TradeTheNews.com Barrons Saturday summary: Positive on cloud industry chip players, PFE, OAK, CAR, WY, SRCL, DSY.FR; Cautious on KMI
Cover story: Positive on the cloud industry and its impact on the semiconductor industry. Cautious on INTC and QCOM as their chips represent a fading part of the demand. AMBA, BRCM, CY, MBLY, MU, NVDA and SNPS are the future of the demand.
Trader: Opportunities will be abound in the near future with all but guaranteed confusing messaging from the Fed ahead of the December meeting. Markets appear to have recovered their losses but the gains are largely attributed to a few players such as AMZN, FB, GOOGL, and MSFT. Positive on SRCL given its valuation and history of performance.
Features:
1) Emerging markets panel of William Blair Emerging Markets, Van Eck, Harding Loevner, and Acadian positive on WALMEXV.MX, HDB, 700.HK, 1685.HK, VLID3.BR, ADSEZ.IN, CIEL3.BR, 1299.HK, DABUR.IN, GAPB.MX, PKY1.DE, 034220.KR
2) Cautious on KMI given its valuation in a tough marketplace for its business model
3) Positive on PFE given the potential for its new medicines and its growth may exceed its competitors
4) Positive on CAR as the best pure play in the rental space following consolidation in the industry.
5) Positive on WY; seen as a great play for a continued housing recovery and its helped by recent strong management decisions
Profile: Putnam multi cap core fund holdings include AIG AAPL C CVS GILD GOOGL JPM MSFT PFE XOM and highlights the potential behind following insider buying disclosures and IPOs.
Follow-Up: Positive on OAK despite its runup in a flat market. Company may have futher upside to the tune of 20%
Asian Trader: China Govt is still supporting the market and has lost an opportunity to bring in foreign funds by failing to admit it had a role in the Shanghai market turmoil
Emerging Markets: Sees KSU as a way to play emerging markets and the port expansion on the West Coast.
European Trader: Positive on DSY.FR given its strong history of investment in light of volatility in Europe
Commodities: Conditions for the wheat and corn crop in the near future are likely to be negatively impacted by the sunspots that have been observed by NASA. Prices for the crops are likely to rise as a result.
Streetwise: Positive on small cap stocks as they have underperformed in recent months and should therefore recover in the near term.
Saturday, October 31, 2015
Friday, October 30, 2015
TradeTheNews.com Weekly Market Update: Phantom Rate Hikes Haunt US Markets
Fri, 30 Oct 2015 16:08 PM EST
US stocks saw their fifth consecutive week of gains, with the S&P500 almost filling the gap from the August meltdown and coming to within 50 points of the all-time highs seen back in May. The Fed stood pat on rates, as expected, although UST yields rose to one-month highs later in the week as markets absorbed the message that rate liftoff could come in December. China waffled on setting a specific 2016 GDP target at the 13th plenum, deciding instead to adopt more flexible economic policy goals. In Washington, outgoing House Speaker Boehner concluded a two-year budget and debt ceiling deal before handing the baton to Paul Ryan, who opened his speakership by striking a more conciliatory tone, boding well for policy success in the future. For the week, the DJIA added 0.1%, the S&P500 rose 0.2% and the Nasdaq grew 0.4%, closing out their best month in four years with the major indices each up more than 8% in October.
The FOMC meeting on Wednesday served as a reminder that the US monetary policy will be shifting soon. The statement dropped a reference to global risks restraining growth that was used to justify no rate action in September. It also referred specifically to the next meeting in mid-December as a time for the Fed to weigh a decision on rate liftoff. Fed's Lacker dissented for a second time, remaining in favor of an immediate 0.25% rate increase. While the job market looks healthy (the four-week moving average in continuing claims sank to its lowest level since 1973), inflation continues to be the main source of uncertainty. Both the September core PCE - the Fed's main gauge of inflation - and third quarter GDP core PCE measures were anemic at 1.3% and undershot expectations. Fed funds futures readjusted after the decision, and now predict a roughly 50% chance of a rate hike at the December meeting, up sharply from below 36% going into the decision. EUR/US dropped precipitously after the decision, hitting 1.0900 from 1.1080. The pair was back above 1.1010 by week's end.
The big US economic data out this week was the advance third-quarter GDP reading, which just missed consensus expectations at +1.5%, and dramatically slowed from the second quarter rate of +3.9%. Analysts widely interpreted the slowdown as a direct result of businesses cutting back on restocking to work off an inventory glut. Businesses accumulated $56.8 billion worth of inventory in the third quarter, the smallest since the first quarter of 2014 and down sharply from $113.5 billion in the April-June period. Meanwhile, third quarter consumer spending expanded at a +3.2% annualized rate in the quarter after expanding at a +3.6% annualized rate in the second quarter, suggesting the US consumer remains quite healthy. Sales of new homes fell in September, with the annualized rate dropping to 468K from August's downwardly revised 529K rate. The data widely missed expectations and provided a strong contrast to the September existing home sales number, which came very close to the eight-year, post-crisis high seen in the August report.
The Chinese Communist Party held its 13th Plenum this week, announcing a goal for "medium-high" economic growth for 2016-2020, rather than setting any specific long term GDP targets. The official statement called for the Chinese economy to double GDP per capita by 2020 from 2010 levels, and independent economists suggest this should require annual economic growth in 6.5-7.0% range. Last Friday's PBoC monetary policy moves - it cut the one-year rate and system-wide RRR rates by 25bps and 50bps, respectively, while also deciding to remove the ceiling on bank deposit rates - were timed just ahead of the plenum, and over the weekend Chinese leaders worked to manage market expectations of a potential downgrade from the 7% target. Premier Li said 7% is not a hard target that should be "defended to the death," then later in the week commented that China needs an average GDP of 6.53% for the next five years to build a prosperous society by 2020. PBoC Deputy Governor Yi Gang commented that China can sustain growth of 6-7% for the next 3-5 years, while UBS also cut its 2016 GDP target for China to 6.2% from 6.5%. Also of interest: the party eliminated the one-child policy first introduced 35 years ago.
Congress and the Obama Administration reached a two-year budget deal to raise the debt ceiling and keep the government running through the end of Obama's term. The deal includes $80 billion in additional spending and a $32 billion increase in an emergency war-contingency fund, signaling the end of an era of fiscal austerity in Washington. The deal would push back the likelihood of hitting the debt ceiling until March 2017. Speaker Boehner (R-OH) officially stepped down this week after brokering the landmark budget deal, and Rep Paul Ryan (R-WI) assumed the position.
Shares of Valeant got no relief as the Philidor pharmacy scandal deepened. Valeant issued a flurry of press releases in an attempt to put out the flames, appointed a special committee to review the matter and retained a former deputy US attorney general to lead an investigation. Valeant claimed it believed it complied with the law in its relationship with Philidor, and then on Friday severed its relationship with the pharmacy, but only after CVS and Express Scripts both terminated Philidor as a provider. Further press reporting on the issue claimed that Philidor may have modified prescriptions in efforts to boost sales for Valeant, including changing RX codes in favor of Valeant instead of generic drugs.
About two-thirds of the S&P500 components have now reported earnings, with most firms reporting flattish profits and declining revenue, with a distinct absence of major growth drivers. Tech names Apple and Twitter made headlines after earnings. Apple saw good gains after beating expectations, with iPhone numbers in line, Mac sales at a record 5.7M units and iPad sales at their lowest level since 2011. Shares of Twitter are in the red for the week after investors were disappointed with the firm's weak growth in monthly active users (MAUs), up a mere 3 million q/q.
The third quarter marks one year since the beginning of the crude oil price meltdown, and reports from Big Oil reflected continued weak energy prices. Shell reported a $7.4 billion loss (versus a $4.5 billion y/y), or a $1.8 billion profit on an adjusted basis. Shell booked a $7.9 billion write-off for operations including its recently halted exploration venture off Alaska and a canceled heavy-oil project in Canada. Profits at BP fell 40% y/y. Earnings at Chevron and Exxon also declined, with Exxon's earnings down 47% y/y. However both Chevron and Exxon widely beat expectations on unexpected strength in their downstream operations, thanks to lower crude costs. Chevron also slashed its FY16 capex forecast by 25%. Shares of the four majors lost ground on the week, with Shell's ADRs down 4% on the week. Meanwhile, Valero's earnings were up 40% y/y, helping it to beat pretty high expectations, and also raise its dividend. Shares of VLO were up 7% on the week.
On the merger front, Piedmont Natural Gas agreed to be acquired by Duke Energy for $60/share in cash, a 40% premium to the stock's prior close, for total deal valued at $4.9B. Intercontinental Exchange reached a deal to acquire Interactive Data Corporation from Silver Lake and Warburg Pincus for $5.2 billion, including $3.65 billion in cash and $1.55 billion in ICE common stock. Pep Boys agreed to be acquired by Bridgestone for $15/share in cash in a deal valued at $835M. Walgreens Boots reached a deal to acquire Rite Aid for an enterprise value of $17.2B or $9.00/share in an all-cash deal. Shares of Starwood Hotels gained on press reports that Hyatt is in advanced talks to buy it, and that several Chinese firms are also interested.
Fri, 30 Oct 2015 16:08 PM EST
US stocks saw their fifth consecutive week of gains, with the S&P500 almost filling the gap from the August meltdown and coming to within 50 points of the all-time highs seen back in May. The Fed stood pat on rates, as expected, although UST yields rose to one-month highs later in the week as markets absorbed the message that rate liftoff could come in December. China waffled on setting a specific 2016 GDP target at the 13th plenum, deciding instead to adopt more flexible economic policy goals. In Washington, outgoing House Speaker Boehner concluded a two-year budget and debt ceiling deal before handing the baton to Paul Ryan, who opened his speakership by striking a more conciliatory tone, boding well for policy success in the future. For the week, the DJIA added 0.1%, the S&P500 rose 0.2% and the Nasdaq grew 0.4%, closing out their best month in four years with the major indices each up more than 8% in October.
The FOMC meeting on Wednesday served as a reminder that the US monetary policy will be shifting soon. The statement dropped a reference to global risks restraining growth that was used to justify no rate action in September. It also referred specifically to the next meeting in mid-December as a time for the Fed to weigh a decision on rate liftoff. Fed's Lacker dissented for a second time, remaining in favor of an immediate 0.25% rate increase. While the job market looks healthy (the four-week moving average in continuing claims sank to its lowest level since 1973), inflation continues to be the main source of uncertainty. Both the September core PCE - the Fed's main gauge of inflation - and third quarter GDP core PCE measures were anemic at 1.3% and undershot expectations. Fed funds futures readjusted after the decision, and now predict a roughly 50% chance of a rate hike at the December meeting, up sharply from below 36% going into the decision. EUR/US dropped precipitously after the decision, hitting 1.0900 from 1.1080. The pair was back above 1.1010 by week's end.
The big US economic data out this week was the advance third-quarter GDP reading, which just missed consensus expectations at +1.5%, and dramatically slowed from the second quarter rate of +3.9%. Analysts widely interpreted the slowdown as a direct result of businesses cutting back on restocking to work off an inventory glut. Businesses accumulated $56.8 billion worth of inventory in the third quarter, the smallest since the first quarter of 2014 and down sharply from $113.5 billion in the April-June period. Meanwhile, third quarter consumer spending expanded at a +3.2% annualized rate in the quarter after expanding at a +3.6% annualized rate in the second quarter, suggesting the US consumer remains quite healthy. Sales of new homes fell in September, with the annualized rate dropping to 468K from August's downwardly revised 529K rate. The data widely missed expectations and provided a strong contrast to the September existing home sales number, which came very close to the eight-year, post-crisis high seen in the August report.
The Chinese Communist Party held its 13th Plenum this week, announcing a goal for "medium-high" economic growth for 2016-2020, rather than setting any specific long term GDP targets. The official statement called for the Chinese economy to double GDP per capita by 2020 from 2010 levels, and independent economists suggest this should require annual economic growth in 6.5-7.0% range. Last Friday's PBoC monetary policy moves - it cut the one-year rate and system-wide RRR rates by 25bps and 50bps, respectively, while also deciding to remove the ceiling on bank deposit rates - were timed just ahead of the plenum, and over the weekend Chinese leaders worked to manage market expectations of a potential downgrade from the 7% target. Premier Li said 7% is not a hard target that should be "defended to the death," then later in the week commented that China needs an average GDP of 6.53% for the next five years to build a prosperous society by 2020. PBoC Deputy Governor Yi Gang commented that China can sustain growth of 6-7% for the next 3-5 years, while UBS also cut its 2016 GDP target for China to 6.2% from 6.5%. Also of interest: the party eliminated the one-child policy first introduced 35 years ago.
Congress and the Obama Administration reached a two-year budget deal to raise the debt ceiling and keep the government running through the end of Obama's term. The deal includes $80 billion in additional spending and a $32 billion increase in an emergency war-contingency fund, signaling the end of an era of fiscal austerity in Washington. The deal would push back the likelihood of hitting the debt ceiling until March 2017. Speaker Boehner (R-OH) officially stepped down this week after brokering the landmark budget deal, and Rep Paul Ryan (R-WI) assumed the position.
Shares of Valeant got no relief as the Philidor pharmacy scandal deepened. Valeant issued a flurry of press releases in an attempt to put out the flames, appointed a special committee to review the matter and retained a former deputy US attorney general to lead an investigation. Valeant claimed it believed it complied with the law in its relationship with Philidor, and then on Friday severed its relationship with the pharmacy, but only after CVS and Express Scripts both terminated Philidor as a provider. Further press reporting on the issue claimed that Philidor may have modified prescriptions in efforts to boost sales for Valeant, including changing RX codes in favor of Valeant instead of generic drugs.
About two-thirds of the S&P500 components have now reported earnings, with most firms reporting flattish profits and declining revenue, with a distinct absence of major growth drivers. Tech names Apple and Twitter made headlines after earnings. Apple saw good gains after beating expectations, with iPhone numbers in line, Mac sales at a record 5.7M units and iPad sales at their lowest level since 2011. Shares of Twitter are in the red for the week after investors were disappointed with the firm's weak growth in monthly active users (MAUs), up a mere 3 million q/q.
The third quarter marks one year since the beginning of the crude oil price meltdown, and reports from Big Oil reflected continued weak energy prices. Shell reported a $7.4 billion loss (versus a $4.5 billion y/y), or a $1.8 billion profit on an adjusted basis. Shell booked a $7.9 billion write-off for operations including its recently halted exploration venture off Alaska and a canceled heavy-oil project in Canada. Profits at BP fell 40% y/y. Earnings at Chevron and Exxon also declined, with Exxon's earnings down 47% y/y. However both Chevron and Exxon widely beat expectations on unexpected strength in their downstream operations, thanks to lower crude costs. Chevron also slashed its FY16 capex forecast by 25%. Shares of the four majors lost ground on the week, with Shell's ADRs down 4% on the week. Meanwhile, Valero's earnings were up 40% y/y, helping it to beat pretty high expectations, and also raise its dividend. Shares of VLO were up 7% on the week.
On the merger front, Piedmont Natural Gas agreed to be acquired by Duke Energy for $60/share in cash, a 40% premium to the stock's prior close, for total deal valued at $4.9B. Intercontinental Exchange reached a deal to acquire Interactive Data Corporation from Silver Lake and Warburg Pincus for $5.2 billion, including $3.65 billion in cash and $1.55 billion in ICE common stock. Pep Boys agreed to be acquired by Bridgestone for $15/share in cash in a deal valued at $835M. Walgreens Boots reached a deal to acquire Rite Aid for an enterprise value of $17.2B or $9.00/share in an all-cash deal. Shares of Starwood Hotels gained on press reports that Hyatt is in advanced talks to buy it, and that several Chinese firms are also interested.
Thursday, September 3, 2015
TradeTheNews.com September-October
2015 Outlook: Countdown to Liftoff
Wed, 02 Sep 2015 23:56 PM EST
Who says August markets are dull? Over the past few weeks, global markets have been whipsawed, gripped by the dual fears of a Chinese slowdown and the coming end of ultra-loose Fed policy. To some extent the wild August action may be a healthy jolt of reality for markets that had grown complacent. That was certainly the case for Chinese stock investors who mostly consist of newcomers to the game and had only seen big gains in equities, but learned a lesson about risk over the last several weeks.
China's policy makers have tried to ease the blow with more stimulus and anti-short seller rhetoric, but this year's big double digit gains on the Shanghai index have now vanished, leaving many Chinese momentum investors stunned. Other global markets felt the ripples, plunging most global equity indices into correction, and ending one of the S&P500's longest ever winning streaks without a 10% pullback. Because of Germany's heavily export based economy, the China scare pushed the DAX into the dubious distinction of becoming first major western stock market to enter a bear market in this cycle.
This summer's market hurdles were difficult to navigate and caused some stumbles, but they landed in our target zone. We won the coin toss on the fate of the Euro Zone - a Grexit was averted at the eleventh hour. As predicted, low inflation continued to be a thorn in the side of the global economy and cheap oil got even cheaper despite some painful cutbacks in the North American shale industry. China's policy makers rode to the rescue of its stock market, as expected, though the measures were doled out in a ham handed fashion and have seen inconclusive results. The countdown clock on Fed rate liftoff remains obscured: though many at the Fed seem eager to get the rate tightening mission started, recent market gyrations have given policymakers at mission control another reason to hold back.
The challenges for the markets could be even greater in the next few months. A new season of political theater is upon us, with the potential for another US budget clash and a fresh round of European elections including, alas, yet another Greek ballot. Questions about China's growth remain a hot topic and officials in Beijing may need to refuel the stimulus booster rockets again in coming months. Slowing growth in China and its currency devaluation will keep global inflation weak. Energy markets will continue to suffer from that weak growth and inflation outlook and also from ongoing supply and demand imbalances. All of these issues will factor into the Fed's key decision on rate liftoff.
Entering New Political Orbits
Since securing its third rescue package from European creditors, Greece has found some calm, though there may be one final stage to achieve the successful launch of the bailout. In an effort to re-consolidate his power before the effects of the new bailout reforms are felt, Prime Minister Tsipras resigned his post and called a snap election (the fourth election in three and a half years in Greece). The September 20 vote is essentially another referendum and Tsipras' Syriza party - minus the defectors that voted against the bailout agreement - holds a narrow lead over the main opposition New Democracy party. Even if the opposition New Democracy pulls out a victory, it would likely abide by the terms of the bailout, but any political turnover could interfere with the important process of getting the IMF involved in the new Greek bailout arrangement. As German Chancellor Merkel put it, the new Greek deal ends "uncertainties", though the same sentiment occurred after the first and second Greek bailouts. It remains to be seen if Athens' woes will reemerge as a problem in another year or two.
The clamor of the Greek crisis may finally be over, but its echo may be heard in Spain, where general elections are to be held sometime before Christmas. Many analysts believe the small compromises on debt relief won by Syriza will strengthen the hand of other populist protest parties, starting with Podemos in Spain. Formed in 2014, the upstart Podemos movement, led by political science professor Pablo Iglesias, has won over many voters who used to support a fragmented group of leftist parties in Spain. Late last year, polls showed Podemos running in a dead heat with the ruling conservative party (PP), though more recently it has slipped behind the PP and the main opposition center-left PSOE. But there are still a few months until the election and it's clear that Podemos will be a player in Madrid that might inspire more populist candidates in Europe's peripheral nations.
As in Greece, another revote is scheduled in neighboring Turkey. Former PM Erdogan was unable to engineer an outright parliamentary majority in June which would have allowed his AKP party to implement his plan for greatly enhancing the power of the office of the President, which Erdogan now holds. These ambitions contributed to the June ballot arriving at no conclusive winner and the subsequent failure of coalition talks, prompting a new snap election. Political uncertainty and a surge in violence have already seeded some economic instability in Turkey, which could be magnified if the poll on the first day of November results in another hung parliament.
Brazil is another country where recent economic problems have been compounded by political uncertainty. The national oil company Petrobras is embroiled in a corruption scandal in which officials pocketed millions of dollars in kickbacks from construction firms that were granted bloated contracts. The already tarnished President Rousseff has been further bruised by her connection to Petrobras, having been its chairwoman for part of the time that the graft ring operated. Though there is no evidence she benefited from the bribery scheme, Rousseff is accused of fudging government accounts to allow for more state spending ahead of her reelection last year. Pending the findings of an audit court, she may face an impeachment trial, though that would require a two-thirds majority vote of Chamber of Deputies (to remove her from office, another two-thirds vote would be needed in the Senate, which would preside over the proceedings).
