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I'm up before the market every day..Started it during the early days of Covid and now I sorta like the time before the GF gets up to read.Originally Posted by CoachCB
Man..We've been getting pounded on BABA it just can't clear the mid 170's ..
Ugly market today.
I only wake up early when I have to go into the office (usually around 6am wake up), otherwise I'm in bed until about 7, 715 when I work from home. I'm 50 and I still like to sleep in!
Yes, BABA won't clear 270-ish. I have a $300 sell order in.
WMT is taking a beating today. I sold half my shares last week, made a little bit...but I just added since it's down over 5%.
statistically, the market has hit its low range for the week- 68% probability it does not go lower than todays low , as of 10:30 am. IF it does (it has a 32% chance to) it can really move down. I dont think this happens- tommorw is options expiration guys, i just dont see an unravel as tommorw would be real ugly
Today's been brutal. I'm down almost across the board.
I've got a bunch of money sitting on the sidelines from my portfolio cleansing last week. Time to go shopping.
Good idea. I hate seeing red on the screen, but know it's a good time to buy. I hit an all-time high just yesterday in my personally managed accounts - and now I'm down about $5k today. So I've added a little here and there today. I'm about to fly out soon, so I'll be off around 3p today.
nice bounce.
to be clear, this is fir the end of the week
options expiration tommorow, the afternoon may have some fireworks
HEY COACH
If you want I would canel that $300 sell order and if you have a 100 shares, you could sell to open a March 19 $300 call and get paid $220 per option or Arpril 16th and get paid $550 per option.
Hope you bought yesterday. Buying on the dip is the secret to long term success
Wood is moving the market lol
PLTR -her firm took a position, going nutty. gap up and Straight buying off the opening
Bought 75 shares of QCOM yesterday just before close. This stock was just recently up around $165 and don't see why it can't get there again. Also bought 50 shares in the CCIV warrants. I'll see how this goes. Might be a short hold and take some quick profit (hopefully).
MF, I'm on the road right now. I'll look into this. I don't have 100 shares though. I have 15 in my brokerage and 25 in my Roth.
Another week.
Mentioned below....Generac Holdings (NYSE:GNRC) shouldn't everyone have a generator now a days? I own an older Generac it's been great product.
Welcome to Wall Street Brunch, our preview of stock market events for investors to watch during the upcoming week. You can also catch this article a day early by subscribing to the Stocks to Watch account for Saturday morning delivery.
Outlook
Economic reports in the week aheadShutterstockOn tap for next week, investors will continue to size up improving economic data and the steady decline in COVID-19 cases and vaccinations, while the Q4 earnings season continues with big reports due out from Home Depot (NYSE:HD), Lowe's (NYSE:LOW), Nvidia (NASDAQ:NVDA) and Wayfair (NYSE:W). Investor events being hosted by Spotify (NYSE:SPOT), Twitter (NYSE:TWTR), Snap (NYSE:SNAP), ViacomCBS (NASDAQ:VIAC), Hasbro (NASDAQ:HAS) and Mattel (NASDAQ:MAT) will also be of high interest. Meanwhile, Federal Reserve Chairman Jerome Powell will deliver his semi-annual testimony to the Senate Banking Committee and the House Financial Services Committee.
Earnings
Discovery Communications (NASDAQ:DISCA), Occidental Petroleum (NYSE:OXY) and Palo Alto Networks (NYSE:PANW) on February 22; Home Depot, Macy's (NYSE:M), Square (NYSE:SQ), Toll Brothers (NYSE:TOL), MercadoLibre (NASDAQ:MELI) and McAfee (NASDAQ:MCFE); Lowe's , Royal Bank of Canada (NYSE:RY), TJX Companies (NYSE:TJX), Tenneco (NYSE:TEN), (VIAC), L Brands (NYSE:LB) and Nvidia (NVDA) on February 24; Vipshop Holdings (NYSE:VIPS), Best Buy (NYSE:BBY), Anheuser-Busch InBev (NYSE:BUD), Wayfair and Keurig Dr Pepper (NASDAQ:KDP) on February 25 and Dell Technologies (NYSE:DELL), HP Inc. (NYSE:HPQ), Salesforce.com (NYSE:CRM), Rocket Companies (NYSE:RKT) and VMware (NYSE:VMW) on February 26.
Nvidia (NVDA) reports earnings with analysts expecting the company to report revenue of $4.8B and EPS of $2.80. Nvidia has topped revenue estimates 10 of the last 12 quarters and beat profit estimates in 11 of the last 12 quarters. Earnings day arrives with a big focus on the chip supply chain from investors amid the rapid growth in 5G and self-driving car tech. Technical traders are also positive on the setup for NVDA. TradingAnalysis.com founder Todd Gordon thinks if Nvidia shares clear $600, there may not be resistance until about $1,000. On the fundamental side, Oppenheimer sees upside to the consensus marks on Nvidia for FQ4 and FQ1. The firm says the long-term AI-driven structural growth/GM thesis is still intact.
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IPOs
No IPOs are scheduled to price. Quiet periods expire in the week ahead for Ortho Clinical Diagnostics (NASDAQ:OCDX), Shoals Technologies Group (NASDAQ:SHLS), Vinci Partners (NASDAQ:VINP), Qualtrics (NASDAQ:XM), ZIM Integrated Shipping (NYSE:ZIM), Home Point Capital (NASDAQ:HMPT) and Trinity Capital (OTCQX:TRIN). The IPO lockup period on JFrog (NASDAQ:FROG) expires on February 22, as well as on both Montrose Environmental Group (NYSE:MEG) and Xpeng Motors (NYSE:XPEV) on February 23.
Dividends
Projected dividend increases (quarterly): The list of notable dividend increases anticipated to be announced next week includes SBA Communications (NASDAQ:SBAC) to $0.56 from $0.465, Domino's Pizza (NYSE:DPZ) to $0.93 from $0.78, LeMaitre Vascular (NASDAQ:LMAT) to $0.105 from $0.095, Assured Guaranty (NYSE:AGO) to $0.22 from $0.20, Home Depot (HD) tp $1.65 from $1.50, Sempra Energy (NYSE:SRE) to $1.14 from $1.045, Thermo Fisher (NYSE:TMO) to $0.24 from $0.22, Silgan (NASDAQ:SLGN) to $0.13 from $0.12, Verisk Analytics (NASDAQ:VRSK) to $0.29 from $0.27, Amerisafe (NASDAQ:AMSF) to $0.29 from $0.27 and Southwest Gas (NYSE:SWX) to $0.61 from $0.57.
