Biden spoke last night.
The President pledged that America needed to “finish the job,” on keeping Drug Prices low, increasing Taxes on the wealthy, making Child Care and Housing affordable… saying there was a lot more left to do to reshape Government programs on Health Care, Climate Change, Infrastructure and more.
He got booed for his troubles, from Republicans who shouted “liar” while he spoke, which made his calls for bi-partisanship kind of a joke. The President sparred with Republicans, depicting them not as normal, but extreme. The best example of this was on Medicare and Social Security, where he riled up House Republicans, accusing some of wanting to cut the popular entitlements. He was careful in that section to note that “some Republicans want Medicare and Social Security to sunset every five years.”
When Republicans took the bait and shouted that’s not true (it very much is), the President said “Good, we all agree, they are off the table” – a nice trick to put it out in front of the American people but it will never be off the table until we raise taxes to fund SS and Medicare properly or, God forbid, actually reform the system so it isn’t so expensive.
With 65M Americans (20%) depending on Social Security for a large (sometimes all) of their income and on Medicare for their Health Insurance, the Democrats WANT them to be a major campaign issue. Unfortunately for Republicans, the President looked sharp during the speech, making their “Senile Joe Biden” narrative harder to sell – even to their Fox-fed constituency.
We had a huge rally yesterday after Powell spoke at a conference but, as you can see from the volume lines, more people actually sold than bought and we expect that to follow-through today as most of these rallies seem to end up being nothing but “pump and dump” – as Fund Managers and Banksters stir up excitement so they can dump shares on the Retail dip buyers.
Speaking of Retail Buyers – yesterday’s Consumer Credit Report showed a 50% REDUCTION in spending in December and that does not bode well as Retailers begin to report their earnings. As you can see from the chart, Savings are way down and Credit Card charging is way up and, apparently, we are reaching the limits Consumers can stand.
At the same time, Credit Opportunities are being taken away from people and businesses, as standards a tightening in a way that usually signals a Recession. Tightening standards indicate that the lenders don’t have confidence in the borrowers’ abilities to pay. It is also a reflection of the banks’ abilities to put their money to work in less-risky ways. With the riskless Fed Funds Rate now approaching 5%, why lend it to a consumer for 6.5%?
And on Wall Street, Investor Sentiment couldn’t be much lower, with only 32% of the clients surveyed by JP Morgan planning to increase their exposure in the near-term.
We made some bearish moves in our Short-Term Portfolio (STP) hedges yesterday, taking advantage of the move up to add some cheap protection. That puts us in a position to go shopping for some longs. Just because the overall market may be hard to invest in, doesn’t mean there aren’t a few hidden gems out there that are worth our attention.
ENPH had really good earnings last night, Revenues up 75% from last year. Not cheap (43x) but with that growth it’s worth a look. No debt is attractive though they’ve used more than half of their $350M surplus in the last two years. They make micro-inverters for solar panels so essentially a critical part for a growing industry. $228 is $31Bn and they should be making about $750M in 2023. They were $140 in May and $325 in December – so a crazy stock but worth watching.
Last night API showed a 2.2M draw in Oil but up Gasoline was up 5.3Mb (another crazy build) and Distillates up 1.1Mb so net + 4M is not good but the EIA (timing is everything) raised demand outlook by 60,000 barrels per day for 2023, so now +1.11Mb from +1,050… Did you hear that, the RAISED THE DEMAND OUTLOOK!!!
That’s all it takes to send oil higher. What a joke!
Pump it up!
And, of course, anything negative sends fragile /NG back down (used to be a honey badger)
The bond market knows what going on, even if the stock market doesn’t.
The volatility in ENPH makes for exceptional premium. Like the DITM TSLA play floated when it was near 100, you can build a DITM BCS and finance nearly all of it with a DOTM put sale. When it bounced off 200 into earnings I picked up (4) ’25 150/200 spread against the sale of (2) 160 put for net $2000 on the $20000 spread. Still net $3500 after the pullback this morning, breakeven in the 160’s.
I just put the IQ8s into our residential rooftop array in SoCal. Installers all love them and a potent potential benefit of these systems for those of us affected by grid outages is that they are to my knowledge the only approved battery-free grid-forming inverter hardware out there at the moment. So while honoring all code requirements for grid islanding, you can keep your house powered during a grid outage for most of the day, running AC, fridge, powering EVs, etc – 50% or more of your array nameplate power. This was a major factor for us. The piece of hardware you need to support this is only ~$2k, much cheaper than even a too-small battery. Works as advertised in our testing. Microinverters of course also have substantial native efficiency advantages compared to string in a built environment where intermittent shade is unavoidable. I don’t see that substantial niche ever leaving them, and they’re competitive even without it. This engineer also likes that a single inverter failure takes out 1/24 of your capacity, not 100%. Swap it out at your leisure.
Great color commentary, thanks. Didn’t know it was so cost-competitive – no wonder they are growing like gangbusters.