If the impeachment trial is set in motion, the still popular Vice President Temer would temporarily take over Rousseff's duties. This year hehas led an effort to mend fences with the business community by taking charge of efforts to defend the nation's investment grade rating by pushing austerity legislation to reduce the deficit (as of July S&P revised the outlook on Brazil's BBB- rating to negative). Interestingly, Mr. Temer, 75, recently gave up his duties as the President's chief liaison to the legislature, perhaps indicating that he is unwilling to use his influence in the Congress to lobby for Rousseff. All told, this could set up a scenario in which the outlook for Brazil takes another hit if Rousseff is formally accused, but then finds some stability under the seasoned leadership of Temer.
In the US, the race for President is in full swing with fourteen months to go before the election. Bloviating candidates and the sense that President Obama is entering his lame duck phase could embolden the Republican controlled Congress to threaten another budget impasse this fall. Senate Majority Leader McConnell has promised it won't happen, but he may not be able to control the unpredictable House, and a recent Wall Street Journal poll found that economists feel there is a strong possibility of another budget battle that shuts down the government and threatens default this year, despite Congressional leaders' insistence otherwise. Currently the CBO estimates that the US Treasury will exhaust its borrowing capacity by late November or early December without a debt limit increase.
The long run up to the Presidential election in 2016 is contrasted by campaign season in Canada that lasts less than two months, culminating in an election on October 19. The incumbent Conservative Prime Minister Harper is vying to extend his nine years of minority government by letting the New Democratic and Liberal parties continue to split the left-of-center vote. The NDP is the official opposition party and has built a small lead in the polls over the Conservatives. The party made inroads in provincial elections earlier this year, winning control of Alberta and introduced a hike in the corporate tax rate, per the NDP party platform, and also pledged a review of oil and gas royalty rates. That could be a preview of a national victory for the NDP, which could put a further pinch on energy firms that have already been squeezed by the collapse of oil prices.
PREDICTIONS: Politics can be more harrowing than a rocket ride to the Moon. In Greece, Tsipras is expected to win the snap election by a narrow margin which should put the Greek issue to bed, though he may find it more difficult to govern outside of crisis situations and referendums. Uncertain political situations in Turkey and Spain will work against European stability at this delicate moment.
In Brazil, President Rousseff may not have 'the right stuff' to govern. A government collapse under the weight of corruption could further damage the nation's already weakened economy. That could be compounded if the sovereign rating gets downgrade to junk, which might cause a disorderly move in the Brazilian real that would bleed into other emerging market currencies.
A political folly is less likely in Washington this time given the tendency for a government shutdown to backfire on the GOP, but it won't stop some tough talk that may be disquieting for markets. Meanwhile, Canada's mercifully short campaign cycle should benefit the incumbent.
..3, 2, Yuan
China is the new epicenter of market angst. The economic growth rate there has been slowing for years and the data has been particularly underwhelming this year. The official government manufacturing PMI just slipped into contraction for the first time in six months, while the private PMI survey has been in contraction since March as new orders and exports have seen steepening declines.
The Chinese stock market didn't pay this much mind until recently. Thanks to new liberalizations, Chinese investors poured money (often on margin) into domestic stocks as the new 'hot' investment market, and equity indices launched like a rocket this spring. But the market failed to reach escape velocity and came crashing back down to earth, erasing the over 50% year-to-date gain see at its zenith.
A series of rate cuts in the first half of the year failed to staunch the bleeding in Chinese equities. Then Beijing announced it would pump billions of dollars directly into the market and enlisted brokerage houses to do the same, but with little effect. Finally, the Chinese central bank (PBoC) shocked the financial world with a sudden devaluation of the yuan, amounting to 5% over three days.
At this point, Chinese policy looked panicked and policymakers seemed lost. The knee jerk responses to the stock market bubble deflating took away focus from the slow, deliberate efforts of the government over the last decade to institute reforms while still supporting growth. Officials blamed the stock market burn out on "malicious short sellers" and some tried to pin it on the Fed's impending rate hike decision. And after spending upwards of $200 billion to prop up the stock market, China abruptly scrubbed its plunge protection program.
The PBoC currency devaluation was one small step for the yuan but a giant leap for the global currency regime. The move will certainly help the Chinese economy by supporting exports, but some economists fret that China's domestic deflation will be among those exports, even as US and European importers enjoy lower cost products from China. The weaker yuan will also saddle some Chinese firms that have large dollar debts with big foreign exchange losses.
The most concerning issue with the devaluation of the yuan is whether it will embolden other developing economies to join the race to prop up their own exports, starting a genuine currency war. Already, in the wake of the China currency move, Vietnam widened its FX trading band from 1% to 3%, effectively devaluing its currency. Other emerging markets like Turkey and Mexico have seen their currencies fall too-far too-fast and have increased FX interventions.
So far global policy leaders are playing it cool. The PBoC effectively defanged potential critics by offering just what has been asked of it - more currency flexibility (and in the aftermath the IMF agreed it was appropriate, perhaps helping the case for the yuan gaining status as an international reserve currency next year). Ahead of a G20 meeting of finance ministers and central bankers in Turkey (Sept 4-5), reports say that those leading economies will downplay the notion of competitive devaluation being a major issue.
The subject is bound to come up again when China President Xi Jinping makes his first state visit to the US in late September (no set date yet). Many Congressmen condemned the currency move as manipulation, and it may throw a monkey wrench into the Obama Administration's efforts to seal the trans-Pacific trade pact. The White House will likely restrain itself to repeating its mantra that it wants to see more rapid reform efforts in China. The US Treasury's semi-annual currency report, due out this fall, should echo that sentiment, though it could also be used as a platform to issue a sterner warning to nations that are considering their own currency devaluations.
Neighboring Japan, which has hit its own soft patch, expressed some concerns about China's actions. Japan just reported a drop in Q2 GDP, its first economic contraction in three quarters, and a setback for the policies of Prime Minister Abe. The data was blamed on weaker external demand from the US and China, leading to a significant drop in exports. A senior advisor to Abe made it clear that Japan can respond if necessary, suggesting the Bank of Japan should consider extra easing if the Yen rises sharply in reaction to the situation in China or if Japan's Q3 GDP fails to register growth. For his part, BOJ governor Kuroda agreed he is prepared to adjust Quantitative and Qualitative Easing (QQE) if needed, though as of late August the current pace of the program was sufficient to meet inflation objectives despite the drop in oil prices. He also indicated that excessive appreciation of the Yen has been corrected.
PREDICTIONS: China's stock market appears to have regained a measure of stability in recent days, though the country's momentum-seeking investor class may shy away from equities for a while and move on to another asset class. Though the market swings have drawn comparisons to the volatility seen around the collapse of Lehman Brothers or even the 1929 stock market crash, most economists see limited risk to China's real economy from the stock tumult and even less for the global economy.
If China's broader economy continues to weaken, things could get more serious for the global outlook. China trade accounts for only 1% of US GDP but its closer to 3% of the export-reliant German economy, so more China weakness could push the euro back toward parity with the dollar. There would obviously be an even bigger impact on commodity driven markets like Brazil and Australia that have helped supply China through its boom times.
But despite the recent jitters, officials in Beijing remain confident in their GDP targets and there are no clear signs of a consumer malaise. Market watchers should take some comfort from the fact that, in the worst throes of the August markets, Apple CEO Tim Cook took the extraordinary measure of announcing that business in China remained strong in recent weeks. Another solid GDP report for Q3 (Oct 14) should foster more stability.
Chinese markets will be closed for a holiday on September 3 and 4, which may offer some welcome relief as it is clear more work needs to be done after the technical damage done by the stock market convulsions. After the clumsy effort to directly prop up the stock market, China's leaders will probably return to more traditional stimulus efforts like rate cuts to keep the economic engine humming. The unrestrained ease with which the PBoC devalued the yuan does raise the question of whether this will become a more regular part of its stimulus toolkit. At the time of the move, some press reports claimed that influential voices in the government were pushing for a 10% devaluation. Central bankers quickly denied this report, but did say they would step in when the currency market is "distorted." Diminishing returns from traditional accommodation may also lead to renewed speculation about China launching its own brand of quantitative easing.
Houston, We Have a Problem
The oil patch has suffered amidst the crash landing in the energy market. Excess production has more than halved the price of oil in the last twelve months, and dealt crude futures a streak of eight straight weekly losses, the worst run in three decades. Faced with this reality, oil majors have universally cut their capital spending budgets, and some oil services firms have reduced their hefty dividend payments as they batten down the hatches. Since the swoon started late last year, the US shale industry has decommissioned over half of its land-based drilling rigs, but that hasn't been enough to prop up the energy market as OPEC has stubbornly maintained output levels.
Dramatically lower oil prices are boosting demand. The International Energy Agency just raised its forecast for 2015 world oil demand growth to 1.6 million barrels per day (a 200 thousand bpd increase from its prior forecast), highlighting a "drastic uptick" largely as a result of low prices. But despite demand growing at the fastest rate in five years, the EIA said the global supply overhang is likely to persist well into 2016.
Saudi Arabia has been pumping out about 10.5 million bpd all summer, determined to hold onto market share, even though lower oil revenues have forced the Kingdom to issue new sovereign debt for the first time in eight years. Energy market developments are bound to come up when Saudi King Salman visits the US this month (Sept 4). The official topics of discussion are more political, including regional security in light of Saudi's skirmish with the Houthis in Yemen and the Iran nuclear deal. Some press reports have said that Saudi will look to implement a modest 300 thousand bpd production cut this fall, but based only on the domestic demand environment - it would not be expected to impact export levels.
Some non-Gulf OPEC nations have been pleading with the Saudis to agree to some response to lower oil, and lately there are signs that the pain of low crude prices may be eroding the Saudi hard line. A recent OPEC statement said the cartel would be willing to talk with other producers about steps to get "fair prices," as long as the discussions take place "on a level playing field." That may open the door for an arrangement between Saudi Arabia and Russia, who are fiercely contending over the Chinese oil market (and lately Russia is winning - it surpassed its rival as China's biggest oil supplier in May).
The broader commodities market hasn't been immune to the forces acting on energy. An impending Fed rate hike has created some aversion to investments in dollar denominated commodities. Additionally, the PBoC's decision to devalue its currency added to the downward pressure on raw material prices already felt because of China's gradual economic rebalancing toward less commodity intensive growth.
Cheaper commodities have fed into weak inflation, which has become one of the biggest concerns of global central bankers today, as they desperately work to avoid the fate of Japan, which went through a decade of deflation woes. A Fed paper prepared for the Jackson Hole symposium laid out the risks this way: The risk of of experiencing deflation in US over the next five years increases from zero in short term to about 15%, for Japan, risk remains around 50%, and for the Eurozone, the short-run the risk of deflation is about 5% and it increases to about 20% over the next five years.
Putting aside Japan, Europe may be the most vulnerable to continued commodity weakness pushing down inflation. The Eurozone has been troubled by low inflation for several years and the fear of deflation was enough to inspire the European Central Bank to launch its QE program in March. Given the market events in August, there are now some calls for the ECB to do even more. Analysts at JP Morgan recently wrote that the ECB may consider additional stimulus to offset economic risks arising from emerging market weakness (the same report also suggested the BOJ could take a more aggressive tack in early 2016 if negative core inflation readings crop up). Meanwhile, the IMF said in July that the QE program may need to be extended beyond the presumed end date of September 2016 and that Eurozone inflation won't reach the target level through 2020.
PREDICTIONS: Saudi Arabia has been playing a game of chicken with Russia and with shale oil producers who reacted by getting more efficient. But if crude prices retest recent lows it may be the Saudis that finally blink, as long as they are given some opportunity to save face. However, even if a gentlemen's agreement can be reached amongst producer nations, the massive glut of supply is not going to vanish overnight.
Crude is the canary in the coal mine: if oil prices can't stabilize, the broader commodity market and inflation forecasts will be at risk. The last ten months of lower oil prices have done little to boost global consumer spending, so the current low price environment may be more indicative of a weak economy with tepid demand rather than a harbinger of a business cycle about to blast-off after being refueled by cheap oil. Even during the height of energy demand this summer oil prices could not gain any traction, so as we move into the autumn and demand sees a seasonal decline, there is no fundamental basis for a rebound. The evidence suggests that low inflation will persist for at least the rest of 2015.
The question is whether the drop in energy prices is due to a global economic slowdown in the making or if it's completely supply driven. There are some indications that demand is healthy, and a three-day, 30% snapback rally at the end of August fostered some hope that petroleum futures were bottoming out. Yet it remains to be seen if the lows will be retested, and some energy analysts still foresee WTI crude trading below $30/barrel.
Analysts will have their radar trained on the ECB policy reaction to the threats from weak commodities and the resultant problems in emerging market economies. The ECB is only about a third of the way through pumping more than $1 trillion into the Eurozone economy, but if the flirtation with deflation persists, central bank officials will begin to aggressively jawbone the issue. In the nearer term, weak oil and a slowing China economy, along with a recent rebound in the euro from safe-haven flows could prompt the ECB to revise down its inflation outlook at its next policy meeting (Sept 3). At this point, the notion of more ECB stimulus is a moonshot - not likely to pan out, but a very dramatic moment if it does occur.
Ladies and Gentlemen, We Have Liftoff
The Fed decision in September could be fraught, a damned-if-you-do damned-if-you-don't situation. Liftoff this month could have the markets seeing stars, vexed by the prospect of rates running higher out of step with other global central banks that are still at full throttle on stimulus. On the other hand, if the Fed decides to abort in September it could indicate that the central bank has some indications of economic deterioration that could be bearish.
The August jobs report (Sept 4) is seen as a low hurdle for rate liftoff - only a terrible disappointment would contribute to a no go decision. If the non-farm payrolls come in well above expectations it could help justify rate liftoff this month. However, August is known for producing anomalous jobs data and has missed NFP forecasts for each of the last four years, sometimes by a wide margin.
There are other factors that the Fed will be considering besides the data as it computes the optimal timing for liftoff. At the Jackson Hole symposium a number of FOMC members acknowledged that the recent market turmoil could factor into the decision making process. Fed Vice-Chairman Stanley Fischer encapsulated the sentiment by saying that financial market developments are a concern, though the turmoil could dissipate quickly, and that the committee has two more weeks of data to consider before deciding. To many analysts, Fischer's comments indicated that while rate liftoff is not a sure thing in September, it's probably unrealistic to think that the Fed will push back the first rate hike to next year.
The sudden, steep stock market correction last month, which culminated in a mini 'flash crash' on August 24, may have shaken the confidence of retail investors, but there are still many reasons the Fed could still see a green light for September rate liftoff. Growth data has been solid, most notably the Q2 GDP revision that brought growth in the quarter up to 3.7%, five-tenths higher than expected, on improved consumer and business spending. The labor market has continued to recuperate and consumer confidence readings have been solid. Additionally, many commercial banks, which would benefit from higher interest rates, are lobbying the Fed to get on with it. The Fed may also not want to chance waiting until mid-December when conditions are more illiquid.
The arguments against a move this month start with the concern that even if the US economy can withstand slightly higher rates, the global economy won't be able to handle the g-forces of liftoff (and will end up puking lower). As steward of the emerging markets, the IMF has been warning about this outcome all year. Now some prominent economists, including two at Barclays, have begun to agree that the Fed should wait until 2016. Other voices argue that the Fed "missed the launch window" earlier this year and that recent market volatility makes now too precarious a time for a rate hike.
For the Fed itself, weak inflation is the biggest sticking point. The core PCE price index has edged up only 0.1% month over month for each of the last six months, and in July the year over year figure slipped a tenth to 1.2%. July core CPI undershot expectations, and to cap it off the Q2 employment cost index rose only 0.2%, four-tenths less than forecast and its smallest rise in three decades.
The start of a rate tightening cycle is difficult for businesses: data compiled by Goldman Sachs indicates that in the quarter after the last dozen tightening regimes began, price to earnings ratios contracted an average of 7.2%. S&P analysts have noted that during the six months before or after the first rate hike, the S&P500 index experienced a decline of 5% or more about 80% of the time (in 13 out of 18 cycles since WWII).
That could spell trouble for companies that are already struggling with slow growth, but there are a number of factors that makes this cycle unique. This time around, the Fed is under no pressure to curb unsustainable growth or surging inflation, so it will likely be able to take it very slow. Also, the starting point from the zero bound is unprecedented and bond yields are much lower than in past rate tightening cycles. In the last half dozen cycles the average starting point for the fed funds rate has been around 5% and the 10-year treasury close to 7%. That would support the thesis that this time rising rates will not be enough to wreck the current bull market in stocks, and bond yields will rise gradually with Fed rates and improving growth trends.
If the Fed decides against liftoff in September, a key signal will come from Richmond Fed President Lacker, seen as the leading hawk on the current FOMC but who has thus far voted with the majority to refrain from rate action. In early September, Mr. Lacker plans to give a speech entitled "The Case Against Further Delay", making it abundantly clear that if the Fed stays its hand in September he will register the first dissent of the year, exerting pressure on his colleagues for an October or December move.
PREDICTIONS: The start of a new rate cycle is always the trickiest part, finding the right moment between moving too early and waiting too long. The Fed might be experiencing something akin to the dread astronauts must feel while sitting on the launch pad just before takeoff - confident in their objective but worried about the perilous means of reaching it. A false step at this point could blow up the Fed's credibility.
Though the Fed's first hike in nine years may be challenging for some markets, the underlying reasons for tightening are bullish - a better economy that the Fed believes can handle less accommodation. Some analysts theorize that the Fed may simply want to create some room to maneuver in case negative macro events required some renewed stimulus from the central bank. A couple of 25 basis point hikes this year would give the Fed the ability to cut rates again if things sour in China or elsewhere. So the bar may be very low for rate liftoff, and the Fed's emphasis on the rate path after liftoff may be the proper focus.
If they do act in September, the FOMC could ease the blow by ratcheting back longer run rate projections as they continue to emphasize the new tightening cycle will be very gradual and peak at a lower than usual altitude. And if the bond market doesn't explode on the launch pad, it could dispel a substantial amount of the anxiety regarding mildly tighter Fed policy.
Chances are, however, that by mid-September the FOMC majority will still see conditions as unsatisfactory, and will rely on the caveat of strict "data dependence" to abort rate liftoff. Despite a hawkish slant out of Jackson Hole, fed fund futures haven't gotten back above a 1-in-3 chance of a rate rise this month, meaning a hike now would be a "surprise." Historically September and October are two of the toughest months for stock markets, which might be enough to dissuade the Fed from acting at the next meeting if that pattern holds true. Given the gravity of the decision and with the Fed's credibility at stake, Yellen and her crew will probably wait to see if the skies are sunnier in October or December. They will leave the launch window open for liftoff later this year, but developments in China could further retard the trajectory of any subsequent rate hikes.
CALENDAR (based on ET)
SEPTEMBER
(US Treasury Currency Report, no set date)
1: Euro Zone Unemployment; US ISM Manufacturing PMI
2: US Factory Orders
3: UK Services PMI; ECB Policy Decision and Press Conf; US Trade Balance; US ISM Non-Manufacturing PMI; China markets closed for holiday Sept 3-4
4: German Factory Orders; US Payrolls and Unemployment; G20 Finance Ministers and Central Bank Officials meet in Ankara, Turkey (2-day meeting)
7: Japan Final Q2 GDP
8: China Trade Balance (tentative)
9: UK Manufacturing Production; US JOLTS Jobs Openings; China CPI & PPI
10: BOE Policy Decision
11: US PPI; US Preliminary University of Michigan Confidence
13: China Industrial Production
14: BOJ Policy Statement (tentative)
15: German ZEW Economic Sentiment; UK Inflation Hearings; US Retail Sales; US Industrial Production
16: UK CPI & PPI; Euro Zone Final CPI; US CPI
17: US Housing Starts & Building Permits; US Philly Fed Manufacturing Index; FOMC Policy Decision, Updated Forecast & Press Conference; BOJ Minutes
18: UK Retail Sales
20: Greece snap election
21: US Existing Home Sales; China Caixin Flash Manufacturing PMI
22: Various EU Flash PMI readings
23: German Ifo Business Climate
24: US Durable Goods Orders; US New Home Sales; Tokyo Core CPI
25: US Final Q2 GDP
28: US Personal Income & Spending; US Core PCE; Japan Household Spending
29: US Consumer Confidence
30: UK Final Q2 GDP; Euro Zone Flash CPI; Euro Zone Unemployment; US Chicago PMI; China Manufacturing and Non-Manufacturing PMIs
Wed, 02 Sep 2015 23:56 PM EST
Who says August markets are dull? Over the past few weeks, global markets have been whipsawed, gripped by the dual fears of a Chinese slowdown and the coming end of ultra-loose Fed policy. To some extent the wild August action may be a healthy jolt of reality for markets that had grown complacent. That was certainly the case for Chinese stock investors who mostly consist of newcomers to the game and had only seen big gains in equities, but learned a lesson about risk over the last several weeks.
China's policy makers have tried to ease the blow with more stimulus and anti-short seller rhetoric, but this year's big double digit gains on the Shanghai index have now vanished, leaving many Chinese momentum investors stunned. Other global markets felt the ripples, plunging most global equity indices into correction, and ending one of the S&P500's longest ever winning streaks without a 10% pullback. Because of Germany's heavily export based economy, the China scare pushed the DAX into the dubious distinction of becoming first major western stock market to enter a bear market in this cycle.
This summer's market hurdles were difficult to navigate and caused some stumbles, but they landed in our target zone. We won the coin toss on the fate of the Euro Zone - a Grexit was averted at the eleventh hour. As predicted, low inflation continued to be a thorn in the side of the global economy and cheap oil got even cheaper despite some painful cutbacks in the North American shale industry. China's policy makers rode to the rescue of its stock market, as expected, though the measures were doled out in a ham handed fashion and have seen inconclusive results. The countdown clock on Fed rate liftoff remains obscured: though many at the Fed seem eager to get the rate tightening mission started, recent market gyrations have given policymakers at mission control another reason to hold back.
The challenges for the markets could be even greater in the next few months. A new season of political theater is upon us, with the potential for another US budget clash and a fresh round of European elections including, alas, yet another Greek ballot. Questions about China's growth remain a hot topic and officials in Beijing may need to refuel the stimulus booster rockets again in coming months. Slowing growth in China and its currency devaluation will keep global inflation weak. Energy markets will continue to suffer from that weak growth and inflation outlook and also from ongoing supply and demand imbalances. All of these issues will factor into the Fed's key decision on rate liftoff.
Entering New Political Orbits
Since securing its third rescue package from European creditors, Greece has found some calm, though there may be one final stage to achieve the successful launch of the bailout. In an effort to re-consolidate his power before the effects of the new bailout reforms are felt, Prime Minister Tsipras resigned his post and called a snap election (the fourth election in three and a half years in Greece). The September 20 vote is essentially another referendum and Tsipras' Syriza party - minus the defectors that voted against the bailout agreement - holds a narrow lead over the main opposition New Democracy party. Even if the opposition New Democracy pulls out a victory, it would likely abide by the terms of the bailout, but any political turnover could interfere with the important process of getting the IMF involved in the new Greek bailout arrangement. As German Chancellor Merkel put it, the new Greek deal ends "uncertainties", though the same sentiment occurred after the first and second Greek bailouts. It remains to be seen if Athens' woes will reemerge as a problem in another year or two.
The clamor of the Greek crisis may finally be over, but its echo may be heard in Spain, where general elections are to be held sometime before Christmas. Many analysts believe the small compromises on debt relief won by Syriza will strengthen the hand of other populist protest parties, starting with Podemos in Spain. Formed in 2014, the upstart Podemos movement, led by political science professor Pablo Iglesias, has won over many voters who used to support a fragmented group of leftist parties in Spain. Late last year, polls showed Podemos running in a dead heat with the ruling conservative party (PP), though more recently it has slipped behind the PP and the main opposition center-left PSOE. But there are still a few months until the election and it's clear that Podemos will be a player in Madrid that might inspire more populist candidates in Europe's peripheral nations.
As in Greece, another revote is scheduled in neighboring Turkey. Former PM Erdogan was unable to engineer an outright parliamentary majority in June which would have allowed his AKP party to implement his plan for greatly enhancing the power of the office of the President, which Erdogan now holds. These ambitions contributed to the June ballot arriving at no conclusive winner and the subsequent failure of coalition talks, prompting a new snap election. Political uncertainty and a surge in violence have already seeded some economic instability in Turkey, which could be magnified if the poll on the first day of November results in another hung parliament.
Brazil is another country where recent economic problems have been compounded by political uncertainty. The national oil company Petrobras is embroiled in a corruption scandal in which officials pocketed millions of dollars in kickbacks from construction firms that were granted bloated contracts. The already tarnished President Rousseff has been further bruised by her connection to Petrobras, having been its chairwoman for part of the time that the graft ring operated. Though there is no evidence she benefited from the bribery scheme, Rousseff is accused of fudging government accounts to allow for more state spending ahead of her reelection last year. Pending the findings of an audit court, she may face an impeachment trial, though that would require a two-thirds majority vote of Chamber of Deputies (to remove her from office, another two-thirds vote would be needed in the Senate, which would preside over the proceedings).
If the impeachment trial is set in motion, the still popular Vice President Temer would temporarily take over Rousseff's duties. This year hehas led an effort to mend fences with the business community by taking charge of efforts to defend the nation's investment grade rating by pushing austerity legislation to reduce the deficit (as of July S&P revised the outlook on Brazil's BBB- rating to negative). Interestingly, Mr. Temer, 75, recently gave up his duties as the President's chief liaison to the legislature, perhaps indicating that he is unwilling to use his influence in the Congress to lobby for Rousseff. All told, this could set up a scenario in which the outlook for Brazil takes another hit if Rousseff is formally accused, but then finds some stability under the seasoned leadership of Temer.
In the US, the race for President is in full swing with fourteen months to go before the election. Bloviating candidates and the sense that President Obama is entering his lame duck phase could embolden the Republican controlled Congress to threaten another budget impasse this fall. Senate Majority Leader McConnell has promised it won't happen, but he may not be able to control the unpredictable House, and a recent Wall Street Journal poll found that economists feel there is a strong possibility of another budget battle that shuts down the government and threatens default this year, despite Congressional leaders' insistence otherwise. Currently the CBO estimates that the US Treasury will exhaust its borrowing capacity by late November or early December without a debt limit increase.
The long run up to the Presidential election in 2016 is contrasted by campaign season in Canada that lasts less than two months, culminating in an election on October 19. The incumbent Conservative Prime Minister Harper is vying to extend his nine years of minority government by letting the New Democratic and Liberal parties continue to split the left-of-center vote. The NDP is the official opposition party and has built a small lead in the polls over the Conservatives. The party made inroads in provincial elections earlier this year, winning control of Alberta and introduced a hike in the corporate tax rate, per the NDP party platform, and also pledged a review of oil and gas royalty rates. That could be a preview of a national victory for the NDP, which could put a further pinch on energy firms that have already been squeezed by the collapse of oil prices.
PREDICTIONS: Politics can be more harrowing than a rocket ride to the Moon. In Greece, Tsipras is expected to win the snap election by a narrow margin which should put the Greek issue to bed, though he may find it more difficult to govern outside of crisis situations and referendums. Uncertain political situations in Turkey and Spain will work against European stability at this delicate moment.
In Brazil, President Rousseff may not have 'the right stuff' to govern. A government collapse under the weight of corruption could further damage the nation's already weakened economy. That could be compounded if the sovereign rating gets downgrade to junk, which might cause a disorderly move in the Brazilian real that would bleed into other emerging market currencies.
A political folly is less likely in Washington this time given the tendency for a government shutdown to backfire on the GOP, but it won't stop some tough talk that may be disquieting for markets. Meanwhile, Canada's mercifully short campaign cycle should benefit the incumbent.
..3, 2, Yuan
China is the new epicenter of market angst. The economic growth rate there has been slowing for years and the data has been particularly underwhelming this year. The official government manufacturing PMI just slipped into contraction for the first time in six months, while the private PMI survey has been in contraction since March as new orders and exports have seen steepening declines.
The Chinese stock market didn't pay this much mind until recently. Thanks to new liberalizations, Chinese investors poured money (often on margin) into domestic stocks as the new 'hot' investment market, and equity indices launched like a rocket this spring. But the market failed to reach escape velocity and came crashing back down to earth, erasing the over 50% year-to-date gain see at its zenith.
A series of rate cuts in the first half of the year failed to staunch the bleeding in Chinese equities. Then Beijing announced it would pump billions of dollars directly into the market and enlisted brokerage houses to do the same, but with little effect. Finally, the Chinese central bank (PBoC) shocked the financial world with a sudden devaluation of the yuan, amounting to 5% over three days.
At this point, Chinese policy looked panicked and policymakers seemed lost. The knee jerk responses to the stock market bubble deflating took away focus from the slow, deliberate efforts of the government over the last decade to institute reforms while still supporting growth. Officials blamed the stock market burn out on "malicious short sellers" and some tried to pin it on the Fed's impending rate hike decision. And after spending upwards of $200 billion to prop up the stock market, China abruptly scrubbed its plunge protection program.
The PBoC currency devaluation was one small step for the yuan but a giant leap for the global currency regime. The move will certainly help the Chinese economy by supporting exports, but some economists fret that China's domestic deflation will be among those exports, even as US and European importers enjoy lower cost products from China. The weaker yuan will also saddle some Chinese firms that have large dollar debts with big foreign exchange losses.
The most concerning issue with the devaluation of the yuan is whether it will embolden other developing economies to join the race to prop up their own exports, starting a genuine currency war. Already, in the wake of the China currency move, Vietnam widened its FX trading band from 1% to 3%, effectively devaluing its currency. Other emerging markets like Turkey and Mexico have seen their currencies fall too-far too-fast and have increased FX interventions.
So far global policy leaders are playing it cool. The PBoC effectively defanged potential critics by offering just what has been asked of it - more currency flexibility (and in the aftermath the IMF agreed it was appropriate, perhaps helping the case for the yuan gaining status as an international reserve currency next year). Ahead of a G20 meeting of finance ministers and central bankers in Turkey (Sept 4-5), reports say that those leading economies will downplay the notion of competitive devaluation being a major issue.
The subject is bound to come up again when China President Xi Jinping makes his first state visit to the US in late September (no set date yet). Many Congressmen condemned the currency move as manipulation, and it may throw a monkey wrench into the Obama Administration's efforts to seal the trans-Pacific trade pact. The White House will likely restrain itself to repeating its mantra that it wants to see more rapid reform efforts in China. The US Treasury's semi-annual currency report, due out this fall, should echo that sentiment, though it could also be used as a platform to issue a sterner warning to nations that are considering their own currency devaluations.
Neighboring Japan, which has hit its own soft patch, expressed some concerns about China's actions. Japan just reported a drop in Q2 GDP, its first economic contraction in three quarters, and a setback for the policies of Prime Minister Abe. The data was blamed on weaker external demand from the US and China, leading to a significant drop in exports. A senior advisor to Abe made it clear that Japan can respond if necessary, suggesting the Bank of Japan should consider extra easing if the Yen rises sharply in reaction to the situation in China or if Japan's Q3 GDP fails to register growth. For his part, BOJ governor Kuroda agreed he is prepared to adjust Quantitative and Qualitative Easing (QQE) if needed, though as of late August the current pace of the program was sufficient to meet inflation objectives despite the drop in oil prices. He also indicated that excessive appreciation of the Yen has been corrected.
PREDICTIONS: China's stock market appears to have regained a measure of stability in recent days, though the country's momentum-seeking investor class may shy away from equities for a while and move on to another asset class. Though the market swings have drawn comparisons to the volatility seen around the collapse of Lehman Brothers or even the 1929 stock market crash, most economists see limited risk to China's real economy from the stock tumult and even less for the global economy.
If China's broader economy continues to weaken, things could get more serious for the global outlook. China trade accounts for only 1% of US GDP but its closer to 3% of the export-reliant German economy, so more China weakness could push the euro back toward parity with the dollar. There would obviously be an even bigger impact on commodity driven markets like Brazil and Australia that have helped supply China through its boom times.
But despite the recent jitters, officials in Beijing remain confident in their GDP targets and there are no clear signs of a consumer malaise. Market watchers should take some comfort from the fact that, in the worst throes of the August markets, Apple CEO Tim Cook took the extraordinary measure of announcing that business in China remained strong in recent weeks. Another solid GDP report for Q3 (Oct 14) should foster more stability.
Chinese markets will be closed for a holiday on September 3 and 4, which may offer some welcome relief as it is clear more work needs to be done after the technical damage done by the stock market convulsions. After the clumsy effort to directly prop up the stock market, China's leaders will probably return to more traditional stimulus efforts like rate cuts to keep the economic engine humming. The unrestrained ease with which the PBoC devalued the yuan does raise the question of whether this will become a more regular part of its stimulus toolkit. At the time of the move, some press reports claimed that influential voices in the government were pushing for a 10% devaluation. Central bankers quickly denied this report, but did say they would step in when the currency market is "distorted." Diminishing returns from traditional accommodation may also lead to renewed speculation about China launching its own brand of quantitative easing.
Houston, We Have a Problem
The oil patch has suffered amidst the crash landing in the energy market. Excess production has more than halved the price of oil in the last twelve months, and dealt crude futures a streak of eight straight weekly losses, the worst run in three decades. Faced with this reality, oil majors have universally cut their capital spending budgets, and some oil services firms have reduced their hefty dividend payments as they batten down the hatches. Since the swoon started late last year, the US shale industry has decommissioned over half of its land-based drilling rigs, but that hasn't been enough to prop up the energy market as OPEC has stubbornly maintained output levels.
Dramatically lower oil prices are boosting demand. The International Energy Agency just raised its forecast for 2015 world oil demand growth to 1.6 million barrels per day (a 200 thousand bpd increase from its prior forecast), highlighting a "drastic uptick" largely as a result of low prices. But despite demand growing at the fastest rate in five years, the EIA said the global supply overhang is likely to persist well into 2016.
Saudi Arabia has been pumping out about 10.5 million bpd all summer, determined to hold onto market share, even though lower oil revenues have forced the Kingdom to issue new sovereign debt for the first time in eight years. Energy market developments are bound to come up when Saudi King Salman visits the US this month (Sept 4). The official topics of discussion are more political, including regional security in light of Saudi's skirmish with the Houthis in Yemen and the Iran nuclear deal. Some press reports have said that Saudi will look to implement a modest 300 thousand bpd production cut this fall, but based only on the domestic demand environment - it would not be expected to impact export levels.
Some non-Gulf OPEC nations have been pleading with the Saudis to agree to some response to lower oil, and lately there are signs that the pain of low crude prices may be eroding the Saudi hard line. A recent OPEC statement said the cartel would be willing to talk with other producers about steps to get "fair prices," as long as the discussions take place "on a level playing field." That may open the door for an arrangement between Saudi Arabia and Russia, who are fiercely contending over the Chinese oil market (and lately Russia is winning - it surpassed its rival as China's biggest oil supplier in May).
The broader commodities market hasn't been immune to the forces acting on energy. An impending Fed rate hike has created some aversion to investments in dollar denominated commodities. Additionally, the PBoC's decision to devalue its currency added to the downward pressure on raw material prices already felt because of China's gradual economic rebalancing toward less commodity intensive growth.
Cheaper commodities have fed into weak inflation, which has become one of the biggest concerns of global central bankers today, as they desperately work to avoid the fate of Japan, which went through a decade of deflation woes. A Fed paper prepared for the Jackson Hole symposium laid out the risks this way: The risk of of experiencing deflation in US over the next five years increases from zero in short term to about 15%, for Japan, risk remains around 50%, and for the Eurozone, the short-run the risk of deflation is about 5% and it increases to about 20% over the next five years.
Putting aside Japan, Europe may be the most vulnerable to continued commodity weakness pushing down inflation. The Eurozone has been troubled by low inflation for several years and the fear of deflation was enough to inspire the European Central Bank to launch its QE program in March. Given the market events in August, there are now some calls for the ECB to do even more. Analysts at JP Morgan recently wrote that the ECB may consider additional stimulus to offset economic risks arising from emerging market weakness (the same report also suggested the BOJ could take a more aggressive tack in early 2016 if negative core inflation readings crop up). Meanwhile, the IMF said in July that the QE program may need to be extended beyond the presumed end date of September 2016 and that Eurozone inflation won't reach the target level through 2020.
PREDICTIONS: Saudi Arabia has been playing a game of chicken with Russia and with shale oil producers who reacted by getting more efficient. But if crude prices retest recent lows it may be the Saudis that finally blink, as long as they are given some opportunity to save face. However, even if a gentlemen's agreement can be reached amongst producer nations, the massive glut of supply is not going to vanish overnight.
Crude is the canary in the coal mine: if oil prices can't stabilize, the broader commodity market and inflation forecasts will be at risk. The last ten months of lower oil prices have done little to boost global consumer spending, so the current low price environment may be more indicative of a weak economy with tepid demand rather than a harbinger of a business cycle about to blast-off after being refueled by cheap oil. Even during the height of energy demand this summer oil prices could not gain any traction, so as we move into the autumn and demand sees a seasonal decline, there is no fundamental basis for a rebound. The evidence suggests that low inflation will persist for at least the rest of 2015.
The question is whether the drop in energy prices is due to a global economic slowdown in the making or if it's completely supply driven. There are some indications that demand is healthy, and a three-day, 30% snapback rally at the end of August fostered some hope that petroleum futures were bottoming out. Yet it remains to be seen if the lows will be retested, and some energy analysts still foresee WTI crude trading below $30/barrel.
Analysts will have their radar trained on the ECB policy reaction to the threats from weak commodities and the resultant problems in emerging market economies. The ECB is only about a third of the way through pumping more than $1 trillion into the Eurozone economy, but if the flirtation with deflation persists, central bank officials will begin to aggressively jawbone the issue. In the nearer term, weak oil and a slowing China economy, along with a recent rebound in the euro from safe-haven flows could prompt the ECB to revise down its inflation outlook at its next policy meeting (Sept 3). At this point, the notion of more ECB stimulus is a moonshot - not likely to pan out, but a very dramatic moment if it does occur.
Ladies and Gentlemen, We Have Liftoff
The Fed decision in September could be fraught, a damned-if-you-do damned-if-you-don't situation. Liftoff this month could have the markets seeing stars, vexed by the prospect of rates running higher out of step with other global central banks that are still at full throttle on stimulus. On the other hand, if the Fed decides to abort in September it could indicate that the central bank has some indications of economic deterioration that could be bearish.
The August jobs report (Sept 4) is seen as a low hurdle for rate liftoff - only a terrible disappointment would contribute to a no go decision. If the non-farm payrolls come in well above expectations it could help justify rate liftoff this month. However, August is known for producing anomalous jobs data and has missed NFP forecasts for each of the last four years, sometimes by a wide margin.
There are other factors that the Fed will be considering besides the data as it computes the optimal timing for liftoff. At the Jackson Hole symposium a number of FOMC members acknowledged that the recent market turmoil could factor into the decision making process. Fed Vice-Chairman Stanley Fischer encapsulated the sentiment by saying that financial market developments are a concern, though the turmoil could dissipate quickly, and that the committee has two more weeks of data to consider before deciding. To many analysts, Fischer's comments indicated that while rate liftoff is not a sure thing in September, it's probably unrealistic to think that the Fed will push back the first rate hike to next year.
The sudden, steep stock market correction last month, which culminated in a mini 'flash crash' on August 24, may have shaken the confidence of retail investors, but there are still many reasons the Fed could still see a green light for September rate liftoff. Growth data has been solid, most notably the Q2 GDP revision that brought growth in the quarter up to 3.7%, five-tenths higher than expected, on improved consumer and business spending. The labor market has continued to recuperate and consumer confidence readings have been solid. Additionally, many commercial banks, which would benefit from higher interest rates, are lobbying the Fed to get on with it. The Fed may also not want to chance waiting until mid-December when conditions are more illiquid.
The arguments against a move this month start with the concern that even if the US economy can withstand slightly higher rates, the global economy won't be able to handle the g-forces of liftoff (and will end up puking lower). As steward of the emerging markets, the IMF has been warning about this outcome all year. Now some prominent economists, including two at Barclays, have begun to agree that the Fed should wait until 2016. Other voices argue that the Fed "missed the launch window" earlier this year and that recent market volatility makes now too precarious a time for a rate hike.
For the Fed itself, weak inflation is the biggest sticking point. The core PCE price index has edged up only 0.1% month over month for each of the last six months, and in July the year over year figure slipped a tenth to 1.2%. July core CPI undershot expectations, and to cap it off the Q2 employment cost index rose only 0.2%, four-tenths less than forecast and its smallest rise in three decades.
The start of a rate tightening cycle is difficult for businesses: data compiled by Goldman Sachs indicates that in the quarter after the last dozen tightening regimes began, price to earnings ratios contracted an average of 7.2%. S&P analysts have noted that during the six months before or after the first rate hike, the S&P500 index experienced a decline of 5% or more about 80% of the time (in 13 out of 18 cycles since WWII).
That could spell trouble for companies that are already struggling with slow growth, but there are a number of factors that makes this cycle unique. This time around, the Fed is under no pressure to curb unsustainable growth or surging inflation, so it will likely be able to take it very slow. Also, the starting point from the zero bound is unprecedented and bond yields are much lower than in past rate tightening cycles. In the last half dozen cycles the average starting point for the fed funds rate has been around 5% and the 10-year treasury close to 7%. That would support the thesis that this time rising rates will not be enough to wreck the current bull market in stocks, and bond yields will rise gradually with Fed rates and improving growth trends.
If the Fed decides against liftoff in September, a key signal will come from Richmond Fed President Lacker, seen as the leading hawk on the current FOMC but who has thus far voted with the majority to refrain from rate action. In early September, Mr. Lacker plans to give a speech entitled "The Case Against Further Delay", making it abundantly clear that if the Fed stays its hand in September he will register the first dissent of the year, exerting pressure on his colleagues for an October or December move.
PREDICTIONS: The start of a new rate cycle is always the trickiest part, finding the right moment between moving too early and waiting too long. The Fed might be experiencing something akin to the dread astronauts must feel while sitting on the launch pad just before takeoff - confident in their objective but worried about the perilous means of reaching it. A false step at this point could blow up the Fed's credibility.
Though the Fed's first hike in nine years may be challenging for some markets, the underlying reasons for tightening are bullish - a better economy that the Fed believes can handle less accommodation. Some analysts theorize that the Fed may simply want to create some room to maneuver in case negative macro events required some renewed stimulus from the central bank. A couple of 25 basis point hikes this year would give the Fed the ability to cut rates again if things sour in China or elsewhere. So the bar may be very low for rate liftoff, and the Fed's emphasis on the rate path after liftoff may be the proper focus.
If they do act in September, the FOMC could ease the blow by ratcheting back longer run rate projections as they continue to emphasize the new tightening cycle will be very gradual and peak at a lower than usual altitude. And if the bond market doesn't explode on the launch pad, it could dispel a substantial amount of the anxiety regarding mildly tighter Fed policy.
Chances are, however, that by mid-September the FOMC majority will still see conditions as unsatisfactory, and will rely on the caveat of strict "data dependence" to abort rate liftoff. Despite a hawkish slant out of Jackson Hole, fed fund futures haven't gotten back above a 1-in-3 chance of a rate rise this month, meaning a hike now would be a "surprise." Historically September and October are two of the toughest months for stock markets, which might be enough to dissuade the Fed from acting at the next meeting if that pattern holds true. Given the gravity of the decision and with the Fed's credibility at stake, Yellen and her crew will probably wait to see if the skies are sunnier in October or December. They will leave the launch window open for liftoff later this year, but developments in China could further retard the trajectory of any subsequent rate hikes.
CALENDAR (based on ET)
SEPTEMBER
(US Treasury Currency Report, no set date)
1: Euro Zone Unemployment; US ISM Manufacturing PMI
2: US Factory Orders
3: UK Services PMI; ECB Policy Decision and Press Conf; US Trade Balance; US ISM Non-Manufacturing PMI; China markets closed for holiday Sept 3-4
4: German Factory Orders; US Payrolls and Unemployment; G20 Finance Ministers and Central Bank Officials meet in Ankara, Turkey (2-day meeting)
7: Japan Final Q2 GDP
8: China Trade Balance (tentative)
9: UK Manufacturing Production; US JOLTS Jobs Openings; China CPI & PPI
10: BOE Policy Decision
11: US PPI; US Preliminary University of Michigan Confidence
13: China Industrial Production
14: BOJ Policy Statement (tentative)
15: German ZEW Economic Sentiment; UK Inflation Hearings; US Retail Sales; US Industrial Production
16: UK CPI & PPI; Euro Zone Final CPI; US CPI
17: US Housing Starts & Building Permits; US Philly Fed Manufacturing Index; FOMC Policy Decision, Updated Forecast & Press Conference; BOJ Minutes
18: UK Retail Sales
20: Greece snap election
21: US Existing Home Sales; China Caixin Flash Manufacturing PMI
22: Various EU Flash PMI readings
23: German Ifo Business Climate
24: US Durable Goods Orders; US New Home Sales; Tokyo Core CPI
25: US Final Q2 GDP
28: US Personal Income & Spending; US Core PCE; Japan Household Spending
29: US Consumer Confidence
30: UK Final Q2 GDP; Euro Zone Flash CPI; Euro Zone Unemployment; US Chicago PMI; China Manufacturing and Non-Manufacturing PMIs
Wednesday, July 1, 2015
Jul 01 2015
Session Time: Wed Jul 01 00:00:00 2015
[09:20] {dino} gm
01[09:20] {@Threei} dino :)
01[09:23] {@Threei} dino, see dcc please
01[09:32] {@Threei} Short Setup: FB 87 break
01[09:32] {@Threei} If holds .10
01[09:33] {@Threei} 1:1
01[09:33] {@Threei} good luck getting in though
01[09:33] {@Threei} Upside:
01[09:33] {@Threei} -CB +33% (being acquired by ACE for $28.3B)
01[09:33] {@Threei} -TLOG +29% (positive update on MDS clinical program)
01[09:33] {@Threei} -BIOC +17% (launch of FGFR1 amplification testing utilizing a patient's blood sample)
01[09:33] {@Threei} -FREE +13% (Cambria Capital discloses 6.6% passive stake)
01[09:33] {@Threei} -TBIO +11% (announced private placement of 1.2M shares for $3M)
01[09:33] {@Threei} -ACE +9% (acquiring CB for $28.3B)
01[09:33] {@Threei} -AVAV +4.5% (earnings)
01[09:33] {@Threei} -KITE +3.7% (collaboration with Leukemia & Lymphoma Society to enhance the development of KTE-C19)
01[09:33] {@Threei} -STX +3% (no news seen)
01[09:33] {@Threei} -WYNN +2.6% (Macau June casino revenues)
01[09:33] {@Threei} -MGM +2.4% (Macau June casino revenues)
01[09:34] {@Threei} Downside:
01[09:34] {@Threei} -XENE -31% (discloses Phase 2b study of TV-45070)
01[09:34] {@Threei} -BLDP -19% (priced 8.125M share offering at $1.60/shr)
01[09:34] {@Threei} -EXEL -6% (filed mixed security shelf of indeterminate amount)
01[09:34] {@Threei} -MCHX -4% (negative broker commentary)
01[09:35] {@Threei} LOL:
01[09:35] {@Threei} - Eurogroup convenes on Greece most recent proposal and reignites hopes for a compromise; Greece PM Tsipras said to be prepared to accept all bailout conditions
01[09:35] {@Threei} blackmail failed?
[09:37] {dino} in long run, better off defaulting imo
01[09:38] {@Threei} yeah but they are watching polls, as all politians do... and Tsirpas populasrity fell a lot over last week or two
01[09:38] {@Threei} so he is backing down
01[09:39] {@Threei} Long Setup: TWTR .70 break
01[09:39] {@Threei} If holds .60
01[09:42] {@Threei} valid still
[09:50] {dino} thin volumes
01[09:50] {@Threei} and narrow range
[09:51] {nemo} gap and nap until meetings over
[09:51] {dino} cmcm sm l .50
[09:53] {dino} dbvt
01[09:53] {@Threei} 1:1
[09:53] {dino} bwxt drop
[09:54] {dino} bad chart
[09:55] {dino} dbvt sm s ave .68
[09:56] {dino} hooker trader
01[09:57] {@Threei} 1:2
[09:57] {dino} gj
01[09:57] {@Threei} ty
01[09:58] {@Threei} 1:3
01[09:58] {@Threei} out
[09:58] {dino} even better job
01[09:58] {@Threei} :)
01[10:00] {@Threei} *(US) MAY CONSTRUCTION SPENDING M/M: 0.8% V 0.4%E
[10:07] {dino} out cmcm .85, +.35
01[10:08] {@Threei} wtg
02[10:09] * Disconnected
Session Close: Wed Jul 01 10:09:58 2015
Session Start: Wed Jul 01 10:09:58 2015
Session Ident: #discussions
02[10:11] * Attempting to rejoin channel #discussions
03[10:11] * Rejoined channel #discussions
01[10:13] {Threei} internet hiccup
[10:18] {dino} lot of un-true spikes
01[10:18] {Threei} Short Setup: FB .50 break
01[10:18] {Threei} If holds .60
01[10:20] {Threei} no go
01[10:30] {Threei} (GR) Greece PM Tsipras: Referendum is not about whether to stay in the Euro; Greece Govt still in negotiations - National address - Notes received a better offer from creditors after called for referendum, if see better outcome from Eurogroup today will respond immediately
01[10:31] {Threei} FB rinse
[10:33] {dino} cov dbvt .97, +.71
[10:41] {dino} tough crowd
01[10:42] {Threei} lol
01[10:42] {Threei} but it's less than $1
[10:42] {dino} i know, i've let you down
01[10:43] {Threei} we will expect better of you still
[10:43] {dino} added fcx calls w/time
[10:46] {dino} not sure 3i, markets seem to be slowing down
01[10:47] {Threei} yeah
[10:47] {dino} scanners slow
[11:02] {dino} hrzn drop
[11:09] {dino} hum dee dum
[11:10] {dino} this pace keeps up and i will be golfing early today
01[11:10] {Threei} well... not a bad thing I guess
01[11:10] {Threei} Raven, you here?
[11:11] {dino} golfing, never a bad thing
[11:11] {dino} cuba spike
01[11:11] {Threei} Obama speaks about it
[11:11] {Raven} here now
01[11:11] {Threei} ok,
01[11:11] {Threei} we are closing the shop till Sept 1
[11:12] {Raven} good idea
01[11:12] {Threei} so, Aug 25th is the date when we exchange e-mails and coordinate the reopening
[11:12] {dino} slackers
01[11:12] {Threei} we are, aren't we
[11:12] {dino} :)
01[11:13] {Threei} and btw, you qwith your golf is the biggest slacker of all :)
[11:13] {dino} perhaps
[11:13] {Raven} lol
01[11:14] {Threei} now I need to wait for cosmo and nemo to reconnect, to inform them
01[11:44] {Threei} Traders dumped European stocks yesterday after word came that the Greeks made a last-ditch plea for a new bailout and skipped repayment of an IMF payment, but today there were reports that PM Tsipras wrote separately to Greece's main creditors and accepted many of their conditions to extend the now-expired bailout.
01[11:45] {Threei} , Tsipras said that contrary to rumors, the referendum will move forward and reiterated his support for a "no" vote in order to get a "better agreement with lenders."
01[11:45] {Threei} WTI crude has fallen about $1.50 to one-month lows below $58. Note that both sides in the Iran negotiations continue to make very upbeat comments a day after the deadline was extended by a week, to July 7th.
[11:45] {dino} he speaks out of both sides of his mouth
01[11:46] {Threei} if he had third, he would use that too
[11:47] {dino} indeed
01[12:41] {Threei} Short Setup: FB .90 break
01[12:41] {Threei} If holds 87
01[12:44] {Threei} 1:1
[12:59] {dino} gj
01[12:59] {Threei} Long Setup: VXX .73 break
01[12:59] {Threei} If holds .65
01[13:04] {Threei} meh
[13:20] {dino} some buddies called to golf. calling it a day (good one 2 for 2). i guess we'll alk around august 25th. keep me in the loop vad.
01[13:20] {Threei} sounds good
[13:20] {dino} alk=talk
[13:20] {dino} good trading all
01[13:20] {Threei} have fun, and talk to you in two months :)
01[13:21] {Threei} take care guys, have a great summer as they said in school
[13:21] {dino} same to you
02[16:26] * Disconnected
Session Close: Wed Jul 01 16:26:18 2015
Session Start: Wed Jul 01 16:26:18 2015
Session Ident: #discussions
02[16:26] * Attempting to rejoin channel #discussions
03[16:26] * Rejoined channel #discussions
Session Time: Thu Jul 02 00:00:00 2015
01[08:58] {@Threei} cosmo, http://tradinglog.realitytrader.com/2015/07/jul-01-2015.html
[09:09] {cosmo} feeling like an April Fool here
01[09:10] {@Threei} we decided on that yesterday after you left
01[09:10] {@Threei} I actually kept the room open just to let you know
[09:11] {cosmo} k...I'll try to get over it
[09:11] {cosmo} :)
01[09:11] {@Threei} so, look for e-mail around aug 25
[09:12] {dino} gm
01[09:12] {@Threei} dino... creature of habit? :)
[09:12] {dino} just bought house # 30. another foreclosure. this one is sweet
01[09:12] {@Threei} nice
[09:13] {dino} the game never ends
[09:13] {dino} this one should cover son's first year at nc state university
[09:14] {cosmo} wolf pack
[09:15] {dino} indeed
[09:16] {cosmo} beating Duke in BB should be easy next year
[09:17] {dino} lets hope so
[09:17] {cosmo} the good ones went pro this year
[09:18] {dino} yes, they are in a re-building year
[09:20] {cosmo} Maybe Vad still has friends in SD to visit?
01[09:22] {@Threei} I do, but this year they visit me
01[09:23] {@Threei} ok dino, last time and just for you:
01[09:23] {@Threei} Upside:
01[09:23] {@Threei} -XOOM +21% (PayPal to Acquire Xoom for $25/shr cash or $890M enterprise value)
01[09:23] {@Threei} -AGTC +16% (Enters Collaboration Deal with Biogen to Develop Gene Therapies In Ophthalmology)
01[09:23] {@Threei} -HNT +15% (To merge with Centene in transaction valued at $78.57/shr in cash and stock)
01[09:23] {@Threei} -CFMS +8.1% (momentum following IPO)
01[09:23] {@Threei} -PRGS +8.1% (earnings)
01[09:23] {@Threei} -ACRX +7.0% (Journal Publishes review of Phase 3 Trial of Zalviso in post-operative pain)
01[09:23] {@Threei} -RIGL +6.4% (momentum from recent strength attributed to circulation of medical blog report on experimental ovarian cancer treatment)
01[09:23] {@Threei} -BP +4.5% (Confirms settlement value at $18.7B to resolve oil spill claims)
01[09:23] {@Threei} -TSLA +4.0% (Reports quarterly record in Q2 deliveries
01[09:23] {@Threei} Downside:
01[09:23] {@Threei} -FRO -5.0% (Announces all-stock merger agreement with Frontline 2012 Ltd.)
01[09:23] {@Threei} -MNTA -2.1% (UBS downgrade)
01[09:23] {@Threei} -ISCA -2.0% (earnings)
01[09:23] {@Threei} :)
[09:24] {dino} ty
[09:35] {dino} lbtyk and a
01[09:40] {@Threei} folks, if you want, I can keep the room open so you can communicate
[09:40] {dino} ty
[09:41] {cosmo} ...for those of us still in denial :)
01[09:41] {@Threei} I won't be here except for the nick, and occasionally in my electronic flesh... but the room might stay open for you
[09:41] {Raven} addicts need to be here
01[09:41] {@Threei} OK, deal :)
03[09:41] * Retrieving #discussions modes...
[09:41] {dino} lol raven, but can't be helped
[09:41] {Raven} apparently not
01[09:42] {@Threei} I'll let nemo know in case he wants to see you lot
[09:43] {Raven} that will add instability ... excellent
[09:45] {dino} lbtyk sm l .19
[09:47] {dino} stop is .08
[09:50] {dino} stopped
[10:01] {dino} pinc sm l .30 gappy
01[10:01] {@Threei} https://www.facebook.com/VadymGraiferPhotography/posts/864893323590184
[10:03] {dino} gts drop
[10:03] {dino} downgrade
[10:04] {cosmo} how long are those exposures?
01[10:04] {@Threei} various... up to 8 seconds
[10:04] {cosmo} ah
[11:01] {dino} hum bouncing around
[11:27] {dino} vrtx spike
[11:30] {dino} egrx drop, gappy
Tuesday, June 30, 2015
Jun 30 2015
Another good trading session with a few nice juicy trades, again VXX and others
Session Time: Tue Jun 30 00:00:00 2015
[09:07] {RonS} gm
01[09:08] {@Threei} ron :)
[09:29] {cosmo} now don't panic...
01[09:30] {@Threei} Upside:
01[09:30] {@Threei} -JUNO +35% (collaboration deal with CELG)
01[09:30] {@Threei} -WSH +7.5% (Dep CEO Hearn leaving the company)
01[09:30] {@Threei} -KITE +7% (momentum from JUNO/CELG deal)
01[09:30] {@Threei} -LBIO +6.7% (momentum from JUNO/CELG deal - focus on T-cell targeting and TIL differentiation)
01[09:30] {@Threei} -PNR +5.8% (Trian confirmed 7.24% stake)
01[09:30] {@Threei} -FIT +5.5% (Blue Ridge Capital disclosed 8.32% passive stake)
01[09:30] {@Threei} -PBY +5% (announced review of strategic alternatives)
01[09:30] {@Threei} -ALDR +4.4% (positive Mad Money mention)
01[09:30] {@Threei} -FCAU +3.4% (completes syndication of revolving credit facility, increases facility size to €5.0 Billion)
01[09:30] {@Threei} -EMR +3% (announced strategic portfolio repositioning; to spin off network power business)
01[09:30] {@Threei} Downside:
01[09:30] {@Threei} -PIRS -19% (priced 9.09M share offering at $2.75/shr)
01[09:30] {@Threei} -ETRM -14% (pricing of 40.2M units at $0.87/shr)
01[09:30] {@Threei} -APOL -11% (negative broker commentary)
01[09:30] {@Threei} -SNE -5.6% (first public share sale in 26 yrs)
01[09:30] {@Threei} -TW -2.6% (announced all-stock merger with Willis Group valued at $18B)
01[09:31] {@Threei} (GR) Greece said to be requesting a 2 year bailout program via the ESM; Govt would also ask for parallel restructuring of debt - financial press - PM indicates Greece remains at the negotiating tableNote: Earlier (GR) Eurogroup chief Dijsselbloem cancels weekly TV interview, citing "urgent obligations" - press - Separately Greek govt cancels a press briefing, citing ongoing emergency meetings with ministers- Follow up: Germany CDU member Kauder: Surprised that any new proposals would be coming from Brussels, there is nothing new to report on Greece now however
01[09:31] {@Threei} Long Setup: FB .50 break
01[09:32] {@Threei} yeah
01[09:34] {@Threei} Short Setup: JPM .95 break
01[09:34] {@Threei} If holds .05
[09:35] {dino} damn, markets closed friday
01[09:35] {@Threei} how is it bad?
[09:36] {dino} i am missing a lot of days in july
01[09:36] {@Threei} 1:1
01[09:40] {@Threei} 1:2
01[09:42] {@Threei} 1:3
01[09:42] {@Threei} out
01[09:44] {@Threei} *(US) JUN CHICAGO PURCHASING MANAGER: 49.4 V 50.0E
01[09:45] {@Threei} Short Setup: MCD .75 break
01[09:45] {@Threei} If holds .85
[09:45] {nemo} pause day
01[09:46] {@Threei} 1:1
01[09:48] {@Threei} 1:2
01[09:49] {@Threei} Long Setup: AIG .95 break
01[09:49] {@Threei} If holds .85
01[09:52] {@Threei} 1:1
01[09:57] {@Threei} Short Setup: JPM .60 break
01[09:57] {@Threei} If holds .70
[09:59] {dino} late post, wrld smr l .15 wide
01[10:00] {@Threei} *(US) JUN CONSUMER CONFIDENCE INDEX: 101.4 V 97.4E
01[10:00] {@Threei} stop to .65
01[10:02] {@Threei} meh
[10:08] {RonS} safm running like a chicken....
[10:12] {dino} safm sm s .37
[10:19] {RonS} wrld trading volume totally under-reporting
[10:19] {RonS} wrld t&s pure bs
[10:21] {dino} cov safm .94, +.43
[10:21] {dino} ty ron
[10:22] {RonS} np
[10:27] {dino} alrm drop
[10:33] {dino} ago sm s .01
[10:39] {dino} cov ago .61, +.40
01[10:46] {@Threei} Short Setup: FB .10 break
01[10:46] {@Threei} If holds .20
[10:46] {RonS} rumors sandburg going to twtr
01[10:48] {@Threei} TWTR Hearing renewed takeover chatter circulating- Facebook rumored as a potential acquirer with price chatter in the mid-$40s
01[10:48] {@Threei} 1:1
01[10:50] {@Threei} 1:2
[10:54] {dino} nav spike
[10:55] {dino} nav sm s .00
[10:56] {dino} cov nav .70, +.30
[10:57] {RonS} gj
[10:57] {dino} ty
[10:57] {dino} re-spike
[10:58] {dino} gm joint venture rumor
[10:59] {RonS} marijuana shop?
01[10:59] {@Threei} [NAV] Strength attributed to earlier Forbes piece highlighting the company is nearing a partnership with GM (update) Industry sources believe General Motors is close to announcing a new partnership with commercial-truck stalwart Navistar International to manufacture so-called medium-duty trucks that cover the industrys Class 4, 5 and 6 classifications. GM built medium-duty trucks for decades before exiting the business in 2009 amidst its bankruptcy reorganization and the recession. - Forbes
[11:02] {dino} lol ron, just got that
01[11:03] {@Threei} I am slow...
[11:03] {dino} no, wrld is slow
[11:06] {RonS} ...being....forced....to.... dino, that ago trade was like my sex life...
[11:07] {dino} quick?
[11:07] {RonS} pretty good... short into the hole...
[11:08] {dino} tmi
[11:08] {RonS} ya...lol
[11:10] {dino} cpb spike
[11:11] {dino} sm s .15
[11:15] {RonS} hearing cpb hired advisor to review strategic alternatives...
[11:15] {dino} ty
[11:16] {dino} cpb stopped .45, -.30
[11:18] {dino} sm s .00
[11:29] {dino} cov cpb .37, +.63
01[11:36] {@Threei} Long Setup: VXX .30 break
01[11:36] {@Threei} If holds .20
[11:38] {dino} rdus spike
01[11:40] {@Threei} AMGN Hearing vague chatter of an activist investor getting involved- Pershing Square's Ackman said to have built a stake
[11:48] {dino} abcb drop
01[11:50] {@Threei} 1:1
01[11:57] {@Threei} 1:2
01[11:58] {@Threei} 1:3
[12:02] {RonS} nice
01[12:08] {@Threei} good trading days
[12:18] {dino} indeed
[12:19] {RonS} but for this: https://www.youtube.com/watch?v=oKKMdmPBWRk
[12:27] {RonS} syy needs a Pancho...
[12:36] {RonS} oops Poncho: https://en.wikipedia.org/wiki/The_Cisco_Kid_(TV_series)
01[12:36] {@Threei} lol
01[12:36] {@Threei} there is also Sancho Pansa... gets really confusing
[12:38] {RonS} wow vxx
[12:55] {nemo} BABA looks short
[13:08] {RonS} ag stocks nuts over crop acreage report
[13:10] {RonS} anr drop re creditors working w/ advisors for a possible restructuring
01[13:11] {@Threei} Short Setup: POT 31 break
01[13:11] {@Threei} If holds .10
[13:20] {RonS} pfpt spike
[13:23] {RonS} 3i taking dino's cake?
[13:24] {RonS} de 600 day high
01[13:24] {@Threei} pot is dino's cake?
[13:25] {RonS} you found a slower trade than wrld...
01[13:25] {@Threei} ah :)
01[13:25] {@Threei} yeah, trailing to .06
[13:30] {dino} ?
[13:31] {RonS} polls show support for Tsipras falling. His approval rating is just under 50 percent today; two weeks ago, it was more than 60 percent.
[13:32] {dino} shutting the banks down will do that
[13:38] {RonS} CA gets something right? Calif. Gov. Jerry Brown signs new vaccine bill which drops exemptions for personal or religious beliefs
[13:39] {dino} wow a democrat gets it
[13:41] {cosmo} what's wrong with 'personal'?
[13:41] {cosmo} for us libratarians ya know
[13:41] {dino} vaccines work
[13:41] {RonS} free riders that risk the health of innocent children
[13:41] {cosmo} they kill
[13:42] {RonS} the disease kills
[13:42] {cosmo} measels vac for instance
[13:43] {dino} out agio calls from last week, +1.00 /+17%
[13:43] {RonS} gj
[13:43] {dino} ty
[13:46] {RonS} crame tweet pops ambr
[13:46] {RonS} cramer
[14:04] {RonS} call the caterer... Eurogroup are to meet AGAIN tomorrow
01[14:05] {@Threei} lol
01[14:06] {@Threei} Eurogroup internal memo: guys, real danger ahead... Greece case might get closed. We need to prolong this crisis or find a new one.
[14:06] {dino} call the escorts you mean
[14:06] {dino} sure the fench have them lined up
01[14:07] {@Threei} Escorts: no way, we are sick and tired of Eurogroup Greece meetings. Can't you get Spaon or Italy to go into crisis mode?
[14:07] {dino} escorts, "if we have to dance for those cheap greeks again, we quit"
[14:08] {dino} "they want us to run a tab"
[14:08] {RonS} lol
01[14:08] {@Threei} "and then negotiate the ceiling to that tab"
[14:08] {dino} lol
[14:09] {dino} and renegotiate the price after the dance
01[14:11] {@Threei} and call referendum when we question their, umm, position
[14:11] {dino} "last time they left without paying us"
01[14:12] {@Threei} anfd threatened to switch to russian brides
[14:12] {dino} restaurants: "just great, another dine and dash by the greeks"
01[14:13] {@Threei} lol
[14:14] {RonS} dino's kid: how was today dad? just ok...only made 4o cents short on ago when it was up a buck fifteen on the day...
[14:15] {dino} :), but you forget the other wins
[14:18] {RonS} lol...perfect: http://tinyurl.com/owr4hz4
[14:18] {dino} rcap spike
01[14:18] {@Threei} lol
01[14:21] {@Threei} oh god... https://goo.gl/GPx1j3
[14:22] {RonS} Free run off 6.6& cambria stake reported via sc13g
[14:24] {RonS} rcap halt
[14:24] {dino} rcap halt
[14:24] {dino} new terms on loan agreements all i see
01[14:24] {@Threei} (GR) EU official: Greece intends to send a fresh letter with new proposals - press - Eurogroup teleconference ends after one hour. Plans another teleconference tomorrow at 17:00 CET (12:00ET) with efforts to consider Greece proposals.- Finland Fin Min Stubb: an extension of the current Greece bailout program is not possible; Greek request for haircut (debt restructuring) is not possible; request for ESM-programme is always dealt with through "normal procedures."
01[14:25] {@Threei} RCAP RCS Capital and its Lenders Agree to Covenant Modifications (update)
[14:31] {dino} rcap sm s .40 stop hod
[14:33] {dino} cov .10, +.30
[14:35] {dino} out wrld .95 -.20, slowest stock in the world
01[14:37] {@Threei} LOL: "Don't be fooled by looks, butterflies taste just like moths"
01[14:52] {@Threei} Long Setup: VXX .30 break
01[14:53] {@Threei} If holds .20
01[15:00] {@Threei} half out, stop to .24
01[15:04] {@Threei} 1:1
[15:07] {dino} uil drop
[15:09] {dino} news?
[15:09] {RonS} none here
[15:10] {dino} smr l .19
[15:10] {RonS} CT proposes rejection of iberdola/UIL merger...
[15:10] {RonS} ct the state?
[15:13] {dino} out .40, +.21, ty ron for news
[15:13] {RonS} little late but np
[15:17] {dino} i chickened out
01[15:37] {@Threei} Long Setup: VXX .40 break
01[15:37] {@Threei} If holds .30
[15:38] {dino} tw blood
[15:41] {drewj} Hey guys
01[15:41] {@Threei} hi drew
[15:41] {drewj} how are you all doing?
[15:41] {RonS} hi drew
01[15:41] {@Threei} good trading days
[15:41] {drewj} nice
[15:41] {dino} welcome back drew
[15:41] {drewj} big rolls of cash?
[15:41] {drewj} thanks dino, ron
01[15:41] {@Threei} average-sized, lol
[15:41] {dino} grinding it out
[15:42] {drewj} nice vad
[15:42] {dino} you back for awhile?
01[15:42] {@Threei} half out VXX
[15:42] {drewj} hopefully I'll be back soon
01[15:42] {@Threei} stop to .34 for now
[15:42] {drewj} I'm changing jobs dino
[15:42] {dino} hectic then i guess
[15:43] {drewj} Not sure how the whole thing will play out
[15:43] {dino} gl
[15:43] {drewj} Yes, I've got some good options but I need to find the right one
[15:43] {drewj} thanks
[15:44] {drewj} dino i've been studying your strategies
[15:44] {dino} uh oh
[15:44] {drewj} :)
[15:44] {nemo} yeah...really
[15:44] {RonS} dino pm
[15:44] {drewj} I think I'm going to get rich quick
[15:44] {drewj} right?
[15:45] {drewj} Have you planned your vacation Vad?
01[15:46] {@Threei} no... couple things out of my control are not known yet
[15:46] {drewj} ok
[15:47] {drewj} once I get settled I'll be back
[15:47] {dino} "get rich quick" if there were ever words for destruction
[15:48] {drewj} I'm going to invest in the lottery too
[15:48] {dino} roflol
[15:49] {drewj} Ok well take care all...Nice to talk to you guys
[15:49] {drewj} Make some bucks for me
[15:49] {dino} cya drew
[15:50] {dino} jbht drop
01[15:51] {@Threei} OK guys, done for the day. Have a good evening, see youi tomorrow
[15:51] {dino} gn 3i
Session Time: Tue Jun 30 00:00:00 2015
[09:07] {RonS} gm
01[09:08] {@Threei} ron :)
[09:29] {cosmo} now don't panic...
01[09:30] {@Threei} Upside:
01[09:30] {@Threei} -JUNO +35% (collaboration deal with CELG)
01[09:30] {@Threei} -WSH +7.5% (Dep CEO Hearn leaving the company)
01[09:30] {@Threei} -KITE +7% (momentum from JUNO/CELG deal)
01[09:30] {@Threei} -LBIO +6.7% (momentum from JUNO/CELG deal - focus on T-cell targeting and TIL differentiation)
01[09:30] {@Threei} -PNR +5.8% (Trian confirmed 7.24% stake)
01[09:30] {@Threei} -FIT +5.5% (Blue Ridge Capital disclosed 8.32% passive stake)
01[09:30] {@Threei} -PBY +5% (announced review of strategic alternatives)
01[09:30] {@Threei} -ALDR +4.4% (positive Mad Money mention)
01[09:30] {@Threei} -FCAU +3.4% (completes syndication of revolving credit facility, increases facility size to €5.0 Billion)
01[09:30] {@Threei} -EMR +3% (announced strategic portfolio repositioning; to spin off network power business)
01[09:30] {@Threei} Downside:
01[09:30] {@Threei} -PIRS -19% (priced 9.09M share offering at $2.75/shr)
01[09:30] {@Threei} -ETRM -14% (pricing of 40.2M units at $0.87/shr)
01[09:30] {@Threei} -APOL -11% (negative broker commentary)
01[09:30] {@Threei} -SNE -5.6% (first public share sale in 26 yrs)
01[09:30] {@Threei} -TW -2.6% (announced all-stock merger with Willis Group valued at $18B)
01[09:31] {@Threei} (GR) Greece said to be requesting a 2 year bailout program via the ESM; Govt would also ask for parallel restructuring of debt - financial press - PM indicates Greece remains at the negotiating tableNote: Earlier (GR) Eurogroup chief Dijsselbloem cancels weekly TV interview, citing "urgent obligations" - press - Separately Greek govt cancels a press briefing, citing ongoing emergency meetings with ministers- Follow up: Germany CDU member Kauder: Surprised that any new proposals would be coming from Brussels, there is nothing new to report on Greece now however
01[09:31] {@Threei} Long Setup: FB .50 break
01[09:32] {@Threei} yeah
01[09:34] {@Threei} Short Setup: JPM .95 break
01[09:34] {@Threei} If holds .05
[09:35] {dino} damn, markets closed friday
01[09:35] {@Threei} how is it bad?
[09:36] {dino} i am missing a lot of days in july
01[09:36] {@Threei} 1:1
01[09:40] {@Threei} 1:2
01[09:42] {@Threei} 1:3
01[09:42] {@Threei} out
01[09:44] {@Threei} *(US) JUN CHICAGO PURCHASING MANAGER: 49.4 V 50.0E
01[09:45] {@Threei} Short Setup: MCD .75 break
01[09:45] {@Threei} If holds .85
[09:45] {nemo} pause day
01[09:46] {@Threei} 1:1
01[09:48] {@Threei} 1:2
01[09:49] {@Threei} Long Setup: AIG .95 break
01[09:49] {@Threei} If holds .85
01[09:52] {@Threei} 1:1
01[09:57] {@Threei} Short Setup: JPM .60 break
01[09:57] {@Threei} If holds .70
[09:59] {dino} late post, wrld smr l .15 wide
01[10:00] {@Threei} *(US) JUN CONSUMER CONFIDENCE INDEX: 101.4 V 97.4E
01[10:00] {@Threei} stop to .65
01[10:02] {@Threei} meh
[10:08] {RonS} safm running like a chicken....
[10:12] {dino} safm sm s .37
[10:19] {RonS} wrld trading volume totally under-reporting
[10:19] {RonS} wrld t&s pure bs
[10:21] {dino} cov safm .94, +.43
[10:21] {dino} ty ron
[10:22] {RonS} np
[10:27] {dino} alrm drop
[10:33] {dino} ago sm s .01
[10:39] {dino} cov ago .61, +.40
01[10:46] {@Threei} Short Setup: FB .10 break
01[10:46] {@Threei} If holds .20
[10:46] {RonS} rumors sandburg going to twtr
01[10:48] {@Threei} TWTR Hearing renewed takeover chatter circulating- Facebook rumored as a potential acquirer with price chatter in the mid-$40s
01[10:48] {@Threei} 1:1
01[10:50] {@Threei} 1:2
[10:54] {dino} nav spike
[10:55] {dino} nav sm s .00
[10:56] {dino} cov nav .70, +.30
[10:57] {RonS} gj
[10:57] {dino} ty
[10:57] {dino} re-spike
[10:58] {dino} gm joint venture rumor
[10:59] {RonS} marijuana shop?
01[10:59] {@Threei} [NAV] Strength attributed to earlier Forbes piece highlighting the company is nearing a partnership with GM (update) Industry sources believe General Motors is close to announcing a new partnership with commercial-truck stalwart Navistar International to manufacture so-called medium-duty trucks that cover the industrys Class 4, 5 and 6 classifications. GM built medium-duty trucks for decades before exiting the business in 2009 amidst its bankruptcy reorganization and the recession. - Forbes
[11:02] {dino} lol ron, just got that
01[11:03] {@Threei} I am slow...
[11:03] {dino} no, wrld is slow
[11:06] {RonS} ...being....forced....to.... dino, that ago trade was like my sex life...
[11:07] {dino} quick?
[11:07] {RonS} pretty good... short into the hole...
[11:08] {dino} tmi
[11:08] {RonS} ya...lol
[11:10] {dino} cpb spike
[11:11] {dino} sm s .15
[11:15] {RonS} hearing cpb hired advisor to review strategic alternatives...
[11:15] {dino} ty
[11:16] {dino} cpb stopped .45, -.30
[11:18] {dino} sm s .00
[11:29] {dino} cov cpb .37, +.63
01[11:36] {@Threei} Long Setup: VXX .30 break
01[11:36] {@Threei} If holds .20
[11:38] {dino} rdus spike
01[11:40] {@Threei} AMGN Hearing vague chatter of an activist investor getting involved- Pershing Square's Ackman said to have built a stake
[11:48] {dino} abcb drop
01[11:50] {@Threei} 1:1
01[11:57] {@Threei} 1:2
01[11:58] {@Threei} 1:3
[12:02] {RonS} nice
01[12:08] {@Threei} good trading days
[12:18] {dino} indeed
[12:19] {RonS} but for this: https://www.youtube.com/watch?v=oKKMdmPBWRk
[12:27] {RonS} syy needs a Pancho...
[12:36] {RonS} oops Poncho: https://en.wikipedia.org/wiki/The_Cisco_Kid_(TV_series)
01[12:36] {@Threei} lol
01[12:36] {@Threei} there is also Sancho Pansa... gets really confusing
[12:38] {RonS} wow vxx
[12:55] {nemo} BABA looks short
[13:08] {RonS} ag stocks nuts over crop acreage report
[13:10] {RonS} anr drop re creditors working w/ advisors for a possible restructuring
01[13:11] {@Threei} Short Setup: POT 31 break
01[13:11] {@Threei} If holds .10
[13:20] {RonS} pfpt spike
[13:23] {RonS} 3i taking dino's cake?
[13:24] {RonS} de 600 day high
01[13:24] {@Threei} pot is dino's cake?
[13:25] {RonS} you found a slower trade than wrld...
01[13:25] {@Threei} ah :)
01[13:25] {@Threei} yeah, trailing to .06
[13:30] {dino} ?
[13:31] {RonS} polls show support for Tsipras falling. His approval rating is just under 50 percent today; two weeks ago, it was more than 60 percent.
[13:32] {dino} shutting the banks down will do that
[13:38] {RonS} CA gets something right? Calif. Gov. Jerry Brown signs new vaccine bill which drops exemptions for personal or religious beliefs
[13:39] {dino} wow a democrat gets it
[13:41] {cosmo} what's wrong with 'personal'?
[13:41] {cosmo} for us libratarians ya know
[13:41] {dino} vaccines work
[13:41] {RonS} free riders that risk the health of innocent children
[13:41] {cosmo} they kill
[13:42] {RonS} the disease kills
[13:42] {cosmo} measels vac for instance
[13:43] {dino} out agio calls from last week, +1.00 /+17%
[13:43] {RonS} gj
[13:43] {dino} ty
[13:46] {RonS} crame tweet pops ambr
[13:46] {RonS} cramer
[14:04] {RonS} call the caterer... Eurogroup are to meet AGAIN tomorrow
01[14:05] {@Threei} lol
01[14:06] {@Threei} Eurogroup internal memo: guys, real danger ahead... Greece case might get closed. We need to prolong this crisis or find a new one.
[14:06] {dino} call the escorts you mean
[14:06] {dino} sure the fench have them lined up
01[14:07] {@Threei} Escorts: no way, we are sick and tired of Eurogroup Greece meetings. Can't you get Spaon or Italy to go into crisis mode?
[14:07] {dino} escorts, "if we have to dance for those cheap greeks again, we quit"
[14:08] {dino} "they want us to run a tab"
[14:08] {RonS} lol
01[14:08] {@Threei} "and then negotiate the ceiling to that tab"
[14:08] {dino} lol
[14:09] {dino} and renegotiate the price after the dance
01[14:11] {@Threei} and call referendum when we question their, umm, position
[14:11] {dino} "last time they left without paying us"
01[14:12] {@Threei} anfd threatened to switch to russian brides
[14:12] {dino} restaurants: "just great, another dine and dash by the greeks"
01[14:13] {@Threei} lol
[14:14] {RonS} dino's kid: how was today dad? just ok...only made 4o cents short on ago when it was up a buck fifteen on the day...
[14:15] {dino} :), but you forget the other wins
[14:18] {RonS} lol...perfect: http://tinyurl.com/owr4hz4
[14:18] {dino} rcap spike
01[14:18] {@Threei} lol
01[14:21] {@Threei} oh god... https://goo.gl/GPx1j3
[14:22] {RonS} Free run off 6.6& cambria stake reported via sc13g
[14:24] {RonS} rcap halt
[14:24] {dino} rcap halt
[14:24] {dino} new terms on loan agreements all i see
01[14:24] {@Threei} (GR) EU official: Greece intends to send a fresh letter with new proposals - press - Eurogroup teleconference ends after one hour. Plans another teleconference tomorrow at 17:00 CET (12:00ET) with efforts to consider Greece proposals.- Finland Fin Min Stubb: an extension of the current Greece bailout program is not possible; Greek request for haircut (debt restructuring) is not possible; request for ESM-programme is always dealt with through "normal procedures."
01[14:25] {@Threei} RCAP RCS Capital and its Lenders Agree to Covenant Modifications (update)
[14:31] {dino} rcap sm s .40 stop hod
[14:33] {dino} cov .10, +.30
[14:35] {dino} out wrld .95 -.20, slowest stock in the world
01[14:37] {@Threei} LOL: "Don't be fooled by looks, butterflies taste just like moths"
01[14:52] {@Threei} Long Setup: VXX .30 break
01[14:53] {@Threei} If holds .20
01[15:00] {@Threei} half out, stop to .24
01[15:04] {@Threei} 1:1
[15:07] {dino} uil drop
[15:09] {dino} news?
[15:09] {RonS} none here
[15:10] {dino} smr l .19
[15:10] {RonS} CT proposes rejection of iberdola/UIL merger...
[15:10] {RonS} ct the state?
[15:13] {dino} out .40, +.21, ty ron for news
[15:13] {RonS} little late but np
[15:17] {dino} i chickened out
01[15:37] {@Threei} Long Setup: VXX .40 break
01[15:37] {@Threei} If holds .30
[15:38] {dino} tw blood
[15:41] {drewj} Hey guys
01[15:41] {@Threei} hi drew
[15:41] {drewj} how are you all doing?
[15:41] {RonS} hi drew
01[15:41] {@Threei} good trading days
[15:41] {drewj} nice
[15:41] {dino} welcome back drew
[15:41] {drewj} big rolls of cash?
[15:41] {drewj} thanks dino, ron
01[15:41] {@Threei} average-sized, lol
[15:41] {dino} grinding it out
[15:42] {drewj} nice vad
[15:42] {dino} you back for awhile?
01[15:42] {@Threei} half out VXX
[15:42] {drewj} hopefully I'll be back soon
01[15:42] {@Threei} stop to .34 for now
[15:42] {drewj} I'm changing jobs dino
[15:42] {dino} hectic then i guess
[15:43] {drewj} Not sure how the whole thing will play out
[15:43] {dino} gl
[15:43] {drewj} Yes, I've got some good options but I need to find the right one
[15:43] {drewj} thanks
[15:44] {drewj} dino i've been studying your strategies
[15:44] {dino} uh oh
[15:44] {drewj} :)
[15:44] {nemo} yeah...really
[15:44] {RonS} dino pm
[15:44] {drewj} I think I'm going to get rich quick
[15:44] {drewj} right?
[15:45] {drewj} Have you planned your vacation Vad?
01[15:46] {@Threei} no... couple things out of my control are not known yet
[15:46] {drewj} ok
[15:47] {drewj} once I get settled I'll be back
[15:47] {dino} "get rich quick" if there were ever words for destruction
[15:48] {drewj} I'm going to invest in the lottery too
[15:48] {dino} roflol
[15:49] {drewj} Ok well take care all...Nice to talk to you guys
[15:49] {drewj} Make some bucks for me
[15:49] {dino} cya drew
[15:50] {dino} jbht drop
01[15:51] {@Threei} OK guys, done for the day. Have a good evening, see youi tomorrow
[15:51] {dino} gn 3i
Monday, June 29, 2015
Jun 29 2015
Very nice trading session with just one stop and many strong winning trades, ending with cool 1:3 on VXX
Session Time: Mon Jun 29 00:00:00 2015
[08:50] {dino} gm
01[08:51] {@Threei} dino :)
[08:57] {dino} whats with greece, deal not happening?
01[08:57] {@Threei} they called referendum on meeting creditors demands
01[08:58] {@Threei} so, complete unpredictability
[09:04] {RonS} gm
01[09:05] {@Threei} ron :)
01[09:10] {@Threei} - ECB's Nowotny (Austria): Greek situation quite dramatic; hopes referendum leads to a sensible solution. Greece missing June 30th IMF payment did not mean default. Constructive path very limited if Greece voted "NO" in the referendum
01[09:10] {@Threei} - EU's Moscovici reiterated Greece must remain in euro zone; Door was still open for negotiations
01[09:10] {@Threei} - President Obama said to have sent Iran Supreme Leader Khamenei letter before nuclear talks
01[09:11] {@Threei} with dried flower inside?
01[09:19] {@Threei} (GR) Germany Chancellor Merkel: Greece was provided with a generous offer, showed no willingness to compromise - Reiterates deadline for the Greece program is midnight tomorrow, are open to additional talks following the expiration of the program- Are also open to discussions after the Greek referendum on July 5th- Reminder earlier: (GR) EU's Juncker: The eurozone will remain intact; Greece unilaterally broke off negotiations, we wanted a deal; the door remains open for Greece
01[09:20] {@Threei} two more shark attacks near the same beach
[09:23] {dino} outer banks this time
01[09:30] {@Threei} Upside:
01[09:30] {@Threei} -PETX +13% (positive results for AT-002, commercialization expected in '16)
01[09:30] {@Threei} -WYY +5% (entered strategic alliance with Samsung SDS America)
01[09:30] {@Threei} -SYY +1.6% (approved $3B buyback program)
01[09:30] {@Threei} -SRPT +1% (completes NDA submission for FDA for Eteplirsen for the treatment of Duchenne's)
01[09:30] {@Threei} Downside:
01[09:30] {@Threei} -AGO -13% (Puerto Rico debt concerns)
01[09:30] {@Threei} -MBI -10% (Puerto Rico debt concerns)
01[09:30] {@Threei} -BPOP -4.2% (Puerto Rico debt concerns)
01[09:30] {@Threei} -FEYE -3.5% (negative broker commentary)
01[09:30] {@Threei} -CYBR -4.3% (cautious weekend press)
01[09:30] {@Threei} -PBR -3% (long-term plan update; cuts 5-yr investment budget)
01[09:30] {@Threei} -PANW -2.4% (cautious weekend press)
01[09:30] {@Threei} -JUNO -2% (FDA accepted INDA for JCAR017 in relapsed/refractory B cell non-Hodgkin lymphoma)
01[09:30] {@Threei} -AAPL -1.2% (momentum from Cautious Tech Trader in recent Barrons edition)
01[09:36] {@Threei} Short Setup: TWTR .85 break
01[09:36] {@Threei} If holds .90
01[09:39] {@Threei} 1:1
[09:39] {nemo} interesting, not here
01[09:40] {@Threei} Short Setup: FB .20 break
01[09:40] {@Threei} late
[09:41] {dino} out viix calls +.70 / 50%
[09:43] {dino} out dia puts +1.64 / 51%
01[09:44] {@Threei} Long Setup: FB .30 break
01[09:44] {@Threei} If holds .20
01[09:45] {@Threei} 1:1
01[09:46] {@Threei} 1:2
01[09:50] {@Threei} Short Setup: TWTR 35 break
01[09:50] {@Threei} If holds .10
[09:56] {dino} wrld smr l .03
[09:58] {dino} espr smr l ave .25 wide
01[10:00] {@Threei} *(US) MAY PENDING HOME SALES M/M: 0.9% V 1.4%E
[10:04] {nemo} twtr bull flag
01[10:09] {@Threei} stop to .06
[10:09] {dino} out espr .70, +.45
01[10:10] {@Threei} 1:1
01[10:10] {@Threei} wtg
01[10:15] {@Threei} UBER.IPO French police have arrested two Uber executives
[10:18] {dino} out wrld .50, +1.47
[10:19] {RonS} gj
01[10:19] {@Threei} nice one
[10:19] {dino} ty
01[10:20] {@Threei} 1:2
01[10:20] {@Threei} (close enough)
[10:27] {dino} dlph sm ml .00
[10:29] {dino} dlph stopped .74 -.26
01[10:32] {@Threei} 1:3
[10:32] {RonS} many auto suppliers weak... bwa mga...
01[10:32] {@Threei} out
[10:37] {dino} cbt drop
[10:38] {RonS} coals running offf epa lose at scotus
[10:38] {RonS} loss
[10:38] {dino} sm l .69
01[10:39] {@Threei} Short Setup: FB .70 break
01[10:39] {@Threei} If holds .80
01[10:41] {@Threei} Invalidated
[10:41] {dino} cnx spike
01[10:44] {@Threei} US Supreme Court strikes down EPA mercury emission regulations - Supreme Court rules the Obama Administration unlawfully failed to consider costs when deciding to regulate mercury pollution from power plants.- Representatives of the coal and electric power industries attempted to block a strict new federal rule against mercury and other toxic air pollutants.- Vote 5-4 with Scalia writing the majority opinion**NOTE: In making the mercury emission rules the EPA argued that public health was the only criteria to be considered, not the industry cost of compliance, which the agency estimated at nearly $10B annually
[10:46] {dino} out cbt .09, +.40
[11:01] {dino} lod
[11:12] {RonS} dlph silenced...
[11:13] {dino} yeah, strange
[11:15] {RonS} lotsa specialty chem guys whacked...strange w/ oil weakness
[11:18] {RonS} ipgp into a downside volume gap
[11:24] {dino} ipgp gap filled
01[11:29] {@Threei} Long Setup: FB .50 break
01[11:29] {@Threei} If holds .40
01[11:31] {@Threei} Invalidated
01[11:35] {@Threei} Long Setup: FB .40 break
01[11:35] {@Threei} If holds .30
[11:42] {RonS} hearing wsj reporting Gr State pension fund unable to pay 57k pensions tomorrow
[11:44] {RonS} teva strength...some call buying,,,
01[11:45] {@Threei} no go
[11:52] {dino} dlph .80 trig sm l
01[11:53] {@Threei} rinse
01[11:53] {@Threei} With Greece's solvency hanging in the balance, the divide between Greece and its creditors is only worsening. The EU Commission's Juncker accused Greece of unilaterally breaking off negotiations, even as Greek officials accused him of lying about Athens's negotiating positions. Tsipras said he would campaign for a no vote in the referendum, further alienating his European partners.
01[11:55] {@Threei} Recall that Puerto Rico is also having a debt crisis moment of its own. Over the weekend, Puerto Rico Governor Padilla, the country can no longer make payments on its $73 billion in debt.
01[11:56] {@Threei} how come no one wants to lend me 73 billion? I wouldn't make them guess and suffer, I'd default the next minute
01[12:00] {@Threei} back in 40
[12:11] {RonS} abmd gone pulp
[12:13] {RonS} ABMD - United States Department of Justice Closes Investigation Into Abiomed’s Impella 2.5
[12:26] {RonS} hl ncr .46 s/l lod
[12:33] {RonS} hey dino, watching cnbc today?
[12:34] {dino} no
[12:34] {dino} don't have tv in my office, usually just watch from 6-7 am est
[12:36] {RonS} just watch the "halftime report" here... but turned it on this a.m. due to greece and thought mcb looked like she was in heat...
[12:38] {dino} mcb=michelle?
[12:38] {RonS} yep
[12:38] {RonS} mcc...sorry
[12:38] {nemo} Chris Squire died
[12:38] {dino} butter face
[12:39] {dino} = nice body, but her face, so-so
[12:40] {RonS} hey nemo... was he w/ YES? the lead guitar/
[12:40] {nemo} bassist
[12:40] {RonS} ah
[12:40] {nemo} played it like a lead thogh
[12:40] {nemo} though
[12:41] {RonS} ya...some of my favorite riffs on their songs
[12:41] {RonS} dino, started postulating 2 weeks ago that any female on cnbc HAS to have a big nose...
[12:42] {dino} roflol
[12:43] {dino} they had her on an interview for lulu or something. she was in the yoga pants, looked pretty good
[12:45] {RonS} lol... "i am gratigued from this graccident"
01[13:07] {@Threei} Long Setup: IWM .65 break
01[13:07] {@Threei} If holds .60
01[13:08] {@Threei} Invalidated
01[13:15] {@Threei} Long Setup: FB .40 break
01[13:15] {@Threei} If holds .30
01[13:18] {@Threei} 1:1
01[13:21] {@Threei} (GR) Germany Chancellor Merkel reportedly indicated that she and her party would be supportive of a 3rd bailout package for Greece if it returns to talks
01[13:21] {@Threei} hmmm... blackmail works?
01[13:22] {@Threei} (GR) Omega Advisors' Cooperman: See less than 50% chance of a Greece exit; don't see a Greek default as a major market issue - TV interview - Greek economy is a tiny fraction of global economy
01[13:22] {@Threei} idiot
01[13:23] {@Threei} everyone always knew it was tiny, that's not the point
01[13:27] {@Threei} 1:2
[13:36] {dino} gj
01[13:37] {@Threei} ty
[13:39] {RonS} lol... "will Puerto Rico leave the dollar?"
01[13:40] {@Threei} haha
01[13:40] {@Threei} you'd have to kick them out, multiple times
01[13:40] {@Threei} and they'd still grab onto it, kicking and screaming
[13:54] {dino} out wrld .75, +.60
01[13:56] {@Threei} wtg
[13:57] {dino} ty
01[14:04] {@Threei} Long Setup: IWM .50 break
01[14:04] {@Threei} If holds .40
01[14:10] {@Threei} Invalidated
01[14:24] {@Threei} *(GR) S&P LOWERS GREECE SOVEREIGN RATING ONE NOTCH FROM CCC TO CCC- - We interpret Greece's decision to hold a referendum on official creditors' loan proposals as a further indication that the Tsipras government will prioritize domestic politics over financial and economic stability, commercial debt payments, and eurozone membership.- In our view, the probability of Greece exiting the eurozone is now about 50%. - Also, we believe that, absent unanticipated favorable changes in Greece's circumstances, a commercial default is inevitable within the next six months.
[15:16] {dino} wrld smr l .95
01[15:31] {@Threei} Long Setup: VXX .20 break
01[15:31] {@Threei} If holds /10
01[15:32] {@Threei} 1:1
01[15:35] {@Threei} 1:2
01[15:47] {@Threei} 1:3
01[15:47] {@Threei} out
01[15:47] {@Threei} happy with today, very strong day
01[15:48] {@Threei} thank you all, have a good evening, see you tomorrow
[15:48] {dino} gn all
Session Time: Mon Jun 29 00:00:00 2015
[08:50] {dino} gm
01[08:51] {@Threei} dino :)
[08:57] {dino} whats with greece, deal not happening?
01[08:57] {@Threei} they called referendum on meeting creditors demands
01[08:58] {@Threei} so, complete unpredictability
[09:04] {RonS} gm
01[09:05] {@Threei} ron :)
01[09:10] {@Threei} - ECB's Nowotny (Austria): Greek situation quite dramatic; hopes referendum leads to a sensible solution. Greece missing June 30th IMF payment did not mean default. Constructive path very limited if Greece voted "NO" in the referendum
01[09:10] {@Threei} - EU's Moscovici reiterated Greece must remain in euro zone; Door was still open for negotiations
01[09:10] {@Threei} - President Obama said to have sent Iran Supreme Leader Khamenei letter before nuclear talks
01[09:11] {@Threei} with dried flower inside?
01[09:19] {@Threei} (GR) Germany Chancellor Merkel: Greece was provided with a generous offer, showed no willingness to compromise - Reiterates deadline for the Greece program is midnight tomorrow, are open to additional talks following the expiration of the program- Are also open to discussions after the Greek referendum on July 5th- Reminder earlier: (GR) EU's Juncker: The eurozone will remain intact; Greece unilaterally broke off negotiations, we wanted a deal; the door remains open for Greece
01[09:20] {@Threei} two more shark attacks near the same beach
[09:23] {dino} outer banks this time
01[09:30] {@Threei} Upside:
01[09:30] {@Threei} -PETX +13% (positive results for AT-002, commercialization expected in '16)
01[09:30] {@Threei} -WYY +5% (entered strategic alliance with Samsung SDS America)
01[09:30] {@Threei} -SYY +1.6% (approved $3B buyback program)
01[09:30] {@Threei} -SRPT +1% (completes NDA submission for FDA for Eteplirsen for the treatment of Duchenne's)
01[09:30] {@Threei} Downside:
01[09:30] {@Threei} -AGO -13% (Puerto Rico debt concerns)
01[09:30] {@Threei} -MBI -10% (Puerto Rico debt concerns)
01[09:30] {@Threei} -BPOP -4.2% (Puerto Rico debt concerns)
01[09:30] {@Threei} -FEYE -3.5% (negative broker commentary)
01[09:30] {@Threei} -CYBR -4.3% (cautious weekend press)
01[09:30] {@Threei} -PBR -3% (long-term plan update; cuts 5-yr investment budget)
01[09:30] {@Threei} -PANW -2.4% (cautious weekend press)
01[09:30] {@Threei} -JUNO -2% (FDA accepted INDA for JCAR017 in relapsed/refractory B cell non-Hodgkin lymphoma)
01[09:30] {@Threei} -AAPL -1.2% (momentum from Cautious Tech Trader in recent Barrons edition)
01[09:36] {@Threei} Short Setup: TWTR .85 break
01[09:36] {@Threei} If holds .90
01[09:39] {@Threei} 1:1
[09:39] {nemo} interesting, not here
01[09:40] {@Threei} Short Setup: FB .20 break
01[09:40] {@Threei} late
[09:41] {dino} out viix calls +.70 / 50%
[09:43] {dino} out dia puts +1.64 / 51%
01[09:44] {@Threei} Long Setup: FB .30 break
01[09:44] {@Threei} If holds .20
01[09:45] {@Threei} 1:1
01[09:46] {@Threei} 1:2
01[09:50] {@Threei} Short Setup: TWTR 35 break
01[09:50] {@Threei} If holds .10
[09:56] {dino} wrld smr l .03
[09:58] {dino} espr smr l ave .25 wide
01[10:00] {@Threei} *(US) MAY PENDING HOME SALES M/M: 0.9% V 1.4%E
[10:04] {nemo} twtr bull flag
01[10:09] {@Threei} stop to .06
[10:09] {dino} out espr .70, +.45
01[10:10] {@Threei} 1:1
01[10:10] {@Threei} wtg
01[10:15] {@Threei} UBER.IPO French police have arrested two Uber executives
[10:18] {dino} out wrld .50, +1.47
[10:19] {RonS} gj
01[10:19] {@Threei} nice one
[10:19] {dino} ty
01[10:20] {@Threei} 1:2
01[10:20] {@Threei} (close enough)
[10:27] {dino} dlph sm ml .00
[10:29] {dino} dlph stopped .74 -.26
01[10:32] {@Threei} 1:3
[10:32] {RonS} many auto suppliers weak... bwa mga...
01[10:32] {@Threei} out
[10:37] {dino} cbt drop
[10:38] {RonS} coals running offf epa lose at scotus
[10:38] {RonS} loss
[10:38] {dino} sm l .69
01[10:39] {@Threei} Short Setup: FB .70 break
01[10:39] {@Threei} If holds .80
01[10:41] {@Threei} Invalidated
[10:41] {dino} cnx spike
01[10:44] {@Threei} US Supreme Court strikes down EPA mercury emission regulations - Supreme Court rules the Obama Administration unlawfully failed to consider costs when deciding to regulate mercury pollution from power plants.- Representatives of the coal and electric power industries attempted to block a strict new federal rule against mercury and other toxic air pollutants.- Vote 5-4 with Scalia writing the majority opinion**NOTE: In making the mercury emission rules the EPA argued that public health was the only criteria to be considered, not the industry cost of compliance, which the agency estimated at nearly $10B annually
[10:46] {dino} out cbt .09, +.40
[11:01] {dino} lod
[11:12] {RonS} dlph silenced...
[11:13] {dino} yeah, strange
[11:15] {RonS} lotsa specialty chem guys whacked...strange w/ oil weakness
[11:18] {RonS} ipgp into a downside volume gap
[11:24] {dino} ipgp gap filled
01[11:29] {@Threei} Long Setup: FB .50 break
01[11:29] {@Threei} If holds .40
01[11:31] {@Threei} Invalidated
01[11:35] {@Threei} Long Setup: FB .40 break
01[11:35] {@Threei} If holds .30
[11:42] {RonS} hearing wsj reporting Gr State pension fund unable to pay 57k pensions tomorrow
[11:44] {RonS} teva strength...some call buying,,,
01[11:45] {@Threei} no go
[11:52] {dino} dlph .80 trig sm l
01[11:53] {@Threei} rinse
01[11:53] {@Threei} With Greece's solvency hanging in the balance, the divide between Greece and its creditors is only worsening. The EU Commission's Juncker accused Greece of unilaterally breaking off negotiations, even as Greek officials accused him of lying about Athens's negotiating positions. Tsipras said he would campaign for a no vote in the referendum, further alienating his European partners.
01[11:55] {@Threei} Recall that Puerto Rico is also having a debt crisis moment of its own. Over the weekend, Puerto Rico Governor Padilla, the country can no longer make payments on its $73 billion in debt.
01[11:56] {@Threei} how come no one wants to lend me 73 billion? I wouldn't make them guess and suffer, I'd default the next minute
01[12:00] {@Threei} back in 40
[12:11] {RonS} abmd gone pulp
[12:13] {RonS} ABMD - United States Department of Justice Closes Investigation Into Abiomed’s Impella 2.5
[12:26] {RonS} hl ncr .46 s/l lod
[12:33] {RonS} hey dino, watching cnbc today?
[12:34] {dino} no
[12:34] {dino} don't have tv in my office, usually just watch from 6-7 am est
[12:36] {RonS} just watch the "halftime report" here... but turned it on this a.m. due to greece and thought mcb looked like she was in heat...
[12:38] {dino} mcb=michelle?
[12:38] {RonS} yep
[12:38] {RonS} mcc...sorry
[12:38] {nemo} Chris Squire died
[12:38] {dino} butter face
[12:39] {dino} = nice body, but her face, so-so
[12:40] {RonS} hey nemo... was he w/ YES? the lead guitar/
[12:40] {nemo} bassist
[12:40] {RonS} ah
[12:40] {nemo} played it like a lead thogh
[12:40] {nemo} though
[12:41] {RonS} ya...some of my favorite riffs on their songs
[12:41] {RonS} dino, started postulating 2 weeks ago that any female on cnbc HAS to have a big nose...
[12:42] {dino} roflol
[12:43] {dino} they had her on an interview for lulu or something. she was in the yoga pants, looked pretty good
[12:45] {RonS} lol... "i am gratigued from this graccident"
01[13:07] {@Threei} Long Setup: IWM .65 break
01[13:07] {@Threei} If holds .60
01[13:08] {@Threei} Invalidated
01[13:15] {@Threei} Long Setup: FB .40 break
01[13:15] {@Threei} If holds .30
01[13:18] {@Threei} 1:1
01[13:21] {@Threei} (GR) Germany Chancellor Merkel reportedly indicated that she and her party would be supportive of a 3rd bailout package for Greece if it returns to talks
01[13:21] {@Threei} hmmm... blackmail works?
01[13:22] {@Threei} (GR) Omega Advisors' Cooperman: See less than 50% chance of a Greece exit; don't see a Greek default as a major market issue - TV interview - Greek economy is a tiny fraction of global economy
01[13:22] {@Threei} idiot
01[13:23] {@Threei} everyone always knew it was tiny, that's not the point
01[13:27] {@Threei} 1:2
[13:36] {dino} gj
01[13:37] {@Threei} ty
[13:39] {RonS} lol... "will Puerto Rico leave the dollar?"
01[13:40] {@Threei} haha
01[13:40] {@Threei} you'd have to kick them out, multiple times
01[13:40] {@Threei} and they'd still grab onto it, kicking and screaming
[13:54] {dino} out wrld .75, +.60
01[13:56] {@Threei} wtg
[13:57] {dino} ty
01[14:04] {@Threei} Long Setup: IWM .50 break
01[14:04] {@Threei} If holds .40
01[14:10] {@Threei} Invalidated
01[14:24] {@Threei} *(GR) S&P LOWERS GREECE SOVEREIGN RATING ONE NOTCH FROM CCC TO CCC- - We interpret Greece's decision to hold a referendum on official creditors' loan proposals as a further indication that the Tsipras government will prioritize domestic politics over financial and economic stability, commercial debt payments, and eurozone membership.- In our view, the probability of Greece exiting the eurozone is now about 50%. - Also, we believe that, absent unanticipated favorable changes in Greece's circumstances, a commercial default is inevitable within the next six months.
[15:16] {dino} wrld smr l .95
01[15:31] {@Threei} Long Setup: VXX .20 break
01[15:31] {@Threei} If holds /10
01[15:32] {@Threei} 1:1
01[15:35] {@Threei} 1:2
01[15:47] {@Threei} 1:3
01[15:47] {@Threei} out
01[15:47] {@Threei} happy with today, very strong day
01[15:48] {@Threei} thank you all, have a good evening, see you tomorrow
[15:48] {dino} gn all
Friday, June 26, 2015
Market Week Wrap-up
TradeTheNews.com Weekly
Market Update: Greek Standoff Continues Greece, Supreme Court Upholds Obamacare
Fri, 26 Jun 2015 16:04 PM EST
Another week passed without resolution of the Greek situation, which continues to be the central drama in global markets. Bond markets remained remarkably calm despite the standoff with Athens, and Friday's session saw US Treasury and German Bund sellers push yields back up towards recent highs. Generally positive US economic data along with Fed commentary supported the notion the FOMC will be able to move on rates later this year. The US Dollar index gained more than 1.5% on the week while the EUR/USD finished just above the 1.1143 50-day moving average for the first time in nearly one month. US equities moved lower after last week's gains, while European stocks were very choppy on the continuing game of Greece headline roulette. The Shanghai Composite lost another 10.5% this week, putting it about 19% off its most recent high. For the week, the DJIA lost 0.4%, the S&P500 dropped 0.4% and the Nasdaq fell 0.7%.
On Monday, markets reacted exuberantly to reports the Europeans had made a breakthrough that could lead to a last-minute deal with Athens, sending the CAC and the DAX up over 3% each on the day. The Greeks apparently offered concessions to gradually move the retirement age to 67 and increase VAT taxes on certain items, in exchange for an extension of the current bailout and a possible third bailout. Like many prior breakthroughs, it didn't last. By Wednesday, the Greeks were saying the Europeans had rejected their concessions while the Europeans said the Greeks had rejected their offers. Meanwhile, the ECB twice hiked ELA funding for Greece early in the week (making four increases in the last week and a half), to a total of approximately €89B, but notably held off from raising the facility in the latter half of the week as negotiations soured. Hard negotiations led to hard feelings and both sides invoked the word "blackmail" to describe the others' demands. German Chancellor Merkel is said to have told colleagues that this weekend was the final chance for Greece, with a deal required before the market opened next Monday. Other European officials, including the Eurogroup chief Dijsselbloem were more upbeat, still seeing a deal possibly coming together at the meeting of financial ministers scheduled for Saturday afternoon.
European June flash PMI data provided more evidence of the accelerating recovery on the Continent. The Markit Eurozone manufacturing PMI hit rose slightly to 52.5, its highest level in 14 months, while the composite PMI, which covers both services and manufacturing, came in a 49-month high. Based on its survey, Markit expects Q2 Eurozone around +0.4%, equal to Q1 GDP. The German and French flash PMIs both saw improvements, with the composite index for France expanding to 53.4 against May's 52.0, and the composite index for Germany rose to 54.0 from 52.6 in May.
The third and final reading of US Q1 GDP saw a decent upward revision but still left the figure in contraction territory. The advance reading was +0.2%, the preliminary figure was -0.7% and the final number out on Wednesday was -0.2% (the year ago final figure was -2.1%). With Q1 in the can, the May PCE and durables reports provided color on the progress of Q2. Core PCE - the Fed's preferred measure of inflation - was +1.2%, right in line with expectations and the April reading, but still well short of the Fed's 2.0% target. The real bright spot was the personal spending component, which saw its biggest gain since August 2009. The May durable goods report was mixed, with the headline reading a bit worse than the revised April figure (-1.8% v -1.5% m/m), dragged lower by more weak aircraft orders. Ex-transports, the May figure was up slightly m/m, while the core capital goods component returned to growth (+0.4% v -0.3% m/m).
Moderate Fed Governor Powell acknowledged the Q1 slowdown in the US economy even as there are more recent signs of wage increases in the labor market. According to Powell, rate hike conditions could be satisfied as soon as September, making for a 50/50 chance of a rate hike as soon as September. He said markets are starting to bake in a path of gradual rate hikes, making it less important to focus intently on when rate liftoff occurs.
May US home sales were very strong, bouncing higher from the somewhat mixed April data. Existing home sales rose to 5.35M, topping the previous cycle high of 5.31M seen in July 2013, just prior to the taper tantrum decline. New home sales were even stronger, rising to their highest rate since February 2008. Note that the supply of new homes was unchanged at 206K and remains less than half of what it was at the height of the housing boom. Homebuilder Lennar reported second-quarter results on Wednesday, disclosing orders, deliveries and a backlog that were up by double-digit percentages.
Obamacare survived a major challenge as the US Supreme Court ruled 6-3 to uphold disputed subsidies language in the King v. Burwell case. Chief Justice John Roberts authored the majority opinion, writing "A fair reading of legislation demands a fair understanding of the legislative plan." The majority decision stated that the broader "context and structure" of the act intended to allow tax credits under any exchange created by the law, whether state or federal. Hospital and managed care stocks surged on the ruling, many rising over 10%.
The same stocks got another boost as the merger waltz moved on to the healthcare industry. Cigna received and rejected a $47 billion takeover offer from Anthem, valued at $184/share, an 18% premium to the firm's prior closing price. Cigna called the bid "inadequate" and said it was skewed heavily in favor of Anthem shareholders. There were press reports that Aetna was nearing a deal to acquire Humana in cash-and-stock deal. Shares of animal healthcare specialist Zoetis went on a rollercoaster ride after a press report said that it was approached by Valeant, which was subsequently shot down by CNBC saying that Valeant was not likely to pursue a deal. Elsewhere, Potash offered to acquire German fertilizer firm K+S, although there were no concrete details disclosed by the firms about terms. Press reports suggested K+S thought Potash's offer in excess of €40/share was too low.
IAC/InterActiveCorp said it was planning an IPO of its Match.com unit, which also includes popular dating service Tinder. The new group will sell less than 20% of the company in the transaction, which is expected to be completed in the fourth quarter. Netflix shares reached new all-time highs after declaring a 7 for 1 stock split, but then hit some static after Carl Icahn announced he had liquidated the remainder of his shares, netting a $1.6B profit.
The swoon in China markets continued with another outsized 7.4% Friday decline, taking Shanghai Composite down over 6% for the week to a 6-week low. The index is now down nearly 20% from its peak. The active IPO pipeline remains a popular culprit among analysts, with another 28 listings this week estimated to freeze up some CNY1.5T in investment funds. Incoming economic data hardly offered much relief, as the HSBC flash manufacturing PMI implied a fourth straight month of contraction amid more rapidly deteriorating employment conditions. The PBoC made a feeble attempt to stem the tide, resuming reverse repo liquidity injections through open market operations for the first time in nine weeks with a CNY35B repurchase. The annual round of US-China Strategic and Economic Dialogue negotiations also concluded this week with a promise by Beijing to limit FX interventions to instances "necessitated by disorderly market conditions", as opposed to last year's much more vague pledge to reduce interventions "as conditions permit".
In contrast, Japan investors continued to cheer policymakers' commitment to open-ended QQE, sending Nikkei225 to an 18-year high near 21,000 level. The rally is particularly impressive considering that USD/JPY has spent its second straight week trapped in ¥122.50-124.50 range in spite of a steady rise in US rates. Servings of Japan economic data also appeared benign to outright "goldilocks" - unemployment rate held at a multi-year low of 3.3%, household spending rose by much higher than expected 4.8%, while inflation further justified a united BOJ front at a 2-year low of 0.5%. Japan's quarterly Tankan figures, along with wage inflation and retail spending data, are on tap for next week.
Fri, 26 Jun 2015 16:04 PM EST
Another week passed without resolution of the Greek situation, which continues to be the central drama in global markets. Bond markets remained remarkably calm despite the standoff with Athens, and Friday's session saw US Treasury and German Bund sellers push yields back up towards recent highs. Generally positive US economic data along with Fed commentary supported the notion the FOMC will be able to move on rates later this year. The US Dollar index gained more than 1.5% on the week while the EUR/USD finished just above the 1.1143 50-day moving average for the first time in nearly one month. US equities moved lower after last week's gains, while European stocks were very choppy on the continuing game of Greece headline roulette. The Shanghai Composite lost another 10.5% this week, putting it about 19% off its most recent high. For the week, the DJIA lost 0.4%, the S&P500 dropped 0.4% and the Nasdaq fell 0.7%.
On Monday, markets reacted exuberantly to reports the Europeans had made a breakthrough that could lead to a last-minute deal with Athens, sending the CAC and the DAX up over 3% each on the day. The Greeks apparently offered concessions to gradually move the retirement age to 67 and increase VAT taxes on certain items, in exchange for an extension of the current bailout and a possible third bailout. Like many prior breakthroughs, it didn't last. By Wednesday, the Greeks were saying the Europeans had rejected their concessions while the Europeans said the Greeks had rejected their offers. Meanwhile, the ECB twice hiked ELA funding for Greece early in the week (making four increases in the last week and a half), to a total of approximately €89B, but notably held off from raising the facility in the latter half of the week as negotiations soured. Hard negotiations led to hard feelings and both sides invoked the word "blackmail" to describe the others' demands. German Chancellor Merkel is said to have told colleagues that this weekend was the final chance for Greece, with a deal required before the market opened next Monday. Other European officials, including the Eurogroup chief Dijsselbloem were more upbeat, still seeing a deal possibly coming together at the meeting of financial ministers scheduled for Saturday afternoon.
European June flash PMI data provided more evidence of the accelerating recovery on the Continent. The Markit Eurozone manufacturing PMI hit rose slightly to 52.5, its highest level in 14 months, while the composite PMI, which covers both services and manufacturing, came in a 49-month high. Based on its survey, Markit expects Q2 Eurozone around +0.4%, equal to Q1 GDP. The German and French flash PMIs both saw improvements, with the composite index for France expanding to 53.4 against May's 52.0, and the composite index for Germany rose to 54.0 from 52.6 in May.
The third and final reading of US Q1 GDP saw a decent upward revision but still left the figure in contraction territory. The advance reading was +0.2%, the preliminary figure was -0.7% and the final number out on Wednesday was -0.2% (the year ago final figure was -2.1%). With Q1 in the can, the May PCE and durables reports provided color on the progress of Q2. Core PCE - the Fed's preferred measure of inflation - was +1.2%, right in line with expectations and the April reading, but still well short of the Fed's 2.0% target. The real bright spot was the personal spending component, which saw its biggest gain since August 2009. The May durable goods report was mixed, with the headline reading a bit worse than the revised April figure (-1.8% v -1.5% m/m), dragged lower by more weak aircraft orders. Ex-transports, the May figure was up slightly m/m, while the core capital goods component returned to growth (+0.4% v -0.3% m/m).
Moderate Fed Governor Powell acknowledged the Q1 slowdown in the US economy even as there are more recent signs of wage increases in the labor market. According to Powell, rate hike conditions could be satisfied as soon as September, making for a 50/50 chance of a rate hike as soon as September. He said markets are starting to bake in a path of gradual rate hikes, making it less important to focus intently on when rate liftoff occurs.
May US home sales were very strong, bouncing higher from the somewhat mixed April data. Existing home sales rose to 5.35M, topping the previous cycle high of 5.31M seen in July 2013, just prior to the taper tantrum decline. New home sales were even stronger, rising to their highest rate since February 2008. Note that the supply of new homes was unchanged at 206K and remains less than half of what it was at the height of the housing boom. Homebuilder Lennar reported second-quarter results on Wednesday, disclosing orders, deliveries and a backlog that were up by double-digit percentages.
Obamacare survived a major challenge as the US Supreme Court ruled 6-3 to uphold disputed subsidies language in the King v. Burwell case. Chief Justice John Roberts authored the majority opinion, writing "A fair reading of legislation demands a fair understanding of the legislative plan." The majority decision stated that the broader "context and structure" of the act intended to allow tax credits under any exchange created by the law, whether state or federal. Hospital and managed care stocks surged on the ruling, many rising over 10%.
The same stocks got another boost as the merger waltz moved on to the healthcare industry. Cigna received and rejected a $47 billion takeover offer from Anthem, valued at $184/share, an 18% premium to the firm's prior closing price. Cigna called the bid "inadequate" and said it was skewed heavily in favor of Anthem shareholders. There were press reports that Aetna was nearing a deal to acquire Humana in cash-and-stock deal. Shares of animal healthcare specialist Zoetis went on a rollercoaster ride after a press report said that it was approached by Valeant, which was subsequently shot down by CNBC saying that Valeant was not likely to pursue a deal. Elsewhere, Potash offered to acquire German fertilizer firm K+S, although there were no concrete details disclosed by the firms about terms. Press reports suggested K+S thought Potash's offer in excess of €40/share was too low.
IAC/InterActiveCorp said it was planning an IPO of its Match.com unit, which also includes popular dating service Tinder. The new group will sell less than 20% of the company in the transaction, which is expected to be completed in the fourth quarter. Netflix shares reached new all-time highs after declaring a 7 for 1 stock split, but then hit some static after Carl Icahn announced he had liquidated the remainder of his shares, netting a $1.6B profit.
The swoon in China markets continued with another outsized 7.4% Friday decline, taking Shanghai Composite down over 6% for the week to a 6-week low. The index is now down nearly 20% from its peak. The active IPO pipeline remains a popular culprit among analysts, with another 28 listings this week estimated to freeze up some CNY1.5T in investment funds. Incoming economic data hardly offered much relief, as the HSBC flash manufacturing PMI implied a fourth straight month of contraction amid more rapidly deteriorating employment conditions. The PBoC made a feeble attempt to stem the tide, resuming reverse repo liquidity injections through open market operations for the first time in nine weeks with a CNY35B repurchase. The annual round of US-China Strategic and Economic Dialogue negotiations also concluded this week with a promise by Beijing to limit FX interventions to instances "necessitated by disorderly market conditions", as opposed to last year's much more vague pledge to reduce interventions "as conditions permit".
In contrast, Japan investors continued to cheer policymakers' commitment to open-ended QQE, sending Nikkei225 to an 18-year high near 21,000 level. The rally is particularly impressive considering that USD/JPY has spent its second straight week trapped in ¥122.50-124.50 range in spite of a steady rise in US rates. Servings of Japan economic data also appeared benign to outright "goldilocks" - unemployment rate held at a multi-year low of 3.3%, household spending rose by much higher than expected 4.8%, while inflation further justified a united BOJ front at a 2-year low of 0.5%. Japan's quarterly Tankan figures, along with wage inflation and retail spending data, are on tap for next week.
Jun 27 2015
With the week that slow, Friday promised to be even slower, and delivered on the promise. Finished 1 hour earlier, incapable of coping with all the excitement of watching paint drying. Good week overall though.
Session Time: Fri Jun 26 00:00:00 2015
[09:03] {RonS} gm
01[09:04] {@Threei} ron :)
01[09:04] {@Threei} how's computer?
[09:06] {RonS} yesterday had a full blown crash w/ blue screen of death
[09:07] {RonS} thinking these video ads that twitter and finviz have started are screwing with things
01[09:07] {@Threei} didn't repeat?