M&A
Trending
McDonald's (NYSE:MCD) looks for a Q1 sales boost with the introduction of its new crispy chicken sandwich in three varieties at competitive prices. Early reviews and buzz will be crucial for the new menu addition. Early estimates from Credit Suisse forecast that MCD will triple chicken sandwich sales on a daily basis in the early going. Popeyes (NYSE:QSR) sparked the chicken wars in 2019 with its incredibly popular chicken sandwich launch. In response, new chicken sandwiches have been released by Chick-fil-A, KFC, Burger King and Boston Market as well.
Events
The end of the New York Toy Fair leads to big investor events for Mattel and Hasbro. Mattel will provide a strategic update on February 24 as part of its virtual analyst day event. Look for execs to highlight the efforts and progress Mattel has made in its efforts to become an IP-driven toy company. Mattel could outline more details on the live-action films it is developing with major studios like Sony, Disney, Warner Brothers and Paramount, as well as animated programming on Netflix. Hasbro holds its annual Investor Event on February 25 with top execs and senior leaders from the company’s consumer products, entertainment and Wizards of the Coast businesses presenting. CEO Brian Goldner said upcoming projects will be announced at the event.
Spotify Technology is hosting a virtual event on February 22 called Stream On that will cover the latest on the state of global audio streaming and the company's commitment to empowering creators around the world. Later in the day, top Spotify execs will be hosting an investor discussion and Q&A related to the Stream On event. On February 23, Hyundai Motor Company (OTCPK:HYMLF) will official unveil its IONIQ 5 BEV model, which will feature the Electric-Global Modular Platform. Also on February 23, Snap is scheduled to host its first-ever virtual investor day to walk investors through its product, business and community opportunities for the future. Twitter (TWTR) is set to hold its virtual Analyst Day on February 25 with shares close to their all-time high.
ViacomCBS will open the virtual doors to its event to highlight the new Paramount Plus streaming service. The media giant is releasing Paramount Plus on March 4 to be the revamped update of CBS All Access. Paramount Plus will include live news and sports content, as well as on-demand programming from CBS, MTV, BET, Comedy Central and other ViacomCBS channels and brands. The service will also include access to the vast content slate from Paramount Pictures studio. While the streaming field is getting crowded, investors can bet on the broad streaming theme through the Roundhill Streaming Services & Technology ETF (NYSEARCA:SUBZ).
Conferences: Conferences in the week ahead include the KeyBanc Capital Markets Virtual Emerging Technology Summit, the Baird Sustainability Conference, the SVB Leerink Global Healthcare Conference, the Truist Consumer Symposium, the KBW Payments FinTech Conference, the Oddo Seydler Bank Small & Mid Cap Conference, the Credit Suisse Financial Services Forum and the Citigroup Healthcare Services, Medtech, Tools, & HCIT Virtual Conference.Go Deeper: Check out Seeking Alpha's Catalyst Watch for a detailed list of events to watch
Barron's mentions
Oracle (NYSE:ORCL) makes the cover this week and is profiled favorably. The company is said to be the new giant in cloud computing and a buy recommendation is fired off with valuation at 14X for the May 2021 fiscal year vs. the 23X PE handle for the S&P 500 index. Six companies are singled out as potential beneficiaries from efforts in the U.S. to prevent another Texas crisis. General Electric (NYSE:GE), Eaton (NYSE:ETN), Generac Holdings (NYSE:GNRC), Hess (NYSE:HES), PBF Energy (NYSE:PBF) and Northern Oil & Gas (NYSEMKT:NOG) make the 'restoring power' list. The publication thinks Warren Buffett's coming letter to shareholders offers an opportunity to explain how Berkshire Hathaway (NYSE:BRK.A) can adapt to new realities. Could a dividend from Berkshire stoke investor excitement?
Sources: EDGAR, Bloomberg, CNBC, The Verge, Renaissance Capital
Top News
ShutterstockWhile the S&P 500 is coming off its first losing week in three, the market is going into the final week of February with solid gains. The Dow and S&P 500 have already climbed more than 5% this month, the Nasdaq advanced 6.2% and the small-cap Russell 2000 outperformed with a gain of 9.3%. Some fears of rapidly rising bond yields are still settling in as U.S. stock index futures point to another weak open for today's session: Dow -0.7%; S&P 500 -1.1%; Nasdaq -1.5%.
Bigger picture: The 10-year Treasury yield jumped 14 basis points last week to 1.34%, close to its highest level since February 2020. It even touched 1.37% overnight, meaning the benchmark rate has moved up 28 basis points so far this month. That could hurt high-growth companies dependent on easy borrowing, while lessening the relative appeal of stocks. However, many on Wall Street still believe the jump in bond yields reflects a sign of growing confidence in the economic recovery and equities should be able to absorb higher rates due to strong earnings.
Quote: "We do not see the recent increase in yields as a threat to the bull market," said Keith Lerner, chief market strategist at Truist. "Given that we are in the early stages of an economic recovery, monetary and fiscal policy remains supportive, the sharp rebound in earnings, and favorable relative valuations, we maintain our overweight to equities."
Investors this week will also monitor the latest developments out of Washington, with House Democrats hoping to finalize a $1.9T stimulus package. A pickup in inflation could eventually prompt the Fed to raise short-term interest rates, though most traders don't see that happening in the near term. Also keep an eye on Jerome Powell, who is expected to reiterate a commitment to super-easy monetary policy in his semi-annual testimony before Congress this week. (30 comments)
Cryptocurrency
Tesla (TSLA) is "on a trajectory to make more from its Bitcoin (BTC-USD) investments than profits from selling its EVs cars in all of 2020." That's according to Wedbush's Dan Ives, which gave the estimate in a research note on Saturday. While he didn't lay out the numbers, Bitcoin has climbed about 65% since Jan. 31, which would put the profit on Tesla's $1.5B bitcoin investment at around $975M.
Quote: "We still expect less than 5% of public companies will head down this route until more regulatory goal posts are put in place around the crypto market," continued Ives. "While the Bitcoin investment is a side show for Tesla, it's clearly been a good initial investment and a trend we expect could have a ripple impact for other public companies over the next 12 to 18 months."
Response: Bitcoin's market cap even hit $1T on Friday as it continued to rally into record territory. The blastoff caught the attention of Tesla's Elon Musk once again, who said "BTC & ETH do seem high lol," though it came with a tweet that said "money is just data that allows us to avoid the inconvenience of barter." In the past, Musk has suggested that "Bitcoin is almost as bs as fiat money." The key word is "almost," he added, saying, "when fiat currency has negative real interest, only a fool wouldn't look elsewhere."
After surging to a record $58,354 on Sunday, Bitcoin fell as much as 6% to below $55,000 overnight following the comments from Musk. Rival cryptocurrency Ether (ETH-USD) is meanwhile off 7% to $1,798. Disclaimer: Musk's remarks in the past that Tesla's share price was "too high" were followed by similar pullbacks, before the stock skyrocketed to new records. Will it happen again? (11 comments)
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Aviation
A United Airlines (NASDAQ:UAL) Boeing (NYSE:BA) 777-200 bound for Honolulu suffered an engine failure shortly after takeoff from Denver on Saturday, scattering debris across several neighborhoods. Images shared on social media showed the extent of the failure, including an engine cover (called a cowling) in front of a residential house, though the plane was able to safely return and land in Denver. There were reports of property damage, but no one was injured, including the 241 passengers and crew members onboard the flight.
What happened? A preliminary examination by the National Transportation Safety Board showed that two fan blades in one of the United aircraft's engines were fractured - one nearly entirely and the other about half-broken - while the remaining fan blades displayed signs of damage. Such engine failures, in which internal parts shatter the engine’s protective casing, can badly damage planes because debris can hit wings, fuel tanks and the fuselage.
Following the incident, Boeing told airlines to stop flying its 777 aircraft equipped with Pratt & Whitney's (NYSE:RTX) PW4000 engine, while the FAA ordered immediate inspections of those jets. Regulators in Japan have also told local carriers to stop flying aircraft with the same engine type until further notice. United is the only U.S. operator of the planes, and the only other airlines using them are in Japan and South Korea.
Go deeper: It's the third failure involving the model in recent years. A Japan Airlines (OTCPK:JAPSY) flight on a 777-200 had an engine failure on a flight to Tokyo in December, while a different Boeing 777 operated by United had an engine failure on its way to Hawaii in February 2018. Following the events, authorities in Japan and the FAA issued directives requiring more regular inspections of planes and fan blades involving the PW4000 engine type. The affected 777-200s and 777-300s are also older and less fuel-efficient than newer models, and most operators are phasing them out of their fleets. (16 comments)
Economy
The Treasury Department under the Biden administration is making targeted changes to the Paycheck Protection Program. For two weeks starting on Wednesday, the Small Business Administration will only accept applications for forgivable PPP loans from firms with fewer than 20 employees in an attempt to direct more funding toward smaller, minority-owned firms. The program will also set aside $1B for businesses without employees in low- and moderate-income areas, but that are 70% owned by women and people of color.
Other terms: The SBA will provide new guidance making it clear that U.S. residents who are not citizens, such as green card holders, cannot be excluded from the program. It will also eliminate exclusions that prohibit a business owner who is delinquent on student loans from participating. Other planned changes include allowing broader access to the program for applicants with non-fraud felony convictions.
While the PPP resulted in a drop in the unemployment rate last summer, its limitations became clear when many recipients conducted mass layoffs as soon as their loans expired. Some controversy also ensued surrounding the program's broad eligibility criteria, which allowed publicly traded companies, fast-food chains and some small wealthy businesses to benefit from funding. The Biden administration has not said whether it will seek to extend the program after the current tranche of funding expires on March 31.
Statistics: The loan program approved a total of 5.3M loans worth about $521B over the course of 2020, of which 1.7M (or $151B) were forgiven. An additional 1.8M in PPP loans totaling $133.5B have been approved so far in 2021, according to data from the Small Business Administration. Most of them were "second-draw" loans granted to businesses that already received loans last year.
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Covid
The latest figures from Israel's Ministry of Health shows that the coronavirus vaccine from Pfizer (PFE) and BioNTech (BNTX) is 98.9% effective at preventing death caused by COVID-19. It is also 99.2% protective against serious illness, reduces morbidity by 95.8% and decreases the chance of hospitalization by 98.9%. "The vaccine dramatically reduces serious illness and death and you can see this influence in our morbidity statistics," said Health Ministry Director-General Chezy Levy.
Backdrop: In early January, Israel struck a vaccines-for-data deal with Pfizer that promised to share vast troves of information with the drug giant in exchange for the continued flow of COVID-19 shots. "Israel will be a global model state," Prime Minister Benjamin Netanyahu said at the time. "Israel will share with Pfizer and with the entire world the statistical data that will help develop strategies for defeating the coronavirus." No funding was allotted for the agreement, while the country even paid a sizable premium for vaccine doses. Helping to demonstrate the impact of the vaccine on an entire population is Israel's highly digitized universal healthcare system, which requires everyone over the age of 18 to register with one of four HMOs.
So far, 4,250,643 Israelis (47%) have received at least one dose of Pfizer's vaccine, while 2,881,825 (32%) have received both shots out of a population of about 9M. The latest data from Israel's Ministry of Health represents citizens who have received both doses of the vaccine, 14 days after their second dose, versus people who have not received any inoculation. Around 3M Israelis (33%) are not currently eligible to be vaccinated, including those younger than 16 and people who have recovered from COVID-19.
Outlook: On Thursday, Israel also launched a COVID passport program that will enable those vaccinated or recovered from the coronavirus to take part in various cultural and public activities. The "green pass" will grant access to gyms, hotels, swimming pools and concerts, while restaurants and bars will be included from early March. Could a COVID vaccine passport be issued in the U.S.? "Anything is on the table," Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, told Newsweek in January. Over the weekend, he also cautioned against complacency as coronavirus infections come down across the U.S., which just recorded a grim milestone of 500K COVID-related deaths. (414 comments)
What else is happening...
Starboard SPAC (NASDAQ:SVAC) close to deal for data center company Cyxtera.
Texas AG launches investigation into state's power failures.
Goldman predicts Brent crude at $75 by Q3 as supply lags demand rebound.
A new model shows U.S. could reach COVID-19 herd immunity by July.
Amazon (NASDAQ:AMZN) likely to partner with Dish (NASDAQ:DISH) on mobile service.
Sector Watch: Bank stocks shouldn't fear Fed's Powell.
In Asia, Japan +0.5%. Hong Kong -1.1%. China -1.5%. India -2.3%.Today's Economic Calendar
In Europe, at midday, London -0.6%. Paris -0.4%. Frankfurt -0.5%.
Futures at 6:20, Dow -0.7%. S&P -1.1%. Nasdaq -1.5%. Crude +0.7% to $59.69. Gold +1%at $1795.50. Bitcoin -4.2% to $54874.
Ten-year Treasury Yield -3 bps to 1.37%
Global Market Comments
February 22, 2021
Fiat Lux
Featured Trade:
(MARKET OUTLOOK FOR THE WEEK AHEAD, or TIME FOR A BREAK)
(GME), (TLT), (FB), (AMZN), (AAPL), (XME), (FCX), (MS), (GS), (BLX), (KO), (AMD)
The Market Outlook for the Week Ahead, or Time for a BreakI know you’re not going to want to hear this. I might as well be trying to pull your teeth, lead you down a garden path, or sell you a high-priced annuity.
But there is nothing to do in the market right now. Nada, diddly squat, bupkis, and for all you Limey’s out there, bugger all.
For during the first six weeks of 2021, we have pretty much squeezed all there is out of the market.
Not only did we nail the timing and the direction, we also got the lead sectors, financials, brokers, chips, and short bonds (MS), (GS), (BLK), (AMD). We also chased the Volatility Index (VIX) down from $38 to a lowly $20, baying and protesting all the way.
That enabled us to extract a 28.29% profit so far in 2021, the best return in the 13-year history of the Mad Hedge Fund Trader. The only other time you see numbers this high is when Ponzi schemes get busted. And not a dollar of this was earned from the really marginal plays like Bitcoin, SPAC’s, GameStop (GME), or pot stocks.
If I feel like I did a year’s worth of work during the first seven weeks of 2021, it’s because I have, issuing 60 trade alerts since January 1.
However, bonds (TLT) are reaching the end of their current leg down. The 1.34% yield we saw on Friday is suspiciously close to the 1.36% yields we saw during the 2012 and 2017 market double bottom.
So, there may be some wood to chop around these, levels, possibly for weeks or months.
This is important because a collapsing bond market has been the principal driver of the winning trades of 2021, such as in banks, brokers, money managers, and other domestic recovery plays.
And when one side of the barbell goes dead, what do you do? You buy the other side. FANGs are just completing a six-month “time” correction where they have gone absolutely nowhere. So, Facebook (FB), Amazon (AMZN), and Apple (AAPL) may be getting ready for a roll.
One other sector that might keep running is the SPDR Mining & Metals ETF (XME), and Freeport McMoRan (FCX). That’s because it's not just us buying metals to front-run a recovery, it’s the entire world. What do you think a $2 trillion infrastructure budget will do to this area?
New lows for bonds, as the ten-year US Treasury yield hits 1.26%, up 38 basis points since January 1 and a one-year high. 1.50% here we come! Ever hear the expression “Don’t fight the Fed”? All financials are off to the races, where we were 60% long. Biden’s $1.9 trillion rescue package will be 100% borrowed and take total US borrowing to a back-breaking 55% of GDP. I hate to sound like a broken record but keep selling rallies in the (TLT), buy (JPM), (BAC), (GS), (MS), and (BRK/B) on dips.
Volatility index hit a one-year Low, which is what you’d expect at the dawn of a decade-long bull market in stocks. The (VIX) may flat line here for a while before the next out-of-the-blue spike.
The Nikkei Stock Average topped 30,000, for the first time in 31 years, Yes, it’s been a long haul. I was heavily short in the initial 1990 meltdown from 39,000 to 20,000 and many fortunes were made. The top marked the end of the Japanese company’s ability to copy their way into leadership. After that, rapidly advancing technology made copying too slow to compete in a global economy.
A midwest storm upended energy markets, with oil popping $8 to $67 and gas deliveries spiking from $4 to $999. It would have gone higher, but the software only provided for three digits. Electricity prices are all over the map. Some 4 million Texas customers are without power. Fracking has ground to a halt. Windfarms are frozen solid. If you are a net producer (as I am), you are in heaven. The turmoil is expected to be gone by the weekend. It’s another high price paid for ignoring global warming.
Weekly Jobless Claims soared, to 861,000, casting a dark cloud over the economic recovery. The news took a 300-point bite out of the Dow. Illinois and California saw the biggest gains. We are not out of the woods yet.
SpaceX was valued at $74 Billion, according to an $850 billion venture capital fundraising round this week. However, Elon Musk’s rocket company won’t go public until men are landed on Mars. The company is also the launching pad for its Starlink global WIFI project, which will cost at least $10 billion to build out. Blowing up rockets is not a good backdrop for an IPO.
Cash is still pouring off the sidelines, with equity mutual funds attracting some $7.8 billion last week. As long as this is the case, which could be for years, any market corrections will be limited. Strangely, bond funds are still pulling in money too, some $5.7 billion. It’s called a liquidity-driven market, silly!
When we come out the other side of pandemic, we will be perfectly poised to launch into my new American Golden Age, or the next Roaring Twenties. With interest rates still at zero, oil cheap, there will be no reason not to. The Dow Average will rise by 400% to 120,000 or more in the coming decade. The American coming out the other side of the pandemic will be far more efficient and profitable than the old. Dow 120,000 here we come!
My Mad Hedge Global Trading Dispatch earned an amazing 17.27% so far in February after a blockbuster 10.21% in January. The Dow Average is up a trifling 2.92% so far in 2021.
This is my fourth double-digit month in a row. My 2021 year-to-date performance soared to 27.28%. After the February 19 option expiration, I am now 80% in cash, with a single long in Tesla (TSLA) left.
That brings my 11-year total return to 450.03%, some 2.05 times the S&P 500 (SPX) over the same period. My 11-year average annualized return now stands at an Everest-like new high of 40.30%.
My trailing one-year return exploded to 94.09%, the highest in the 13-year history of the Mad Hedge Fund Trader. We have earned 109.00% since the March 20, 2020 low.
We need to keep an eye on the number of US Coronavirus cases at 28 million and deaths approaching 500,000, which you can find here. We are now running at a heart breaking 3,000 deaths a day. But that is down 35% from the recent high.
The coming week will be a boring one on the data front.
On Monday, February 22, at 8:30 AM EST, the Chicago Fed National Activity Index is out. Zoon (ZM) reports.
On Tuesday, February 23 at 9:00 AM, the S&P Case-Shiller National Home Price Index for December is announced. Square (SQ) and Intuit (INTU) report.
On Wednesday, February 24 at 8:30 AM, New Home Sales for January are printed. NVIDIA (NVDA) reports.
On Thursday, February 25 at 9:30 AM, Weekly Jobless Claims are printed. US Durable Goods for January and Q4 GDP are out. Salesforce (CRM), (Moderna (MRNA), and Airbnb (ABNB) report.
On Friday, February 26 at 8:30 AM, US Personal Income and Spendingare published. DraftKings (DKNG) reports. At 2:00 PM, we learn the Baker-Hughes Rig Count.
As for me, if you want to see what it is like to work at Amazon, watch the movie Nomadland. It’s an artsy Francis McDormand film made with a $4 million budget about the end of life, which I caught over the weekend on Hulu.
It covers a contemporary trend in US society where retirees with no savings move into RVs and live off the grid, working occasionally to earn gas money. They raved about it in Europe.
If I don’t keep those trade alerts coming, that could be me in a couple of years.
Stay healthy.
John Thomas
CEO & Publisher
The Diary of a Mad Hedge Fund Trader
Quote of the Day"The less the prudence with which others conduct their affairs, the greater the prudence with which we must conduct our own," said Oracle of Omaha Warren Buffet.
Watching the 10-year has been interesting. Also, he says to add some banking stocks in reaction to the 10 year - I've been buying slices of BRK/B (which is on his list).
Top News
ShutterstockGet ready for Fed Chair Jerome Powell's semiannual monetary policy testimony before Congress, which will take on additional importance this time around as investors size up the recent run-up in bond yields. Powell will answer questions from the Senate Banking Committee today and appear before the House Financial Services Committee tomorrow. He's expected to reaffirm his commitment to an ultra-easy monetary policy, as well as the need for more fiscal stimulus, to support the economy as it emerges from the COVID-19 pandemic.
Backdrop: The Fed has run historically loose policy over the past year, lowering its benchmark borrowing rate to near zero and buying at least $120B of bonds each month (about 7% of GDP on an annualized basis). That's on top of a series of lending and liquidity programs implemented to battle the coronavirus crisis, while Congress has approved trillions of dollars in fiscal stimulus and could pass another $1.9T bill by the end of week. All the stimulus measures have helped boost expectations of faster U.S. growth and inflation, recently driving up government bond yields, particularly further out on the curve.
While the 2-year is unchanged for 2021, the 5-year has risen a quarter percentage point to 0.61%. The benchmark 10-year note has seen its yield jump 44 basis points to 1.37%, an area where it hasn't been since before the pandemic, while the 30-year rate has climbed 54 bps to 2.19%. ECB President Christine Lagarde even flagged the movement on Monday, saying she is "closely monitoring the evolution of longer-term nominal bond yields."
Balancing act: A series of disappointing weekly jobless claims and recent monthly jobs reports have pointed to a U.S. labor market that's still under considerable strain due to the pandemic. That may lead Powell to emphasize robust stimulus measures, which would be typically embraced by investors, but some are now painting the Fed's situation as caught between a rock and a hard place. If bond yields continue to rise in response, the Fed might be forced to tighten policy too quickly, while a complacent Fed could pose overheating risks that may destabilize the economy over the longer term.
Stocks
The tech sector looks poised for another down day, fueled by fears about inflation and rising long-term interest rates. That could lower the present value of future earnings and undercut arguments for elevated valuations of high-growth tech stocks. The Nasdaq slumped 2.5% on Monday, while future contracts linked to the index fell another 1.5% overnight. In fact, the Nasdaq 100 has dropped 4.2% over the last five days, the longest consecutive streak of losses since Oct. 19.
Bigger picture: The rout weighed on some of best plays of 2020 as Peloton (PTON) plunged 10% on Monday, while DocuSign (DOCU) and Tesla (TSLA) tumbled 8.2% and 8.6%, respectively. The stay-at-home trade that boosted much of the tech sector may also be on the back foot given hopes of a return-to-normal due to a broader vaccine rollout. That's seeing more money flow into cyclicals, reflecting pent-up expectations for a reopening of the economy.
"Just because long-term rates are ultra-low on an historical basis, we do not believe that they will have to rise as far as most pundits think they do before they impact the stock market," Matt Maley, chief market strategist at Miller Tabak, wrote in a note. Others think the retreat is a bit overblown. "Definitely, yields are the big thing," said Randy Frederick, vice president of trading and derivatives at Schwab Center for financial research, but "when you are a tad off record highs, inflation scares or a storm could cause a pullback."
Other movement: Elsewhere, Bitcoin (BTC-USD) retreated below $50,000 after Treasury Secretary Janet Yellen called the crypto an "extremely inefficient way of conducting transactions." She also warned about its use in illicit activity and sounded the alarm about its impact on the environment (given the levels of electricity needed to produce new coins). That would be in contrast to a sovereign digital currency, for which Yellen signaled the Biden administration's support, as well as research into the viability of a digital dollar.