EIA even worse than API but no one seems to care…
Crude inventory up by 2.4M barrels for week ending February 3 – EIA
Feb. 08, 2023 10:34 AM ET
6 stocks to watch on Wednesday: Uber, CVS, Chipotle and more
Feb. 08, 2023 8:51 AM ET
The futures pointed to a lower open on Wednesday, signaling a moderation after a sharp rise the previous day. Comments from Federal Reserve Chair Jerome Powell eased concerns that last week’s strong jobs data would prompt a sudden swerve back to an ultra-hawkish stance. Here are some stocks to watch on Wednesday:
Phil. / ENPH – I”m not sure what the analysts are saying after earnings. I’ve been invested in them for the last 3 years…. This is my top renewable energy holding – SEDG and SPWR are my others. This is by far the best company in the industry.
They have a new inverter – IQ8 – that has the highest efficiency rating and the highest quality rating ( backed by the longest warranty in the industry) and short installation times which is key for their partners. They are growing the EU business by +100% Y/Y and US by 50%. By the Way their profit is growing faster than revenues. Q4 profit growth of 190%m Revenue 75% growth. The IQ8 which is driving a GM of north of 55% is only 65 Percent of sales and will grow to majority by end of year. Operationally during the pandemic they ran better than most companies growing they business profitably. The CEO is not only strong technically but he’s an outstanding operations guy. The Payback for the systems in EU is 5 years, and the US is also 5 years. The Inflation Reduction Act (IRA) is going to drop an additional 20 to 30 cents per KW Hr to the bottom line. They they are now focusing on batteries.. They will ramps up a new design this year. This will not only improve installation time and capacity but also has higher margins. I have them outlooked growing conservatively
’23 45 % this for an EPS of 6.9Sh
’24 at. 35% for a 8.9 / sh EPS
This warrants a 30 multiple and 300 ish in 24
Above no’s are no gaap
I agree, they look very strong. I have to overcome my aversion to chasing growth stocks sometimes.
This is interesting, the Calendar from Econoday (the one I use on Mondays) is usually pretty accurate but this week it listed just two Fed speeches (no Powell) and today alone there are 4:
Wednesday’s economic calendar
Feb. 08, 2023 12:00 AM ET
We’ll see how the note auction goes. Should be about 3.7% but the Fed Funds rate is now 4.58% (a weighting between 4.5 and 4.75, not the average) which indicates 10-year buyers feel rates will go back down over the next decade.
2-year notes are 4.47%, that’s all very inverted (long-term lower than short-term), of course and the reason it’s supposed to be a Recession Signal is it indicates demand for money now (evidenced by willingness to pay more for it) is higher than it will be therefore: the economy is slowing down.
Also consider what we looked at this morning with tighter credit standards. If you are a bank and you can borrow money for 10 years at 3.7% and lend it for 2 years at 4.6% – that’s a guaranteed win and, since they can multiply the borrowed money using fractional reserves – it’s a very nice risk-free return – a lot smarter than lending it to those Consumers who are maxing their credit cards and eating into their savings.
At what price does GOOG become attractive?
Same question here.
I dunno, that 90 day chart doesn’t make me eager to jump in.
We added GOOGL in late September in the LTP and we doubled down at the end of November. While $90 was a good price, I’m now concerned about all these OpenAi things making Google’s life hell. First of all, MSFT is stepping up their game and other people are using it as well.
More importantly, where’s the business model? If you ask Google what’s the best Pizza in Delray Beach Florida, you get a page of mainly adds and links you have to figure out but mainly it’s just Yelp or whoever pays the most to get ranked.
If you ask Chat GPD it says:
Here’s a brief overview of the three highly rated pizza restaurants in Delray Beach, Florida:
Just text, no ad revenues, no hassle for me clicking around. This is a problem for Google.
Of course, this is how the Internet was SUPPOSED to be and it’s GOOGL and companies like them that hijacked what was supposed to be a free and open network and wall-papered it with advertising and data mining.
Yay! Chat GDP is smarter than my programmer!
There’s a little HTML link on the comment bar and I asked Chat GDP if it could change the LTP call I made into blue and it just spit out the code for me. Then I asked it if can be coded onto the comment bar and it spat out a big thing of code for that that I don’t know how to implement but hopefully my programmer – who said it wasn’t possible – will be able to do.
I wonder if we asked Chat GDP if an option trade was bought or sold. Also could it look back to see if an option trade added to open interest?
For example, there were 800 Sept $50 puts traded in TFC. $50 is a little out of the money but the price looks closer to the asked than bid.
It only has data up to 2021 but it will be amazing once it goes current and, of course, I’m sure GS and JPM already have live-action versions in beta.
They are already using IBM Qiskit commercial interfaces as are the big HFT guys.
Oh that’s going to take things to a whole new level.
I just wondered if Open AI could understand what you just said out of context and it did a scary good job:
Me: What does this mean? “They are already using IBM Qiskit commercial interfaces as are the big HFT guys.”
