DHUnplugged Podcast

Markets acting like the Energizer Bunny – Keeps going an going and going… Seems that world events, economic headwinds and even coup attempts are not enough to dissuade investors from throwing their money into stocks.

Earnings season is well underway with hundreds of companies reporting over the next couple of weeks.

John nails it with his latest pick !

See this week’s stock picks HERE

Follow John C. Dvorak on Twitter

Follow Andrew Horowitz on Twitter

Brexit turned out to be nothing. In fact markets making new highs as the promise of stimulus and liquidity quiet market fears.

Meanwhile, several U.K. based real estate funds are denying withdrawals as investors are pulling out too much money. Bonds rallying hard along with equities as the flight to safety pushes sovereign debt “more” negative. Crazy times….

What comes next as earnings season begins?

See this week’s stock picks HERE

Follow John C. Dvorak on Twitter

Follow Andrew Horowitz on Twitter

The Brexit vote sent shock wave throughout financial markets. What really happened and what is the outlook for Europe and the rest of the world?

Is there a chance for a re-vote and an undo of the referendum? Markets jolted, financial leaders say be calm, but is this a short-term sell off or is something more ominous in store? Markets lost over $2 trillion over the last few days…

We cover the ins and outs of the markets, what could be in store and some ideas on how to profit.

See this week’s stock picks HERE

Follow John C. Dvorak on Twitter

Follow Andrew Horowitz on Twitter

Countdown to the Brexit vote – two days from now we will know the result. Some are predicting that if the U.K. were to vote to leave that the pound could drop and a global recession would ensue.

Janet Yellen testifies to Congress over the next two days, shedding light on some of the Fed’s recent decisions. Dovish commentary and a defensive posture should be the overall tone – with nothing new to illuminate us on the outlook for the U.S. economy.

Netflix has a new “icon” and advertisers have a new way twist to an up and coming technology – all this and more on this episode.

Click HERE for Show Notes and Links

~ Quick note: AH will be traveling the next two weeks ~

Markets in a bit of a tailspin and incredible rally after the latest Brexit poll. SURGING on weekend poll. Each day another poll update is released from various parties. Sunday the “stay” camp saw an uptick – pushing up stocks globally. Today the “leave” camp saw an increase by 2%

Oil back above $50 after a sizable draw-down of inventories reported after the close on Tuesday.

Yellen testimony to Congress today and tomorrow  –

— Asked about forward Guidance: Yellen said that the Fed is not relying much on forward guidance right now. Says a projections are helpful to the public, but not a commitment on policy. Says paths can change over time as economic outlook is updated.

— Asked about most recent jobs report: Says that labor market continues to perform well; not overemphasizing one jobs report. Says can watch economic developments since inflation is low.

BREXIT Poll Update

Last week’s title to episode was about China not being denied MSCI inclusion – had a picture with that and only one follower mentioned that the picture was had Japanese writing…

BIG NEWS after the close today – Tesla (TSLA) offering to buy SolarCity (SCTY). SCTY up 15% on news to $24.35 (offer may be approx $26-$28) and Tesla SLAMMED down 12%.

– All share deal – no cash but….

– Serious headscratcher – Tesla does not have the money to do the deal as it needs all it has and more to build factories to produce cars.

– What is synergy?

– Hail Mary attempt to prop price of SCTY for Elon Musk?

– Musk majority owner of both companies. Cousin is CEO of SolarCity

TSLA/SCTY After Hours

Noticing that Bloomberg has a fascination with writing about watches. Now Barron’s cover is about the best watches of 2016 [LINK] – AND they are expensive! Is this just adverts?

Speaking of covers – New York Daily News covers are even more nuts than ever…. SEE LINK

NY criminalizes bots buying up tickets – Ticketing outlets and credit card companies revealed that bots scoop up the best seats in seconds, which scalpers then resell at prices many times over face value. Scalpers who exploit such software could now face crimi...

China markets were once again denied the coveted inclusion by MSCI in a further setback to the markets.

Brexit worries are preventing new market highs as trades are unwound ahead of the June 23rd vote and hopes are alive that the Fed will say something, anything that will reignite a flame for bulls to keep buying…

What to make of the VIX? Microsoft’s purchase of LinkedIn and more…

Please check out YestoBitcoins.com

Click HERE for Show Notes and Links

Sponsor: This episode is sponsored by YestoBitcoins.com

Markets in a bit of a tailspin after the latest Brexit poll. With the Fed meeting this week – is this just a way of pressing on the Fed to not do anything?

Retail sales for May came in slightly better than expected, but still nothing to get too excited about.