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Media
Facebook (FB) has reached an agreement with the Australian government that will restore news pages in the country after the latter proposed amendments to a controversial media bill. The original law, if passed, would leave digital platforms on the hook for news content displayed in search results or feeds, meaning they would have to shell out cash to local media outlets and publishers for linking to their content. Google (GOOG, GOOGL) already agreed to pay for news, but Facebook appears to have held out for a better arrangement.
Under the amendments to the proposed bill, the Australian government will take into account commercial agreements that digital platforms have already made with local news media businesses before deciding if the code applies to the tech giants. The government will also give digital platforms one month's notice before reaching the final decision and would also include a two-month mediation period that grants the two sides more time to negotiate commercial deals before forcing them into final-offer arbitration.
Quote: "As a result of these changes, we can now work to further our investment in public interest journalism and restore news on Facebook for Australians in the coming days," Facebook regional managing director William Easton declared.
Go deeper: Microsoft (MSFT), which has previously pitched Bing after Google threatened its search engine Down Under, is joining EU publishers pushing for paid content laws. It's proposing regulations that "mandate payment" for news content by "gatekeepers that have dominant market power," which is a shot at Google and Facebook. The coalition would also support a form of arbitration and is looking at Australia's pending news payment legislation for guidance.
M&A
In the latest SPAC deal on the Street, electric vehicle maker Lucid Motors plans to go public at an $11.75B combined equity valuation and $24B pro-forma equity value through a reverse merger with Churchill Capital Corp IV (NYSE:CCIV). The latter is a blank-check company started by veteran investment banker Michael Klein.
Investors had eagerly awaited a possible Lucid/CCIV deal given that Lucid competes with Wall Street darling Tesla (NASDAQ:TSLA), whose stock has risen some 600% over the past 11 months. Former Tesla executive Bernard Tse co-founded Lucid in 2007. CCIV shares are off 35% premarket to $37 following news of the deal, after climbing as much as 279% intraday in recent weeks to $64.86 (from a $17.11 low on Jan. 21). Tesla is down another 6% to $670/share after touching $900 back in January.
What they're saying: Seeking Alpha contributors are giving Lucid mixed reviews. Columnist Long Term Tips recently called it "the best available investment in an EV manufacturer," while contributor Jaberwock Research described the automaker as "an interesting company, but not at the price that investors are paying right now."
Outlook: Lucid is set to deliver its first vehicle, a luxury sedan called the Air, this spring. The company sees the Air as a catalyst for a lineup of future all-electric vehicles, including an SUV starting production in early 2023 and more affordable vehicles down the line. The deal with Churchill Capital will also generate about $4.4B in cash for expansion plans for Lucid, including its current factory in Arizona.
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Trending
The principal chief of the Cherokee Nation wants Jeep to stop using the tribe’s name on its SUVs, and even held a video call with representatives from Stellantis (NYSE:STLA), the parent company of the Jeep brand since a merger of Fiat Chrysler and Peugeot. He was left with the impression that the representatives were of good faith and wanted to understand the concerns, but no commitments were made regarding the Jeep Cherokee name.
"Financial incentives, things of that nature, to me, don't remedy the underlying problem," Chuck Hoskin Jr. declared. "I think we're in a day and age in this country where it's time for both corporations and team sports to retire the use of Native American names, images and mascots from their products, team jerseys and sports in general. "I'm sure this comes from a place that is well-intended, but it does not honor us by having our name plastered on the side of a car."
Response from Jeep: "Our vehicle names have been carefully chosen and nurtured over the years to honor and celebrate Native American people for their nobility, prowess, and pride. We are, more than ever, committed to a respectful and open dialogue with Cherokee Nation Principal Chief Chuck Hoskin, Jr."
Some history: Jeep first used the Cherokee name in a 1974 two-door wagon, with one trim called Cherokee Chief. It has since built vehicles called Cherokee continuously, although from 2002 through 2013 the cars were known as the Liberty in North America. The Grand Cherokee is Jeep's best-selling vehicle, and the Cherokee is its third-biggest selling model (the two made up more than 40% of Jeep's total annual sales in 2020).
The criticism isn't limited to the auto industry. In fact, several companies and sports teams have stopped using brand names and logos that used ethnic stereotypes and caricatures over the past year. Those include Aunt Jemima, Uncle Ben's, Land O'Lakes and Eskimo Pie, as well as reviews of Mrs. Butterworth's and Cream of Wheat. Sports teams like the MLB's Cleveland Indians and the NFL's Washington Redskins also dropped Native American imagery and names from their franchises.
What else is happening...
Spotify (NYSE:SPOT) plans to launch in over 80 more countries.
FDA feedback encourages Moderna (NASDAQ:MRNA) to increase vaccine supply per vial.
Recreational marijuana laws signed in New Jersey.
Google (GOOG, GOOGL) ending month-long ban on political ads.
State Department report allows Nord Stream 2 to proceed for now.
In Asia, Japan closed. Hong Kong +1%. China -0.2%. India flat.Today's Economic Calendar
In Europe, at midday, London -0.4. Paris -0.2%. Frankfurt -1.2%.
Futures at 6:20, Dow flat. S&P -0.5%. Nasdaq -1.5%. Crude +0.8% to $62.19. Gold -0.1% at $1806.70. Bitcoin -14.3% to $46637.
Ten-year Treasury Yield flat at 1.37%
8:55 Redbook Chain Store Sales
9:00 S&P Corelogic Case-Shiller Home Price Index
9:00 FHFA House Price Index
10:00 Consumer Confidence
10:00 Richmond Fed Mfg.
10:00 PM Powell Testifies on Semi-Annual Monetary Policy Report
1:00 PM Results of $60B, 2-Year Note Auction
1:00 PM Money Supply
Companies reporting earnings today »
I'll take a little VXX at the opening.
Got stuff to do, i won't let the VXX run alone..sold 4% gain.
It's ugly today.
Like the Red Wedding in Game of Thrones
Throats getting sliced all over the place.
The late Lord Fray.
I'm not even looking at my portfolio today after I saw the open. The one thing I learned is don't panic sell. I like the names I'm in and they will bounce back.
In fact I still have some money sitting on the sidelines that may go shopping later.
Global Market Comments
February 23, 2021
Fiat Lux
Featured Trade:
(THE UNITED STATES OF DEBT),
(TLT), (TBT), ($TNX)
The United States of Debt
With ten-year US Treasury yields topping 1.34% on Friday, a borrowing rampage of epic proportions is about to ensue. This is not a new thing.We are, in fact, becoming the United States of Debt.
That Washington taking the lead in this frenzy of borrowing is undeniable. The last administration took the national debt from $23 trillion to $28 trillion during four years of prosperity that was entirely borrowed from the future.
The Biden administration is about to take that figure up to an eye-popping $38 trillion to end the pandemic, put 20 million back to work, and bring the current Great Depression to a close.
The National Debt exceeded US GDP in 2016, taking the debt to GDP ratio to the highest point since WWII.
Treasury Secretary Janet Yellen recently confided to me that, “It’s the kind of thing that should keep you awake at night.”
It gets worse.
According to the Federal Reserve Bank of New York, total personal debt topped $17 trillion by the end of 2019. An overwhelming share of personal consumption is now funded by credit card borrowing.
Some 33% of Americans now have debts in some form a collection, and that figure reaches an astonishing 50% in many southern states (see map below). Call it the Confederate States of Debt.
Corporations have also been visiting the money trough with increasing frequency, taking their debt to $6.1 trillion, up by 39% in five years, and by 85% in a decade.
The debt to capital ratio of the top 1,000 companies has ballooned from 35% to 54% and is now the highest in 20 years.
Another foreboding indicator is that corporate debt is rising faster than sales, with debt rising by a breakneck 8.5% annualized compared to 4.6% for sales over the past decade.
Automobile debt now tops $1 trillion and with lax standards has become the new subprime market.
And remember that other 800-pound gorilla in the room? Student debt now exceeds $1.6 trillion and is rising, as is the default rate. Provisions in the last tax bill eliminate the deductibility of the interest on student debt, making lives increasingly miserable for young borrowers. And you wonder why the US birth rate is so low.
Of course, you can blame the low interest rates that have prevailed for the past decade. Who doesn’t want to borrow when the inflation-adjusted long-term cost of money is FREE?
That explains why Apple (AAPL), with $270 billion in cash reserves held overseas, has been borrowing via ultra-low coupon 30-year bond issues, even though it doesn’t need the money. Many other major corporations have done the same.
And while everything looks fine on paper now, what happens if interest rates ever rise?
The Feds will be in dire straight very quickly. Raise short term rates to the 6% seen at the peak of the last cycle, and the nation’s debt service rockets from 4% to over 10% of the total budget. That’s when the sushi really hits the fan.
You can expect the same kind of vicious math to strike across the entire spectrum of heavily leveraged borrowers going forward, including you and me.
We are also witnessing the withdrawal of the Chinese as major Treasury bond buyers, who along with other sovereign buyers historically took as much as 50% of every issue. Declare a trade war on your largest lender and it plays hell with your cash flow.
Don’t expect them back until the dollar starts to appreciate again, unlikely in the face of ballooning federal deficits.
Rising supply against fewer buyers sounds like a recipe for eventually much higher interest rates to me.
So, like I said, things are about to get a whole lot better for the bond shorting crowd. Just watch this space for the next Trade Alert regarding when to get back in for the umpteenth time.
Quote of the Day"A strong dollar is a natural consequence of America emerging from a liquidity trap, while Europe and Japan are still stuck in one. The dollar is a growth stock, and growth stocks over time outperform utilities," said Paul McCulley, formerly the chief economist at bond giant PIMCO.
dont have many holdings in my trading account anymore , lol. Been taking profits .Still own some kweb (dumped some more today, fuckin chart is near vertical , crazy ) and qqq's . Out of MJ, ICLN, ARKK, ARKF, very grateful for the gains. . Could get stopped this week on both qqq, kweb will see.
Price is price , adn the charts on the major indices have not turned , not even close . I plan to get back into any of those 4 etfs if opportunity presents...breakout for XLE (fossil fuel energy) whoa!!!
ES
https://www.investing.com/indices/us...treaming-chart
cick 1D then the furthest button on that line 'widescreen'
the ES (spy) was playing in a box ; top of the box 3855ish, bottom of the box 3675 ish. It broke the top of the box and ran to 3957, a +2.6% run . If it pulls back , it needs to HOLD this level ; 3855ish zone is now support. If it was to lose it? the bottom of the box is at play, 3675, that's a 7% fall from the alltime high 3957 (not saying it will go there, but it can , lots of support there).
approx 70% of stock price action just follows the index, if the index pulls back, most stocks will as well. Keep an eye on these levels, esp 3855ish. Stocks /etfs with higher beta numbers will move dramatically faster to the downside than the SPY
again from the charts, NOTHING has been breached , no danger . AND not seeing any massive dark pool prints on the major indices, no big players gettin' atta dodge!
GL Boz, guys
...
levels are levels.
And of course , when the market retraces etfs/stocks with high beta can violently turn the other way. ARKK a great example of that today, it also showed how powerful its retail investor following is-- as it tanked real early 10% !!!! before buyers came in. Folks panic selling
the NS is at a support (as is aapl )-- it must must hold. it is so far AND its showing a bullish negative divergence . the qqq's had a beautiful bullish pin bar at about 10:30 am, that fell apart...lets see the close .
have my eye on a whole bunch of shit!! ha!!!!!!
Rough day today, but I had a little comeback towards the end. I had a buy order in for TSLA at $660 and it triggered today when I was busy at work. I came back, looked at my portfolio and there was 3 shares of TSLA. I said, "WFT?" I'm up $112 at the end of trading!
Top News
ShutterstockBack in January, we saw the GameStop (GME) phenomenon disrupt traditional trading patterns, though the saga ended quite quickly despite warnings of shifting power dynamics on Wall Street. Over the last week, we've seen new fears spread over market - inflation and rising bond yields. Could those also prove fleeting as "buy the dip" trends on Twitter?
Quote: "The way in which interest rates have risen is not the type of rise that we would naturally associate with weakness in the equity market," said Morgan Stanley's Matthew Hornbach. "We're not seeing interest rates spike higher, we're not seeing a taper tantrum like we did in 2013, when interest rates rose 150 bps in the span of three months."
Many have also been touting the "equity rotation" as an uptick in bond yields caused stress in high-flying growth plays. Technology has been having a rough few weeks, along with momentum trades, which is one of the most crowded in the bull market. Drivers of the rotation into cyclical picks have been economic reopenings and broader COVID vaccine rollouts, though with many growth stocks on the backfoot, it may pay to put some cash into the sector.
Quote: "I'm happy to entertain the idea that you need to ring the register here, but I happen to like growth stocks in a reflation scare. I like growth stocks when risk is on. I like growth stocks when risk is off," Jim Cramer said on Mad Money. "For the better growth stocks, down more than 10% from their highs, call me a buyer. Not all at once, not big, but a buyer nonetheless." (30 comments)
Central Banking
Reassuring comments from Jerome Powell helped stocks recover on Tuesday following steep losses earlier in the day. The Nasdaq ended the session down 0.5%, after falling as much as 4%, while the Dow staged a massive 360-point comeback and closed nearly 16 points higher. The Fed Chair told the Senate Banking Committee that the central bank would keep its foot on the gas pedal as the pandemic recovery path remains "highly uncertain," though he forecast a return to more normal and improved economic activity later in the year.
Bigger picture: Powell's visit to Capitol Hill continues today as he addresses the House of Representatives Financial Services Committee. Stock index futures pulled off their overnight lows ahead of the testimony and are pointing to a green session at the open: Dow +0.1%; S&P 500 +0.2%; Nasdaq +0.2%. It's important to note that Powell also played down inflation worries from another big fiscal stimulus package and called the recent run-up in bond yields "a statement of confidence" in a strong economic outlook. Not only did he help backstop the market, some other influential names lent a hand to notable names that came under pressure.
As electric vehicle stocks tumbled, Cathie Wood bought more shares of Tesla (TSLA) (for a second day running), adding 11,893 shares to the ARK Autonomous Technology & Robotics ETF (ARKQ), 177,214 shares for the ARK Innovation Fund (ARKK) and 51,441 shares for the ARK Next Generation Internet ETF (ARKW). During an interview on Bloomberg Radio, Wood said she loves the liquidity that the shakeout in the market brings in general and sees a $7T opportunity in the autonomous car industry.
Go deeper: The crypto washout also deepened, with Bitcoin (BTC-USD) sinking to $45,000, but it rapidly made its way back to the $50,000 level. MicroStrategy (MSTR) CEO Michael Saylor was not bothered by the shaky price action, noting that the crypto became a $1T digital monetary network in just a dozen years, way faster than other $1T club members like Apple (AAPL), Amazon (AMZN), Microsoft (MSFT), and Google (GOOG, GOOGL). Meanwhile, Jack Dorsey's Square tripled its last investment in Bitcoin via a $170M purchase of 3,318 tokens, while Cathie Wood said she was "very positive" on the crypto and welcomed its "healthy correction." (16 comments)
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Financials
The southwestern Chinese city of Chengdu is handing out another $6M in the latest test of the central bank's digital currency. The scale of the trial is much larger than one conducted in Beijing earlier this month, which aimed to distribute $1.5M to 50,000 applicants. Other cities, like Shenzhen and Suzhou, have held their own tests of the People's Bank of China's digital currency in the last few months.
What's happening? China is racing to become the first big economy to introduce a centralized digital currency. One of the most notable features of the currency is the ability to conduct transactions without internet, unlike China's hugely popular Alipay (NYSE:BABA) and WeChat Pay (OTCPK:TCEHY). It also won't require a bank account to access funds, helping the 20% of adults in China without bank accounts. China already leads the world in digital payments, accounting for 44% of the globe's total value of such transactions.
Thought bubble: The digital renminbi is an attractive tool for a government that is highly concerned with social control. China doesn't want decentralized cryptos, and even some from private companies - like Facebook's (NASDAQ:FB) Diem (formerly known as Libra) - to become a medium of exchange inside the country. It also offers a series of surveillance functions, where China's central bank can monitor every transaction that is using the currency in real time.
In fact, automatic vending machines in some metro stations in Beijing can now accept digital yuan as part of the offline application scenarios being promoted across the city. China is even hoping to showcase the tender at the 2022 Winter Olympics in Shanghai. The event is expected draw a large number of domestic and foreign spectators, driving up demand for payment services in the Chinese capital. (19 comments)
Trending
The Biden administration is preparing sanctions to punish Moscow for the sprawling SolarWinds (NYSE:SWI) cyber espionage campaign, which compromised nine U.S. government agencies and 18,000 public and private sector customers. That's according to The Washington Post, which said other measures would target Moscow due to a "range of malign cyber activity and the near-fatal poisoning of Russian opposition leader Alexey Navalny." The moves would be the first costs levied on Russia by President Biden (the State Department drew up options for retaliation last year under the Trump administration, but they were never imposed).
While the cyber attack was discovered in December, hackers had been inserting malicious code into SolarWinds updates since the previous March. U.S. officials have said that the breach was "likely" of Russian origin, but that hasn't been yet confirmed by intelligence officials. Yesterday, some of the companies affected by the hack told members of the Senate Select Committee on Intelligence that the attack may have also been broader than previously thought.
What happened? Once inside, "the threat actor took advantage of systemic weaknesses in the Windows authentication architecture, allowing it to move laterally within the network" and reach the cloud environment, CrowdStrike (OTC:CRWD) CEO George Kurtz said during the hearing. Microsoft (MSFT) President Brad Smith added that approach "was only used by the Russian attackers 15% of the time," and the hackers may have used "up to a dozen" different methods to gain access to victims' systems, not just SolarWinds software.
Movement: Cybersecurity stocks trended lower during the panel hearings on Tuesday, including SolarWinds, CrowdStrike, McAfee (MCFE), Zscaler (ZS) and SailPoint (SAIL).
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