Open AI: This statement likely means that some organizations (referred to as “they”) are using IBM’s Qiskit, a software platform for developing and running quantum computing programs, for commercial purposes. Additionally, the statement mentions that large high-frequency trading (HFT) firms are among the organizations using Qiskit commercial interfaces. This suggests that these organizations are utilizing Qiskit to potentially gain a competitive advantage in their business operations through the use of quantum computing.
I’m telling you, we may have only weeks left – not years… 🙄
Where’s the link ?
Sorry. Didn’t know that THAT was the link. Lol
Webinar ended up being a huge discussion on AI.
I’m glad things are pulling back – rally was not deserved.
/NG back to $2.40 again – that’s why we took money and ran yesterday. Sometimes it keeps going up but you don’t count on being lucky when you are behind.
/CL still around $78.50 – ridiculous.
So, after thinking about AI some more, GOOGL might be in real trouble. Alta Vista was king until Google came along and they are now long dead.
I was going to do some work but our Webinar conversation inspired me to just ask OpenAI, who says:
Here are 10 well-known websites that no longer exist:
See, what’s the point to us? I was demonstrating (in a very scary fashion) how easy it is to write an article about Artificial Intelligence by simply asking OpenAI a couple of questions. A few follow-up questions and we’ve written a novel.
That’s cute but what happens when 100m people decide to be novelists, simply because they can say “Write a story about a french girl who was abandoned on a doorstep as a baby but grew up to become the President of France”.
Here’s what I get in 30 seconds.
“Once upon a time, in a small French village, a baby girl was found abandoned on the doorstep of a kind-hearted couple. The couple, who had been trying to have a child of their own for years, took the baby in and raised her as their own. They named her Isabella.
“Growing up, Isabella was a bright and curious child, always asking questions and seeking knowledge. She excelled in her studies and showed a strong aptitude for leadership. As she grew older, her passion for politics grew, and she knew she wanted to make a difference in the world.
After completing her studies, Isabella began working in the public sector, quickly rising through the ranks due to her intelligence, dedication, and charisma. She became known for her unwavering commitment to justice and equality, and her speeches inspired many.
“As Isabella’s reputation grew, so did her popularity. People across France began to see her as a leader, someone who could bring change to the country. And so, when the time came for the next presidential election, Isabella threw her hat into the ring.
“The campaign was tough, but Isabella’s message resonated with the people. She talked about her humble beginnings and her determination to use her position to help those who had been left behind, just as she had been. Her speeches were passionate and moving, and on election day, she won by a landslide.
“Isabella took office as the President of France, the first woman to ever hold the position. During her time in office, she implemented a number of reforms aimed at helping the country’s most vulnerable citizens. She worked tirelessly to create job opportunities, improve education, and ensure that everyone had access to quality healthcare.
So there’s the outline and now all I have to do is ask follow-up questions about each section (and follow-ups to those) and I can have 200 pages by this evening. This is game-changing stuff folks!
Unfortunately, in the short-run, it means anyone with half an idea will be able to fill the internet with AI-generated crap and the crap will very quickly overwhelm the total sum of human knowledge (130M books have been written in the past 600 years).
Out of 8Bn people, do you not think 100M (1%) think they can write a book and, since there’s no cost to publish and no effort to write – what do you think is going to happen? Sure, it’s not actually writing if all you do is throw ideas at a robot but anyone with a kid knows the person with the idea is generally thrilled to hear it thrown back as a story.
Not only can you write a book but you can self-publish on-line, sell it on AMZN (possible benficiary of all this) and build a web page and promote it and optimize it for SEO, etc.
That’s just stage one. Then it will be movies, TV shows, music….
The colleges are right to be concerned -how many “research” papers will be done by AI? How many theses?
Do I need Gordon Ramsey to tell me how to make Duck a L’Orange?
Duck à l’Orange is a classic French dish that combines the rich flavor of duck with the sweet and tangy taste of orange. Here is a recipe for making this dish:
No, apparently I do not…
How about Character AI’s Gordon Ramsay? Same question:
Interesting, right? The instructions aren’t as good but better specifics to elevate the meal.
I think I’m on my way to writing my first cookbook. I guess we can ask Davinci to illustrate it…
This is all getting out of control very fast!
Here’s the headline: “Enphase shares sink on expectations for Q1 slowdown in U.S. business”
Here’s the reality: “Enphase (ENPH) forecast Q1 revenues of $700M-$740M, above $674M analyst
”Here’s what the market focuses on: U.S. business will be “slightly down” in Q1 compared to Q4 2022, primarily driven by seasonality and the macroeconomic environment
This is why we have an advantage over the machines – for now.
And it booted me out of the session.
I just tried and it said OpenAI was at capacity, but could notify me when it was available
Yeah, you just have to try back until it’s free. Noon to 6pm are the worst times.
This is fun while you wait: https://beta.character.ai/
WOW! Go Disney! 2.5bn in cost cuts 3bn in cost savings…. Looks like Peltz is really working his magic!
Very nice. I wonder if that counts dumping $1Bn in debt on DeSantis?
These guys have great graphics: https://plattslive.com/commodity/crude-oil
This one is not pasteable but very interesting: