Good morning!
Top Trade Members should see today's post for another review of our Income Portfolio and notes about hedging.
Keep in mind we do the same thing with our hedges that we do with our longs – take advantage when they are beaten up to improve our position…
We made an unexpected $23,000 in the Income Portfolio so we take about 1/2 of it to improve our hedges, locking in the other half and protecting the entire portfolio. We'll do the same with the STP as well.
- Carnival (CCL +24.0%) director Randall Weisenburger snapped up 1.25M shares.
- Weisenburger now holds a total of 1.40M shares.
- Carnival's pop today comes with the entire travel sector shooting higher on hopes for a lockdown end.
- SEC Form 4
- Shares of Luckin Coffee (NASDAQ:LK) have been halted for trading with news pending.
- It's already been a very active week for Luckin after its sales fraud disclosure on April 2.
- Previously: Margin calls at Luckin Coffee (April 6)
- Previously: Consumers make mad dash for Luckin Coffee freebie (April 7)
- Theme park stocks are gaining on optimism that stay-at-home orders could be lifted in four to eight weeks as suggested by Larry Kudlow this morning.
- SeaWorld Entertainment (SEAS +12.3%), Cedar Fair (FUN +9.4%) and Six Flag Entertainment (SIX +19.4%) have been trading with at least some risk seemingly baked in that parks might not open at all this summer.
4-8 weeks!!! Geez, how low were expectations if 8 weeks is a relief?
- White House economic adviser Larry Kudlow hopes that four to eight weeks will be the maximum length of economic shutdowns to stop the spread of the coronavirus, he told Fox News.
- “The president would like to reopen the economy as soon as he can and we are planning internally, we’re looking at a number — and, say, most of this is health and virus related metrics, but we also are looking at the economics of the story, how best to get us going,” he said.
- So far the U.S. has issued $50B of loans to small businesses as of Monday night, representing ~178K loans from 300 lenders, Kudlow said. (Note: The CARES Act provides for $349B of loans under the payroll protection program.)
- Still, the U.S. certainly will have at least a couple more weeks of bad economic numbers, Kudlow said.
- In a fresh update, Mondelez International (NASDAQ:MDLZ) says it expect higher sales in some markets and channels (U.S., Europe, large grocery/retail chains) during the stay-at-home lockdown period as consumers significantly increase their current food purchasing decisions.
- MDLZ also expects lower revenue in some of emerging market nations that have a higher concentration of traditional trade outlets (such as small family-run stores), as well as in the travel retail and foodservice businesses.
- The net effect of the pandemic could be negative when additional costs are factored in.
- Shares of MDLZ are up 1.55% in early action.
- SEC Form 8-K
- Total (NYSE:TOT) says it closed the sale of its interest in offshore Brunei to Royal Dutch Shell and that it would divest its marketing and services business in Liberia and Sierra Leone to Conex Oil & Gas Holdings, for a total value of more than $400M.
- Total says it received approval from authorities to complete the sale of its wholly owned Brunei subsidiary, which holds a 86.95% interest in Block CA1, to Shell, and signed a deal to sell its network of 63 service stations, general trade fuel sales and petroleum products import and storage operations in Liberia and Sierra Leone.
- Separately, Total says its two LNG-powered Very Large Crude Carriers, which can carry 300K tons of crude oil each, will be delivered in 2022 and join its time-chartered fleet.
- The airline sector is flying higher on hopes for a COVID-19 slowdown that will ease anxiety over travel demand.
- Today's big rally arrives even with airline pulling back capacity to as much as 90% in the near term and bleeding cash.
- Premarket trading: American Airlines Group (NASDAQ:AAL) +15.58%, Delta Air Lines (NYSE:DAL) +14.65%, United Airlines (NASDAQ:UAL) +18.15%, Southwest Airlines (NYSE:LUV) +11.73% and JetBlue (NASDAQ:JBLU) +14.62%.
Well, you know ALK is my favorite and we can still sell the 2022 $22.50 puts for $6.50 so let's sell 10 of those ($6,500) and pick up 20 of the 2022 $25 ($13.50)/$35 ($9.50) bull call spreads for $4 ($8,000) so that's net $1,500 on the $20,000 spread for the LTP.
