and $60 would be more like $8Bn, or about 11x KSS's $750M in earnings.  11x for TGT would be $66Bn – which is why we feel very safe adding to it at $145.

At the moment, we're very concerned about the S&P 500s struggles with the Weak Bounce line at 4,160 – it's been a losing battle so far:

It doesn't really matter how good a value our stocks are if the whole market is collapsing, does it?  Notice the bullish buying pressure on the MACD line is exhausting itself without having made any progress.  Look what happened in February, when the MACD failed to gain any traction – and then April was worse.  We really can't afford "worse" from where we are now but I also don't see any real catalysts that are likely to push things higher so we're still leaning heavily on our hedges – just in case… 

Yellen is testifying to Congress on Inflation today, that's not a positive and, as we expected, Commercial Property Sales are slowing – down 16% from last year.  Hotels, office buildings, senior housing and industrial properties recorded big drops in sales. Sales of other property types, such as retail and apartments, rose in April, but analysts and brokers said activity may be now slowing in those sectors, too, as rising interest rates keep some investors from making competitive offers

“To have it go from a very fast pace of growth the month before—the speed of that transition is shocking,” said Jim Costello, chief economist at MSCI Real Assets. A drop in sales can be an early indicator of stress in real-estate markets because prices are usually slower to change, he added.

Investors are finding that with the increased cost to borrow, their near-term rate of return runs below the interest rate on their mortgage. Lenders, in turn, are now tightening their standards for more-speculative deals.  In certain sectors, such as smaller industrial and retail real estate, prospective buyers that wrote letters of intent to purchase properties weeks ago are now dropping their bids because the cost to borrow has risen so quickly,

This is a long, slow cycle of rising rates and inflation – don't expect it to all suddenly come to an end – it's more likely early innings.


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  1. what are your suggestions for. new TCT positions for those that don't have current position??

  2. TGT position

  3. America’s hidden boom

  4. Good Morning.

  5. Good morning!

    TGT/Millard – From scratch, I'd go with:

    • Sell 5 2024 $150 puts at $23 ($11,500)
    • Buy 15 2024 $130 calls at $38.50 ($57,500)
    • Sell 15 2024 $170 calls at $18.25 ($27,375)

    That's net $18,625 on the $60,000 spread with $41,375 (222%) upside potential in 18 months if TGT can get back to $170, 

    Officially, for the LTP, we're selling 10 more 2024 $150 puts for $23 (opened at $24) and we are rolling the 15 2024 $150 calls (now $28.50) to 15 2024 $140 calls at $33.50 for net $5 ($7,500).  Unfortunately, TGT bounced back very fast – probably because I mentioned it in the main post, so my bad.

  6. Just buying TGT stock and selling the ATM 2024 straddle is a pretty good deal in PM now; the buying power is down by only 6.8K, and you end up making around 5K+ if it closes Jan 2024 above 155. 

  7. That's a good play RN.

    Good sign that TGT popped back – it means there are other buyers besides us who have had enough of this silliness.

    Most important article of the day is this:  America’s hidden boom

    Yesterday we talked about the survey but keep in mind that inflation is scary and people who watch Fox News, which is about half the country, hear nothing but how doomed we all are 24/7.  That then reflects back in surveys and feeds even further doom and gloom outlooks.

    If you ask the question differently, you get this:

    Of course this is last year but I doubt things got so much worse already.  Inflation is a journey and some of that journey you are behind, like gas prices, and some of it you get ahead with a raise and then gas prices go down, etc.  The trick is to see what's ACTUALLY happening to consumers – not even what they THINK is happening. 

    •  66% of Americans who do own houses are seeing their home values soar. The middle class has made a whopping $2.1 trillion from homeownership in the past 10 years, Fortune reports.
    • Jobs: 11.4 million are open. The unemployment rate is 3.6% — back to pre-pandemic lows.
    • Millennial homeownership: It’s at 43%, up from 37% last year.

    People who own a home they bought for $400,000 that is now $650,000 don't tend to take that into account when considering their current situation – since they don't plan on selling their home but if they put down $80,000 five years ago and made $125,000 in payments and now a $260,000 mortgage and $650,000 in sale value for net $390,000 return on $205,000 - they have done very well – even though it doesn't feel like it.  

    We get Consumer Credit at 3pm and we'll see what that looks like.  Last month it was:

    • Revolving credit increased $18.0 bln to $1.063 trln.
    • Nonrevolving credit increased $23.8 bln to $3.419 trln.

    So the change was $41.8Bn out of $4.5Tn so less than 1% and that's about as much as it's likely to change in a month:

    "Only" $1Tn is revolving (22.5%) and subject to the big changes in interest so far this year and let's say the 2% rise in rates takes away $20Bn in buying power – that's not enough to knock things off track, is it?

    11.4M $50,000 jobs means Corporate America is willing to spend $570Bn more on labor and they'll either fill new jobs or end up paying that money to keep the workers they have – either way – it's more money in Consumer's hands that far outpaces $20Bn in additional interest.  Like I said, people think very short-term when you ask about their situation.  If they just paid $100 to fill up the tank and $300 for a half-filled grocery cart – they are going to be in a bad mood, right?  They don't think about the fact that there's a $5,000 raise coming at some point that will pay for the whole year's gas or 20 trips to the supermarket.

     Certainly things are not hunky dory but they are also not that dire yet.  It will take about 6 months for consumers to run out of money and habits are only now just starting to change – a lot can happen in 6 months.  It will be December and the Republican House and Senate could order a recount of the 2020 election and Trump could be President again — stuff like that…

  8. The other big deal is tomorrow's 10-year note auction.  The first one after the Fed begins pulling out.

    • Moderna (NASDAQ:MRNAsaid the first participants were dosed in a phase 3 trial of its seasonal influenza vaccine mRNA-1010.
    • The Cambridge, Mass.-based company said in a June 7 release that the trial is expected to enroll ~6K adults in southern hemisphere countries and will evaluate the safety and immunological non-inferiority of mRNA-1010 to a licensed seasonal influenza vaccine in adults 18 years and older.
    • Moderna added that mRNA-1010 is one of several influenza vaccine candidates being developed in its respiratory portfolio.
    • "With the start of dosing for its mRNA-1010 program, Moderna now has four programs in late stage Phase 3 studies, including its SARS-CoV-2 booster, RSV, seasonal flu and CMV vaccine candidates. Beginning in the fall of 2022, the Company's Phase 3 pipeline could lead to three respiratory commercial launches over the next two to three years," said Moderna CEO Stéphane Bancel.
    • The four programs in phase 3 trials are for Omicron-containing bivalent COVID booster, influenza, RSV and CMV.

    THO +0.35%Jun. 07, 2022 10:39 AM ET1 Comment

    Thor Industries (NYSE:THO -0.1%) is called out by BMO Capital Markets to report robust FQ3 results on Wednesday.

    Analyst Gerrick Johnson pointed to elevated production levels for THO in the quarter, although dealer inventory levels are now above pre-pandemic levels with retail sales in a recent slowing trend. He noted that the RVIA has recently lowering its 2022 industry shipment forecast, which is a reason that some manufacturers have taken some downtime in May.

    Still, Johnson remained bullish on the RV and outdoor lifestyle. "While a moderation in near-term production maybe adversely impact THO's revenue over the next few quarters, we see it as a positive sign for the long-term health of the RV industry," he noted.

    BMo Capital Markets kept an Outperform rating on TGO and price target of $95.

    Shares of Thor Industries (THO) are down 26.60% YTD.

    XOM +2.99%Jun. 07, 2022 10:35 AM ET1 Comment

    Exxon Mobil (NYSE:XOM) and TotalEnergies (NYSE:TTE) are among Western energy companies poised to win stakes in a multi-billion dollar project to boost Qatar's gas exports, Bloomberg reported Tuesday.

    State producer QatarEnergy may announce its decision as soon as this weekend, according to the report, although first gas flows are not expected until 2026.

    The Qatar project is one of the largest ever in the natural gas industry and comes as Europe seeks to find replacements for Russian supplies; European Union top diplomat Josep Borrell and German Economy Minister Robert Habeck are among several officials that have visited Qatar in recent months to secure commitments of extra gas.

    Saad Al-Kaabi, Qatar's energy minister and CEO of QatarEnergy, said last year that talks about a sale of project stakes were under way with Chevron and ConocoPhillips, as well as Exxon, Total and Shell.

    Exxon (XOM+3.1% in early trading on Tuesday, topping $100 for the first time since 2014; Evercore ISI upgraded the stock today to Buy with a $120 price target.

    Jun. 07, 2022 9:25 AM ET

    Despite the rally Wall Street experienced last week, Citi reported Tuesday that market positioning remains bearish, with traders failing to enter the market with any concerted buying.

    "For six consecutive weeks since the beginning of April, investors continued to add new shorts and, hence, extend their bearish bias on the market," Citi stated in a note. "While this bearish momentum did fade at the end of May, the past week has shown no signs of any bullish flow momentum to support a more sustained rally from here."

    Citi added: "The large flow of new shorts has halted, but notably there are no signs of new long positions yet and ETF flows lack direction."

    The firm acknowledged that a short squeeze was possible but "the probability appears to be low." Meanwhile, the firm tracked "hardly any flow momentum" behind the recent rally.

    Citi noted that S&P 500 shorts are clustered around the 4,000 level, leaving the firm to conclude that "the balance would swing again if we break that level."

    Looking at Tuesday's market, futures are pointing to a lower open amid a warning from Target. See why one analyst thinks the retailer could have avoided inventory and supply chain issues with an investment in technology.

    EWA -0.56%Jun. 07, 2022 9:20 AM ET

    The Reserve Bank of Australia on Tuesday has lifted interest rates by the most since February 2000 in a move that caught investors by surprise.

    Moreover, the RBA increased its cash rate target by 50 basis points to 0.85%. Markets were expecting a move of either 25 or 40 bps.

    "Given the current inflation pressures in the economy, and the still very low level of interest rates, the Board decided to move by 50 basis points today," RBA Governor Philip Lowe said in a statement.

    Going forward, "the board expects to take further steps in the process of normalising monetary conditions over the months ahead," Lowe added. “The board is committed to doing what is necessary to ensure that inflation in Australia returns to target over time.”

    Australia joins more than 50 central banks worldwide that have raised interest rates by at least 50 bps in one go this year, as the globe faces ongoing inflationary pressures triggered by supply chain disruptions amid Russia's war in Ukraine and lockdowns in China, according to data from Bloomberg.

    Following the interest rate decision, the Australian dollar initially jumped briefly before erasing losses and sliding into negative territory. Government bond yields are rising across the board, with the 10-year yield rising 7 bps to 3.55% and 2-year jumping 17 bps to 2.76%, as of shortly before 9:30 a.m. ET.

    Related ETFs: iShares MSCI Australia (NYSEARCA:EWA -0.2%) and Invesco CurrencyShares Australian Dollar Trust (NYSEARCA:FXA -0.2%).

    Towards the end of May, the U.S. launched the Indo-Pacific Economic Framework for Prosperity.

    XLE +1.57%Jun. 07, 2022 9:17 AM ET2 Comments

    Goldman's Damien Courvalin updated the bank's oil price (USO) forecast, noting that higher prices are needed to rebuild inventories and create sufficient spare capacity. The bank notes the ongoing refining crisis will result in sustained, elevated refining margins, lifting retail prices and encouraging demand destruction. But even so, higher prices will be required to balance supply and demand by year-end 2023. On the bank's updated forecast, Brent oil (CO1:COM) will average $140 in Q3 (up from $125) and $130 in Q4. At $125 in 2023, the bank sees inventories and spare capacity normalizing by year end:

    Monday, Wall Street's resident oil bear Ed Morse from Citi also updated his price forecast. Ed sees Brent averaging $99 in Q3 (up from $87) and $85 in Q4. Citi sees an incremental 1.3mb/d of supply coming from Iran, though pushed this forecast to Q1 2023 from summer 2022. The bank also sees Russian production falling by 1.0-1.5mb/d, versus recent expectations of a 2.0-3.0mb/d loss. Ed has felt an impending recession will reduce demand and help balance markets, though little demand destruction has occurred thus far. Citi sees Brent (CO1:COM) averaging $75 in 2023.

    Barclays updated forecasts Monday as well, and now sees WTI (CL1:COM) averaging $108 in 2022 and 2023, with Russian volumes reduced by 1.5mb/d by year end 2022. Largely marking the bank's forecast to futures prices. Importantly, the bank no longer sees a normalization of inventories over the forecast horizon.

    Though most Wall Street banks are likely to continue to mark forecasts to the futures market, Goldman and Citi both have large commodity strategy teams making fundamental calls. Though the price forecasts differ greatly, the supply / demand margin for error is quite small. In June, Goldman estimates global supply at 99.2mb/d and global demand at 99.8mb/d, a 0.6mb/d deficit (<1%). With Wall Street and the investment community preparing for Q2 results, analysts are sure to remain focused on shale production forecasts (XLE), as even a small growth response to higher prices could push the market into surplus later this year.

  9. Phil- you would have to add that last sentence. Made me want to go to the toilet and let loose. The best part of the last year is not having to hear, see or listen to anything that lying, fat foul mouthed slob has to say!!

  10. TGT -2.11%Jun. 07, 2022 8:39 AM ET9 Comments

    Target’s (NYSE:TGT) surprise announcement of additional markdowns to come as it seeks to offload excess inventory and cancel orders is yet another indication of inventory issues playing out across much of the retail space.

    In an announcement on Tuesday morning, the retailer indicated it will invest to shore up supply chain issues and take significant pricing actions to move items off its shelves. Unfortunately, this action will trim operating margins to a range of 2% for the second quarter, well below the 6.5% expected by analysts. Importantly, many of these expectations were already cut in light of Target’s recent earnings disappointment.

    Yet, Target (TGT) is far from alone in falling lower on Tuesday as its inventory issues are far from unique.

    Indeed, its issues alongside fellow execution-focused retailer Walmart (WMT) have helped lead much of the retail space lower. The presumption is that, if Target and Walmart are having issues managing inventory, there is little hope their peers are doing much better as overall figures continue to rise.

    For Tuesday’s pre-market action, that thesis again seemed to hold sway as most of the retail space reeled in early morning hours. As margins are likely to be squeezed at Target, markdowns are presumed to hit much of the industry and therefore exacerbate inflationary pressures on many retailers. Declines in Tuesday’s pre-market hours were led by the likes of Ralph Lauren (RL), Dollar General (DG), and Walmart (WMT).

    Taking Stock of Inventory Trends

    However, as TJX Companies (TJX), Macy’s (M), PVH Corp. (PVH) and others displayed in their earnings of late, there is room to separate oneself from the pack. In fact, the inventory figures have been quite scattershot in recent earnings results with some retailers even seeing inventories fall from 2021.


    While it is a difficult balance to strike, given supply chain issues that have also caused many retailers to be left unable to meet demand, the diverse results nonetheless illuminate likewise diverse execution by the management of the respective companies.

    Further, there are clear consumer preferences playing out. In short, consumers continue to spend, but they are being quite selective in their shopping. The stark difference in results from Burlington (BURL), TJX Companies (TJX), and Ross Stores (ROST) perhaps exemplified this dichotomy most visibly given their similar business models.

    Off-Price Opportunity?

    That said, those latter off-price retailers have broadly been pinpointed as beneficiaries of the ballooning inventory trends, even if inventory at their respective stores seem wildly differing.

    “The unexpected events of 2020 have driven many retailer bankruptcies and thus, severe inventory dislocations,” Wells Fargo analyst Ike Boruchow wrote in a recent note to clients. “The last time a similar dynamic occurred was back in 2008, which was followed by a decade of off-price share gains and stable performance.”

    He indicated that if this trend repeats, off-price retailers like Ross Stores (ROST) and Burlington Stores (BURL) could be big winners. Considering TJX Companies’ (TJX) comparatively better inventory position, it could arguably be an even bigger winner in the present environment.

    Morgan Stanley analyst Kimberly Greenberger largely concurred, noting that off-price retailers are particularly well-positioned as inventory balloons and consumers trade down. While she acknowledged that “inventory is certainly elevated” across discount and off-price retailers, it does not dampen her bullish outlook given historical trends.

    “The current backdrop typically provides [Ross Stores] (ROST) its single best new customer acquisition opportunities,” she concluded. “We expect this time will be no different, which suggests sales trends should reaccelerate no later than 4Q22.”

    • Other retailers on the move: Abercrombie & Fitch (ANF), Urban Outfitters (URBN), The Gap (GPS), Dollar Tree (DLTR), Foot Locker (FL), Levi Strauss (LEVI), Capri Holdings (CPRI), Williams Sonoma (WSM), Five Below (FIVE), and BJ's Wholesale Club (BJ).

    Read more on dichotomous retail trading trends as of late.

    TUP +2.30%Jun. 07, 2022 8:38 AM ET1 Comment

    • Tupperware Brands (NYSE:TUP) has agreed to sell its Nutrimetics beauty business as part of its turnaround plan to divest non-core assets.
    • The Nutrimetics business operates in Australia, New Zealand, and France.
    • Terms of the divestment were not disclosed.
    • The move follows the company's sale of its Avroy Shlain beauty business in South Africa during the first quarter of 2021, and the sale of its House of Fuller beauty business in Mexico during the second quarter of 2022.

    AAPL +1.08%Jun. 07, 2022 8:25 AM ET24 Comments

    Apple's (NASDAQ:AAPL) innovation engine is at "full throttle," investment firm Morgan Stanley said, following the keynote address of the tech giant's annual Worldwide Developers Conference

    Analyst Katy Huberty, who rates Apple (AAPL) shares overweight with a $195 price target, noted that the greater cross functionality between operating systems, the two new M2 MacBook Pro and Air, integrated CarPlay and expanded health and fitness apps were the major highlights from the address.

    "What incrementally surprised us was twofold – first, that Apple introduced a new M2 SoC for the Mac – our checks were unclear on timing of the M2 introduction – and second, that in addition to the new MacBook Air, Apple upgraded the 13” MacBook Pro (2nd best-selling laptop in the world) to now include the M2 design," Huberty wrote in a note to clients.

    Apple (AAPL) shares fell 1.5% to $143.97 in premarket trading.

    The analyst also noted that the CarPlay updates that were announced, including better integration with existing infotainment systems and adaptions by manufacturers such as Ford (F), Audi, BMW and more, are significant. Not only does it put Apple (AAPL) "at the center of the auto software experience," but it may also be a part of the tech giant developing a car operating system and may be "a small taste of what's possible with a potential Apple Car project."

    Huberty also pointed out that the lack of any "meaningful privacy updates" that could hurt tracking by third-parties, as well as a "sneak peek" of partnerships or features for the upcoming mixed reality headset were noticeable, in light of recent news from the advertising industry, particularly Snap's (SNAP) recent warning.

    Nonetheless, Huberty noted that Apple's (AAPL) deep focus on integrating hardware and software continues to provide "an unmatched, and unreplicable, user experience."

    Several analysts told Seeking Alpha that Apple's (AAPL) new MacBooks were on their way to becoming a hit, with one expert pointing out they will become "two of the most-powerful laptops on the market."

    Trump/Pirate – He doesn't go away just because we ignore him.  

  11. It could be fun to see a tdump vs. DeSpicable primary in 2024…..

  12. Maybe a tdump VP choice?…..

  13. phil and pirate/trump returning im with you guys i would rather relive covid or endure ww3 .

  14. Desantis is the presumptive nominee. He wins back the suburban women for the GOP. Gun control legislation will be forgotten by then. Almost 50% of that party believes school shootings are just "collateral damage" for "freedom."

    Phil how's the backup plan to move to Jersey (the country) looking?

  15. I would rather/Tommy – Could get them all at once!

    Jersey/Pman – That's my retirement plan, just a question of when.  That's the thing, when I'm 75, I'm not going to want to deal with this crap and you never know who ends up getting elected – no matter where you go.  So I want to be in a nice, self-sustaining place with limited Government that's not too far from major cities but without likely having to deal with their crap if things get worse.  

    St Aubin, Jersey

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  16. AAPL +0.78%Jun. 07, 2022 12:02 PM ET1 Comment

    With the initial dust settling after Apple (NASDAQ:AAPL) kicked off its annual Worldwide Developers Conference, Wall Street analysts have started weighing in on how investors should evaluate the potential benefits from the company's announcements.

    At Needham & Co., analyst Laura Martin said that the "right way to evaluate Apple" is by looking at what she called the lifetime value per user [LTV]. Martin said that Apple's (AAPL) move to its M1 and new M2 Apple Silicon chips are key to driving the company's values higher because they allow Apple (AAPL) to "integrate its hardware across devices and to innovate its software features faster."

    Some analysts said that new MacBooks using the M2 chip that Apple (AAPL) showed off on Monday are already showing signs of becoming hit products for the company.

    Martin, who has a buy rating and $170-a-share target price on Apple's (AAPL) stock, said the company's hardware integrations add the most long-term value to the company because if a customer replaces their iPhone, Apple Watch, Mac computer and iPad over a five year period, "swapping out of any one device along the way makes all other iOS devices less powerful until those are also replaced."

    With regards to software, Martin said Apple's (AAPL) M1 and M2 chips are allowing the company to engage in faster innovation than has so far been possible.

    Martin said adding that features such as allowing iOS users to collaborate on documents in real time, giving parents the ability to set limitations that can be transferred to their children's multiple devices, and setting up Apple Pay to allow for consumers to make four payments for a purchase are key to the company's long-term value. Such innovations, "both attracts new users to the iOS ecosystems and locks existing customers into the iOS ecosystem longer," Martin said.

    In Martin's opinion, the biggest surprises to come from Apple's (AAPL) developers gathering were the things that didn't get any mention at all: Nothing about Apple TV, no new privacy crackdowns and no mention of anything related to augmented or artificial reality.

    The AR issue was seen by some analysts as the subject of a potential upcoming event that Apple (AAPLmight have planned on the technology.

    GLW -1.10%Jun. 07, 2022 11:47 AM ET

    • Corning (NYSE:GLW) has entered into a new $1.5 billion credit agreement, dated June 6.
    • That replaces the existing $1.5 billion credit agreement from 2018. The new commitment amount can be increased over the term by up to $500 million.
    • The new five-year agreement terminates in 2027; it was reached with JPMorgan Chase as administrative agent for lenders and allows for Corning to borrow in dollars, sterling, yen and euros.
    • No borrowings were outstanding under the existing credit agreement nor the new one.

    Jun. 07, 2022 11:43 AM ET4 Comments

    The U.S. Treasury issued updated guidance that prohibits U.S. investors from buying Russia's debt and equity in the secondary market, in a move to tighten sanctions on Russia for its invasion of Ukraine.

    The guidance applies to both Russian corporate and sovereign debt. It doesn't prohibit U.S. persons from selling or divesting Russian debt or equity, but neither does it require that they do so. "U.S. persons are not required to divest such securities and may continue to hold such previously acquired securities," the Treasury said in an FAQ.

    In its clarification of three executive orders, the Treasury said the purchase of shares in a U.S. fund that contains debt or equity securities issued by entities in the Russian Federation aren't generally considered a prohibited "new investment," as long as the holdings represent "less than a predominant share by value of debt or equity securities issued by entities in the Russian Federation."

    "As a result, U.S. persons may continue to invest in the fund, and the fund may continue to operate," it said. Also, the fund may divest itself of the prohibited holdings.

    The Russian ruble is down 0.7% against the U.S. dollar on Tuesday at $0.016.

    Not only did a group of allies bar Russian banks from the SWIFT messaging system that enables cross-border transactions, but a slew of corporations pulled out of the country in the wake of the in invasion.

    In May, the U.S. Treasury said it wouldn't renew a license that allows Russia to pay it debtholders through American banks.

    SOXX -0.26%Jun. 07, 2022 11:10 AM ET23 Comments

    • According to June 6 report of the Semiconductor Industry Association or SIA, global semiconductor industry sales were $50.9B in April 2022, a jump of 21.1% Y/Y; and 0.7% more than March 2022.
    • “Global semiconductor sales have increased by more than 20% on a year-to-year basis for 13 consecutive months, indicating consistently high and growing demand for semiconductors across a range of critical sectors. High global chip demand will necessitate more semiconductor research, design, and manufacturing in the years ahead, and we urge leaders in Washington to enact innovation and competitiveness legislation that ensures more of this chip production and innovation occurs on U.S. shores,” said John Neuffer, SIA president and CEO.
    • Month-to-month sales in the Americas +3.1%, Japan +1.6%, and Asia Pacific/All Other +1.2%, but fell slightly in China -0.6%, and Europe -3.3%.
    • Monthly sales data compiled by the World Semiconductor Trade Statistics (or WSTS) organization.
    • Top Semiconductor ETFs include: VanEck Semiconductor ETF (NASDAQ:SMH +0.1%) up 6% during the last one month; iShares Semiconductor ETF (NASDAQ:SOXX +0.2%) +5% in a month; SPDR S&P Semiconductor ETF (XSD +0.9%) +6.8% in a month; Invesco Dynamic Semiconductors ETF (PSI +0.6%) +5.3% in a month; ProShares Ultra Semiconductors (USD +0.5%) +6.8%; First Trust Nasdaq Semiconductor ETF (FTXL -1.2%) +3.8%
    • Top semiconductor market contributor reads: 'Semiconductor Stocks: Q2 2022 Overview'; 'Nvidia, On Semiconductor picked as top semiconductor stocks at BofA''; 'Invesco PHLX Semiconductor ETF: An Incredible Growth Opportunity'
    • Among top contenders in semiconductor space: Intel (INTC +0.0%); Micron Technology (MU -0.7%); Texas Instruments (TXN +0.2%); Qualcomm (QCOM +1.0%); NXP Semiconductors (NXPI +0.1%)

    INTC still laying around.  On track for our LTP position, still only net $36,360 out of potential $120,000 at $60 but it's $60,000 in the money at $45 so still great, even after we already gained $13,960.  Aren't options fun?

    INTC Short Call 2024 19-JAN 60.00 CALL [INTC @ $43.34 $-0.05] -40 1/27/2022 (591) $-19,000 $4.75 $-2.54 $0.10     $2.21 $-0.19 $10,160 53.5% $-8,840
    INTC Short Put 2024 19-JAN 45.00 PUT [INTC @ $43.34 $-0.05] -20 11/1/2021 (591) $-13,000 $6.50 $1.25     $7.75 $0.11 $-2,500 -19.2% $-15,500
    INTC Long Call 2024 19-JAN 30.00 CALL [INTC @ $43.34 $-0.05] 40 5/20/2022 (591) $54,400 $13.60 $1.58     $15.18 $-0.32 $6,300 11.6% $60,700

  17. World Bank dims outlook for global economy amid Russia war

  18. UBS is very bullish on PVH -

    Phil – what do you think? They are projecting $9.2 for the year

  19. The Fed’s new framework ages fast

  20. PVH/RN – $71 is $4.8Bn and they made $952M last year so very reasonable though this year and next, $650M is more likely and they lost $1.1Bn in 2021, which has left them with $1.5Bn in net debt.  So knock $30M off the profits but still fine but there won't be a catalyst, just a long grind back to 10x – which would be up 25% from here ($90).  

    I wouldn't go crazy but you can sell 2024 $60 puts for $11.50 and that's essentially free money so 5 gets you $5,750 to play with and then you can buy 10 2024 $60 ($24.50)/80 ($15.50) bull call spreads at $9 ($9,000) and that's net $3,250 on the $20,000 spread that's half in the money to start.  

  21. What insane moves:







  22. INTC/Phil Would you sugg buy back the short '23 $55 calls here? Maybe roll calls to '24 spread?

    50 INTC '23  $35 calls ($13.5)

    - 50 '23 $55 calls ($6.7)

    - 10 '24 $45 puts ($6.3)