– U.S. luxury fashion retailer Neiman Marcus Group Ltd LLC reported its third straight quarterly drop in sales at established stores and a nearly 81 percent fall in profit amid a slowdown in apparel spending.

– What is going on with higher end retail ???

The VIX – skyrocketing – 50%+ over past few days to a high of over 21 today. Was under 13 last week. The last time  we saw this lvel was back in February as markets were being sold off in a hard correction. Moves like this often signal bottoming potential as many are seeking to buy protection at any price.

Microsoft (MSFT) buying LinkedIn (LNKD) for 50% premium – about $25 billion. Any other targets?

– LinkedIn down 13% YTD even after the $196 price paid…

– Twitter shares surge on the report as hope is alive that they will become a target for acquisition

Brexit – the polls now show a lead to the LEAVE side of things – markets are moving along with every headline. Some listener emails about what will benefit and what will see more problems.

Apple WWDC – anything exciting???? Stock did not price as anything was incrementally beneficial….

MAC

* Mac OS will feature universal clipboards for copying and pasting across devices.

* Mac OS will allow desktop saved files available for download from iPhone and iPad.

* Mac OS will feature Apple Pay for the web.

* Mac OS will feature SIRI for Mac

TV

* Apple TV now has 1300 video channels.

* Will feature ability to watch 4 sports games at one time through Fox Sports Go (FOXA).

* Apple TV will feature Sling TV with many cable channels.  (DISH, NFLX)

* Apple TV introduces TV remote applications where you can change channels from iOS device without reaching for Apple TV remote.

* Apple TV will feature ‘Dark Mode’

* Apple TV OS will available this Fall.

Watch

* New WatchOS accelerates application launch time.

* New WatchOS will feature a ‘dock’ feature for recently used apps on the Watch.

* Will have feature to reply to messages without tapping reply.

* New WatchOS will allow users to write on the screen.

After a seemingly interminable wait, the yield on Germany’s 10-year sovereign debt has dropped below zero for the first time. The shift into negative territory is part of a continuing trend across global markets that has seen record low yields and surging volatility in developed market sovereign debt.

Investors will be watching China as MSCI Inc. is set to announce early Wednesday local time whether they are going to include mainland shares in their global benchmark indices. NO! Declined for the second time around. MSCI said China had made “significant steps̶...

The weakest jobs report in years does not dissuade investors from piling into equities. While there is plenty of headwinds for markets, there is seemingly no thought to any downside potential. Oil is helping to keep a floor under prices as production has dropped and rumors continue to floated from OPEC.

Fed speakers are talking both sides of the story – ignore weak jobs numbers as the economy is in good shape while rate hikes may not be in the cards due to many concerning factors. Which story to believe? What is for sure is the the Fed wants to create confusion to keep investors guessing over what their next move will be.

Please check out  YestoBitcoins.com

Click HERE for Show Notes and Links

Sponsor: This episode is sponsored by YestoBitcoins.com

As Gomer Pyle would say: “Surprise, Surprise”

– Jobs report came in very light with on 38k new additions to payroll. However, the Unemployment rate dropped to 4.7% (Nov 2007 was last time unemployment rate was this low)      ?? Is this a weak or strong report?

– About 450k dropped out of labor force

– Some weakness due to the Verizon strike (35k)

– Last 2 months data revised down by 50K

– Average adds over 3-months 116k

– Wage growth was up slightly

With the weak jobs report the probability of a Fed rate hike in June dropped from 20% to 4% – through Fed futures outlook.

USD dropped hard on the report and sent gold, silver screaming higher – equity markets were not too thrilled – but recovered – now the S&P 500 is just 1% from all-time high. DJIA hit 18,000 in early trade.

– Are the negative interest rates finally kicking in?

Is the Fed creating “Organized Confusion” purposely? (Fed speakers out with both sides of the story – ignore the jobs report as economy is strong, but rates to remain low)

Oil holding close to the $50 level as almost all of the Nigerian pipelines are offline. Rebel attacks are causing major problems. Corrupt country – could big boys be helping to the rebels?????

Economic news just in:

* Among six regions that Moody’s assesses, the decline in growth is most pronounced in Eastern Europe and Central Asia. Here, Moody’s estimates that average median growth will be 2.6% from 2013 to 2016 compared to average growth of 6.5% from 2005 to 2008.

* World Bank cuts 2016 global growth forecast to 2.4% from 2.9% due to sluggish growth in advanced economies, stubbornly low commodity prices, weak global trade and diminishing capital flows

Podcast Awards voting is open!

 

OPEC met to attempt to agree on “production caps” and the meeting ended with no agreement – again. But oil was unfazed as reports of a 9% drop in production over the past few months due to U.S. rigs offline. WTI Crude ~ $50.

Last week there was a some news about auto sales that was of interest. Is peak-auto now a thing?

* Automotive News reports that May 2016 marked the biggest monthly sales drop for the U.S. auto industry in nearly six years.

* The downturn was driven by a big drop in demand for passenger cars and two fewer selling days this May than the year-ago period.

* May 2016 was only the industry’s eighth monthly sales decline since 2009.

* Automotive News, citing True Car estimates, indicated average incentives per vehicle increased 7.1% to $3,034 in May versus the same period a year ago.

Snapchat Inc.

The Fed Chair, Janet Yellen seemed to have given the go-ahead for a rate hike as early as the June meeting. Maybe yes, maybe no. But most probably a trial balloon that will float and then bust by the time the meeting rolls around.

It is a shortened trading week for U.S. markets are equity markets are closed in observance of Memorial Day. However, that does not mean we will not see the “all important” employment report this Friday – expectations have dropped a bit – what do we think? Listen in as we take a look at what was and what will be for the markets.

 

Click HERE for Show Notes and Links

Last week was a good week for markets ahead of some key reports and a holiday shortened trading week. DJIA up 2%, NASDAQ up 3.4%! Some better then expected economic reports, a more hawkish Fed. But could it be that the move to postpone any Greek debt write-downs for a few years AND postpone the tax hike in Japan was more beneficial to markets? Or maybe oil hitting $50 for the first time since November 2015.

DJIA up for 4 months in a row – first time since 2014!

Trial balloons by Fed and government – thoughts on that as a method of molding markets.

Crawfish Boil and BBQ last weekend at Andrew’s house – Pix:

Crawfish Party 1

Crawfish Party 2

Even with the uneven housing recovery, there has been some slow, but steady improvement and last week we saw some really good reports:

– A 16.6% jump in new home sales in April, putting them at an 8-year peak.

– Housing contract activity surged 5.1% last month, according to the National Association of Realtors, reaching a level unseen since February 2006

GDP – 2nd estimate of the 1st Quarter 2016 activity was revised up (we see this many times that revisions are often to the upside). Still sluggish at 0.80% versus the estimate of 0.50% on an annualized basis.

– Some important takeaways from the GDP Report:

– Net exports continue to slide to the lowest levels in years and years

– Personal consumption is not picking up – which could explain some of the retail sales weakness

– The upward revision had a good bit to do with the change in private inventories

Barron’s cover-page this week – contrary-indicator or?

Barron’s Cover

Hackers infiltrated Time Inc.’s Myspace social network and published user data on an online forum shortly before Memorial Day weekend, the company said Tuesday. The data stolen includes e-mail addresses, user names and passwords for accounts created prior to June 11, 2013 on the old Myspace platform, according to a statement. The breach doesn’t affect any Time Inc. information or financial data, the New York-based publisher said.

– Why is the “old” platform still active and accessible?

– Why is any MySpace platform still active?  Has anyone seen this lately? What is the purpose –> www.myspace.com

 

Greek debt write-downs will wait until at least 2018 says Germany. Retail sales in the U.S. are still feeling the pain as the latest report from Best Buy (BBY) shows a rather miserable outlook ahead.

Volumes are slowing into the summer and M&A rumors as well as upgrades by Sell-side should be in full swing. Markets choppy, one day up and one day down. The cycle could play out for the foreseeable future.

A smattering of interesting news that may move markets and a few stock picks in this episode.

 

Click HERE for Show Notes and Links

Big day on Wall Street – DJIA up 200 points+, S&P and NASDAQ moving higher – no news to explain. Big day Tuesday! Oil gains in after hours as inventory released – now at $49 again.

Interesting – over the past 10 trading days – every other day is up or down. Seems that there is no direction… Volumes starting to dry up into summer so…. There will be more rumors about M&A and upgrades by sell-side analysts to keep things on a happy note for markets.

Uber announces a leasing program available for “$250” for a car. Different cars, but when you look into it, $116- $150 per week for 150+ weeks. Cost is deducted from your Uber earnings. How is this going to play?

Follow up on Kombucha – have you seen how this stuff is made? Watched a video as my son said we should make as he heard it was good for you… Nasty process!   (Rethinking investment in REED)

– Kombucha starts out as a sugary tea, which is then fermented with the help of a scoby. “SCOBY” is actually an acronym for “symbiotic culture of bacteria and yeast.”

SCOBY Pic

 

Fedex – when was that last time you shipped anything ? Have you noticed the prices? 2 day from Florida to New York – price?