[09:08] {RonS} somehow the mirc program changed... the formatting is now different
01[09:08] {@Threei} huh
[09:10] {RonS} before could adjust the vertical height of this board and the text would adjust, now it doesn't
[09:10] {RonS} could reduce the size, now cannot
01[09:11] {@Threei} that's really weird
[09:14] {RonS} hmmm, played with it and now ok...confirming the fact that i am an idiot
01[09:15] {@Threei} when it comes to AI, who of us isn't
[09:17] {RonS} my 2 yr old grandaughter?... one time got a hold of daughter's cell phone and called China...
01[09:18] {@Threei} lol
01[09:18] {@Threei} actually, yes... saw a 2 years old figuring out the drag-and-drop game on the phone in seconds
[09:18] {dino} gm
01[09:19] {@Threei} but the funniest thing happened next day
01[09:19] {@Threei} dino :)
01[09:19] {@Threei} his mother on the work, gets e-mail from google play store thanking her for game purchase
[09:20] {RonS} lol
01[09:20] {@Threei} she checks her phone and realizes she left it home
01[09:20] {@Threei} couple days before she was showing him a game, he liked it sho she bought it
01[09:20] {@Threei} guy watched her hitting sequence of the buttons, about 5 steps
01[09:21] {@Threei} that was enough... woke up, found her phone, turned it on and started playing... when trial end came up on the screen, he reproduced her steps to buy the game
01[09:22] {@Threei} http://www.arrestinglight.com/blog/2015/6/world-through-the-fish-eyes
01[09:24] {@Threei} Upside:
01[09:24] {@Threei} -CNCE +13% (no news)
01[09:24] {@Threei} -CUR +11% (preclinical data on Neuralstem's genetically modified HK532-IGF-1 stem cells in Alzheimer's Disease)
01[09:24] {@Threei} -FINL +6.5% (earnings)
01[09:24] {@Threei} -NKE +3.2% (earnings)
01[09:24] {@Threei} -VRTX +2.5% (CNBC biotech analysts gives ORKAMBI 90% approval chance ahead of upcoming FDA decision)
01[09:24] {@Threei} Downside:
01[09:24] {@Threei} -CLDN -43% (suspending R&D, will cut more jobs)
01[09:24] {@Threei} -RGSE -17.5% (priced $5M offering)
01[09:24] {@Threei} -MU -15% (earnings)
01[09:24] {@Threei} -SNX -9% (earnings)
01[09:24] {@Threei} -ALDR -2.8% (planning to initiate second multi-dose trial in chronic migraine patients)
01[09:24] {@Threei} -ZTS -1.8% (after Valeant rumored to have made offer for the company; negative broker commentary)
[09:24] {RonS} very nice... very evident through the lighting you capture that your area has some of the best air quality in the world...
01[09:25] {@Threei} :)
[09:26] {RonS} ...as long as you don't get Japanese radiation... :)
[09:29] {dino} whats w/china dropping 8%
01[09:35] {@Threei} Long Setup: FB .90 break
01[09:35] {@Threei} If holds .80
01[09:36] {@Threei} Invalidated
[09:36] {nemo} look at hourly, probably a short today
01[09:37] {@Threei} well, I need a vounce or consolidation for short
[09:37] {nemo} yesh, this likely spot
01[09:38] {@Threei} Long Setup: FB .40 break
01[09:38] {@Threei} If holds .30
01[09:39] {@Threei} stubborn
01[09:40] {@Threei} no go
01[09:43] {@Threei} rinse
01[09:44] {@Threei} grrr
[09:45] {dino} wrld smr l ave .89
01[09:47] {@Threei} Short Setup: AIG .65 break
01[09:47] {@Threei} If holds .75
01[09:52] {@Threei} change to .70 break
01[09:52] {@Threei} If holds .80
01[09:55] {@Threei} no go
01[10:00] {@Threei} *(US) JUN FINAL UNIVERSITY OF MICHIGAN CONFIDENCE: 96.1 V 94.6E
[10:02] {RonS} ko for mnst talk
01[10:06] {@Threei} Long Setup: JPM .20 break
[10:22] {RonS} wow...Greece rejects 5 mo extension...
[10:22] {nemo} source please?
[10:23] {RonS} picked up from almalgamator so not specified...
[10:23] {dino} cramer saying greeces offer was forgive additional 200 billion
[10:23] {RonS} these guys have some balls...
[10:24] {RonS} source ANA but do not know who or what that is...
01[10:24] {@Threei} nothing on wire yet
01[10:24] {@Threei} expect denial in the next 5 min :)
[10:24] {RonS} lol
[10:25] {RonS} w/ a re-scheduled meeting of course
[10:28] {dino} and dinner and a showe
[10:33] {RonS} psx puts being bot...sure wish the algo was around...earlier big cvx, xom, cop calls bot
[10:34] {nemo} yeah, me 2
01[10:39] {@Threei} bo single word on Greece on the wire
01[10:39] {@Threei} no
01[10:39] {@Threei} must be some misunderstanding
01[10:39] {@Threei} Short Setup: TWTR .80 break
01[10:40] {@Threei} If holds .90
01[10:40] {@Threei} crap... had FB .20 short in mind, missed alert
[10:43] {dino} sage drop
01[10:45] {@Threei} 1:1
01[11:18] {@Threei} Bonds are selling off this morning as the bickering between Greece and its creditors deepens and the final deadline approaches. Reports suggest that the creditors still will not accept Greece's VAT and pension proposals, while Greece has rejected a five-month, €15.5B bailout extension instead of a comprehensive settlement.
01[11:18] {@Threei} Crude broke to its lowest level since early June, with WTI dropping briefly below $59 in the wake of news that the P5+1 powers are offering more concessions to Iran in a final push for a nuclear deal. The Western officials engages in talks have made upbeat comments even in the face of the Iranians nixing any inspections of military sites as part of a deal.
[11:19] {dino} idiots
01[11:20] {@Threei} negotiations with Iran might have turned in the same thing as Greece... full time job for some
01[11:20] {@Threei} only Greece offers better destinations
[11:20] {dino} lol
01[11:21] {@Threei} so those assigned to Iran case are jealous
01[11:21] {@Threei} and intend to extend it, with meetings in better locations than Teheran
[11:23] {dino} agio smr l .50
01[11:43] {@Threei} Long Setup: FB .50 break
01[11:43] {@Threei} If holds .40
01[11:46] {@Threei} 1:1
01[11:46] {@Threei} Google’s Latest Self-Driving Car Prototypes Are Now On Mountain View Streets
01[11:46] {@Threei} 1:2
[11:58] {dino} wrld smr l .05
[12:03] {RonS} wrld needs more acceptance...
[12:06] {RonS} Mountain View is about 1/2 mile wide...if they were actually running they would be somewhere else...
01[12:06] {@Threei} lol
01[12:07] {@Threei} one of oli companies working in Alberta recently announced purchase of 100 driverless trucks
[12:09] {RonS} jesus, wrld has a 48% short interest...can't we get a cover run?
[12:10] {RonS} midgets, dwarfs? = short wrld?
[12:10] {RonS} or dino's buddies...leprechans...
01[12:11] {@Threei} gremlins?
01[12:11] {@Threei} banshies?
[12:14] {dino} keep talking ron, its helping
01[12:41] {@Threei} Short Setup: FB .78 break
01[12:41] {@Threei} If holds .85
01[12:44] {@Threei} 1:1
01[12:57] {@Threei} 1:2
01[13:10] {@Threei} (GR) Greece PM Tsipras reportedly confirms cabinet meeting for tonight to discuss bailout deal
01[13:11] {@Threei} {Cabinet}: Can we have a meeting in Ireland?
01[13:11] {@Threei} oh man...
01[13:12] {@Threei} [HLF] Pershing Square releases letter to CEO concerning earlier NY post piece - We urge that you release the 71-minute video and any similar materials in your possession or control, and we encourage Herbalife employees, distributors and others with similar materials to come forward.- You are quoted admitting that participation in Herbalife is a lottery ticket and that some distributors have made false promises, claims, in hopes for product, for money, for recruiting, for customers, for pyramiding.
01[13:12] {@Threei} Ackan grabs for any straw
01[13:12] {@Threei} ackman
[13:21] {RonS} guess nemo is right...
01[13:21] {@Threei} about what?
[13:21] {RonS} ...the wrld sucks
01[13:21] {@Threei} ah
01[13:21] {@Threei} he most certainly is
[13:21] {nemo} life is war
[13:21] {dino} lol
01[13:23] {@Threei} come on nemo, find some tree and hug it
01[13:23] {@Threei} and I don't mean some flesh-eating tropical variety
01[13:25] {@Threei} Long Setup: TWTR .85 break
01[13:25] {@Threei} If holds .75
[13:30] {dino} out agio .93, +.43
[13:30] {dino} calling it a week, take car all
[13:30] {dino} care
01[13:31] {@Threei} have a good weekend
[13:31] {nemo} P&Q
[13:33] {dino} 'ty
01[13:47] {@Threei} half out
01[13:47] {@Threei} stop to .79
01[13:53] {@Threei} to .84
01[14:02] {@Threei} be back in 40
01[14:44] {@Threei} Short Setup: JPM .85 break
01[14:44] {@Threei} If holds .95
[14:54] {RonS} this could last until the close...
01[14:54] {@Threei} or next week open...
[14:55] {RonS} ...set a record for a holding period?
01[14:55] {@Threei} need something to brag about
01[14:55] {@Threei} Associated Press: Putin says Russia is going to spend $400 billion upgrading its military
01[14:55] {@Threei} imbecile walks right into the trap of his own making
01[14:56] {@Threei} arm race broke USSR
01[14:56] {@Threei} start a new one, idiot
01[14:56] {@Threei} as good as he is as a tactic, strategist he is not
[15:05] {RonS} oops
01[15:05] {@Threei} yeah
01[15:05] {@Threei} no news for this spike yet
[15:06] {RonS} think will call it a day... have a good weekend 3i
01[15:06] {@Threei} you too
01[15:06] {@Threei} see you monday guys
Session Time: Fri Jun 26 00:00:00 2015
[09:03] {RonS} gm
01[09:04] {@Threei} ron :)
01[09:04] {@Threei} how's computer?
[09:06] {RonS} yesterday had a full blown crash w/ blue screen of death
[09:07] {RonS} thinking these video ads that twitter and finviz have started are screwing with things
01[09:07] {@Threei} didn't repeat?
[09:08] {RonS} somehow the mirc program changed... the formatting is now different
01[09:08] {@Threei} huh
[09:10] {RonS} before could adjust the vertical height of this board and the text would adjust, now it doesn't
[09:10] {RonS} could reduce the size, now cannot
01[09:11] {@Threei} that's really weird
[09:14] {RonS} hmmm, played with it and now ok...confirming the fact that i am an idiot
01[09:15] {@Threei} when it comes to AI, who of us isn't
[09:17] {RonS} my 2 yr old grandaughter?... one time got a hold of daughter's cell phone and called China...
01[09:18] {@Threei} lol
01[09:18] {@Threei} actually, yes... saw a 2 years old figuring out the drag-and-drop game on the phone in seconds
[09:18] {dino} gm
01[09:19] {@Threei} but the funniest thing happened next day
01[09:19] {@Threei} dino :)
01[09:19] {@Threei} his mother on the work, gets e-mail from google play store thanking her for game purchase
[09:20] {RonS} lol
01[09:20] {@Threei} she checks her phone and realizes she left it home
01[09:20] {@Threei} couple days before she was showing him a game, he liked it sho she bought it
01[09:20] {@Threei} guy watched her hitting sequence of the buttons, about 5 steps
01[09:21] {@Threei} that was enough... woke up, found her phone, turned it on and started playing... when trial end came up on the screen, he reproduced her steps to buy the game
01[09:22] {@Threei} http://www.arrestinglight.com/blog/2015/6/world-through-the-fish-eyes
01[09:24] {@Threei} Upside:
01[09:24] {@Threei} -CNCE +13% (no news)
01[09:24] {@Threei} -CUR +11% (preclinical data on Neuralstem's genetically modified HK532-IGF-1 stem cells in Alzheimer's Disease)
01[09:24] {@Threei} -FINL +6.5% (earnings)
01[09:24] {@Threei} -NKE +3.2% (earnings)
01[09:24] {@Threei} -VRTX +2.5% (CNBC biotech analysts gives ORKAMBI 90% approval chance ahead of upcoming FDA decision)
01[09:24] {@Threei} Downside:
01[09:24] {@Threei} -CLDN -43% (suspending R&D, will cut more jobs)
01[09:24] {@Threei} -RGSE -17.5% (priced $5M offering)
01[09:24] {@Threei} -MU -15% (earnings)
01[09:24] {@Threei} -SNX -9% (earnings)
01[09:24] {@Threei} -ALDR -2.8% (planning to initiate second multi-dose trial in chronic migraine patients)
01[09:24] {@Threei} -ZTS -1.8% (after Valeant rumored to have made offer for the company; negative broker commentary)
[09:24] {RonS} very nice... very evident through the lighting you capture that your area has some of the best air quality in the world...
01[09:25] {@Threei} :)
[09:26] {RonS} ...as long as you don't get Japanese radiation... :)
[09:29] {dino} whats w/china dropping 8%
01[09:35] {@Threei} Long Setup: FB .90 break
01[09:35] {@Threei} If holds .80
01[09:36] {@Threei} Invalidated
[09:36] {nemo} look at hourly, probably a short today
01[09:37] {@Threei} well, I need a vounce or consolidation for short
[09:37] {nemo} yesh, this likely spot
01[09:38] {@Threei} Long Setup: FB .40 break
01[09:38] {@Threei} If holds .30
01[09:39] {@Threei} stubborn
01[09:40] {@Threei} no go
01[09:43] {@Threei} rinse
01[09:44] {@Threei} grrr
[09:45] {dino} wrld smr l ave .89
01[09:47] {@Threei} Short Setup: AIG .65 break
01[09:47] {@Threei} If holds .75
01[09:52] {@Threei} change to .70 break
01[09:52] {@Threei} If holds .80
01[09:55] {@Threei} no go
01[10:00] {@Threei} *(US) JUN FINAL UNIVERSITY OF MICHIGAN CONFIDENCE: 96.1 V 94.6E
[10:02] {RonS} ko for mnst talk
01[10:06] {@Threei} Long Setup: JPM .20 break
[10:22] {RonS} wow...Greece rejects 5 mo extension...
[10:22] {nemo} source please?
[10:23] {RonS} picked up from almalgamator so not specified...
[10:23] {dino} cramer saying greeces offer was forgive additional 200 billion
[10:23] {RonS} these guys have some balls...
[10:24] {RonS} source ANA but do not know who or what that is...
01[10:24] {@Threei} nothing on wire yet
01[10:24] {@Threei} expect denial in the next 5 min :)
[10:24] {RonS} lol
[10:25] {RonS} w/ a re-scheduled meeting of course
[10:28] {dino} and dinner and a showe
[10:33] {RonS} psx puts being bot...sure wish the algo was around...earlier big cvx, xom, cop calls bot
[10:34] {nemo} yeah, me 2
01[10:39] {@Threei} bo single word on Greece on the wire
01[10:39] {@Threei} no
01[10:39] {@Threei} must be some misunderstanding
01[10:39] {@Threei} Short Setup: TWTR .80 break
01[10:40] {@Threei} If holds .90
01[10:40] {@Threei} crap... had FB .20 short in mind, missed alert
[10:43] {dino} sage drop
01[10:45] {@Threei} 1:1
01[11:18] {@Threei} Bonds are selling off this morning as the bickering between Greece and its creditors deepens and the final deadline approaches. Reports suggest that the creditors still will not accept Greece's VAT and pension proposals, while Greece has rejected a five-month, €15.5B bailout extension instead of a comprehensive settlement.
01[11:18] {@Threei} Crude broke to its lowest level since early June, with WTI dropping briefly below $59 in the wake of news that the P5+1 powers are offering more concessions to Iran in a final push for a nuclear deal. The Western officials engages in talks have made upbeat comments even in the face of the Iranians nixing any inspections of military sites as part of a deal.
[11:19] {dino} idiots
01[11:20] {@Threei} negotiations with Iran might have turned in the same thing as Greece... full time job for some
01[11:20] {@Threei} only Greece offers better destinations
[11:20] {dino} lol
01[11:21] {@Threei} so those assigned to Iran case are jealous
01[11:21] {@Threei} and intend to extend it, with meetings in better locations than Teheran
[11:23] {dino} agio smr l .50
01[11:43] {@Threei} Long Setup: FB .50 break
01[11:43] {@Threei} If holds .40
01[11:46] {@Threei} 1:1
01[11:46] {@Threei} Google’s Latest Self-Driving Car Prototypes Are Now On Mountain View Streets
01[11:46] {@Threei} 1:2
[11:58] {dino} wrld smr l .05
[12:03] {RonS} wrld needs more acceptance...
[12:06] {RonS} Mountain View is about 1/2 mile wide...if they were actually running they would be somewhere else...
01[12:06] {@Threei} lol
01[12:07] {@Threei} one of oli companies working in Alberta recently announced purchase of 100 driverless trucks
[12:09] {RonS} jesus, wrld has a 48% short interest...can't we get a cover run?
[12:10] {RonS} midgets, dwarfs? = short wrld?
[12:10] {RonS} or dino's buddies...leprechans...
01[12:11] {@Threei} gremlins?
01[12:11] {@Threei} banshies?
[12:14] {dino} keep talking ron, its helping
01[12:41] {@Threei} Short Setup: FB .78 break
01[12:41] {@Threei} If holds .85
01[12:44] {@Threei} 1:1
01[12:57] {@Threei} 1:2
01[13:10] {@Threei} (GR) Greece PM Tsipras reportedly confirms cabinet meeting for tonight to discuss bailout deal
01[13:11] {@Threei} {Cabinet}: Can we have a meeting in Ireland?
01[13:11] {@Threei} oh man...
01[13:12] {@Threei} [HLF] Pershing Square releases letter to CEO concerning earlier NY post piece - We urge that you release the 71-minute video and any similar materials in your possession or control, and we encourage Herbalife employees, distributors and others with similar materials to come forward.- You are quoted admitting that participation in Herbalife is a lottery ticket and that some distributors have made false promises, claims, in hopes for product, for money, for recruiting, for customers, for pyramiding.
01[13:12] {@Threei} Ackan grabs for any straw
01[13:12] {@Threei} ackman
[13:21] {RonS} guess nemo is right...
01[13:21] {@Threei} about what?
[13:21] {RonS} ...the wrld sucks
01[13:21] {@Threei} ah
01[13:21] {@Threei} he most certainly is
[13:21] {nemo} life is war
[13:21] {dino} lol
01[13:23] {@Threei} come on nemo, find some tree and hug it
01[13:23] {@Threei} and I don't mean some flesh-eating tropical variety
01[13:25] {@Threei} Long Setup: TWTR .85 break
01[13:25] {@Threei} If holds .75
[13:30] {dino} out agio .93, +.43
[13:30] {dino} calling it a week, take car all
[13:30] {dino} care
01[13:31] {@Threei} have a good weekend
[13:31] {nemo} P&Q
[13:33] {dino} 'ty
01[13:47] {@Threei} half out
01[13:47] {@Threei} stop to .79
01[13:53] {@Threei} to .84
01[14:02] {@Threei} be back in 40
01[14:44] {@Threei} Short Setup: JPM .85 break
01[14:44] {@Threei} If holds .95
[14:54] {RonS} this could last until the close...
01[14:54] {@Threei} or next week open...
[14:55] {RonS} ...set a record for a holding period?
01[14:55] {@Threei} need something to brag about
01[14:55] {@Threei} Associated Press: Putin says Russia is going to spend $400 billion upgrading its military
01[14:55] {@Threei} imbecile walks right into the trap of his own making
01[14:56] {@Threei} arm race broke USSR
01[14:56] {@Threei} start a new one, idiot
01[14:56] {@Threei} as good as he is as a tactic, strategist he is not
[15:05] {RonS} oops
01[15:05] {@Threei} yeah
01[15:05] {@Threei} no news for this spike yet
[15:06] {RonS} think will call it a day... have a good weekend 3i
01[15:06] {@Threei} you too
01[15:06] {@Threei} see you monday guys
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