Very interesting story about pharma and charities. Charities set up to pay for prescriptions for people that do not have the means to pay the high prices – seeded by pharma companies and other donors. What a scam! [LINK]

Takata recalls still coming in – upwards of 125 million airbags now recalled. Currently about 1.25 billion cars now in world. So, only 10% but is that low and how is the company staying in business? (Answer: Japan govy will protect)

French police and prosecutors swooped on Google’s Paris offices, intensifying a tax-fraud probe amid accusations the Internet giant fails to pay its fair share across the European Union.

What is our take on markets? Topping pattern or just consolidation? (See chart below)

S&P 500 Chart

ANNOUNCING THE Progress of the

DHUnplugged Closest to the Pin Contest for Intel (INTC)

Currently CTP = Intel (INTC)

Winners will be getting great stuff like the new DHUnplugged Shirts (Designed by Jimbo)

OIL on the move, inflation ticking up and GDP is flat. Stocks are still range-bound with erratic day-to-day moves. There is some talk that Japan’s Abe is going to move back the sales tax increase and plenty of central bank gibberish about rate hikes and live meetings.

Coming up this week we are looking forward to plenty of earnings news from some of the key discount retailers as well as minutes from the latest Fed meeting. Watching for further signs that more stimulus is on the way!

 

Click HERE for Show Notes and Links

News flow is a bit on the light side. Not much ultra exciting to be honest….Earnings season winding down, summer is just ahead…

Solid start to the week – with oil moving higher, equities rallied Monday was a good day overall as it started with some opening bullishness from Warren Buffett – $1 billion new position in Apple (AAPL) for Berkshire Hathaway. But then Tuesday came and washed all that away.

Tuesday – CPI update. Inflation is on the rise – latest report shows that a month-over-month gain of 0.4% (annualized at 4.8%). Year-over-year 2.1%, still above the 2% Fed target.

Inflation Chart

Some mail in – comments that we are being too negative lately. The question was if it is because there is nothing good to talk about or we are just picking on the “bad” news. Also wondering if we can try to be more balanced….

Some good news: Inflation is picking up… Commodities continue to get bid, Transports are holding…

More good news? Goldman now believes that the supply-demand has switched and we will be seeing draw-downs on crude inventories due to lower production and interruptions of flow from Canada and other areas. This is a major change as they have been very bearish of pricing for some time. (Crude @ $48.50)

Even better news: The U.S. released the treasury holdings for Saudi Arabia for the first time.. $116 billion. (The concern was that they may have had at least $750 billion and if the 9/11 papers were released they would sell all… Since 1970 this information has been secret and all of a sudden it is released? (Follow up – Senate passes bill allowing for 9/11 lawsuits against Saudi Arabia)

S&P 500 Earnings estimates trend:

S&P 500 Estimate Trend

Oh my – the big-box retailers not doing so well. Macy’s (M) down 23% this month, Dillard (DDS) down 18%, Kohls (KSS) down 20%, Sears (SHLD) down 31%, JC Penny (JCP) down 21%, Nordstrom (JWN) down 26%.

Discount retail doing much better so far this month. Dollar General (DG) down 1%, WalMart (WMT) down 2.6%, TJX Companies (TJX) down 0.3%, Target (TGT) down 7%…

AND – Amazon (AMZN) up 5.5% this month.

Central banker talk – just today:

* Fed’s Williams and Lockhart both say that two to three rate hikes this year is possible

* Fed’s Williams says wages are picking up more than suggested by the averages

* Fed’s Lockhart says Fed wage tracker in on the rise

* Fed’s Williams comments out here… pressing the hawkish view again, “June is a Live Meeting” etc

* Fed’s Kaplan says a rate hike may be warranted soon

* Williams is noting that the Brexit vote could have an impact on the dollar

Wildfires in Canada disrupting oil production is helping to move oil prices – is this finally the bottom for crude or just a false move that will resolve lower?

China has mixed economic data, but markets like that inflation saw stabilization.

A slew of earnings from the big-box retailers are on the way… What will that tell us about the state of the U.S. consumer?

Plenty of fun facts and inside the news discussions in this episode along with some insight on the egregious pay for some hedge fund managers.

Click HERE for Show Notes and Links

Ft. Lauderdale Air show this weekend was awesome!

Employment numbers disappoint. 160k new hires falls short of the 205k expected. Unemployment rate at 5%. Markets were stunned (at first) then managed to move higher by the end of the day on Friday as some Fed speakers came out more dovish (after some very hawkish comments earlier in the week by others) – markets did not like at first, but quickly turned around… Today DJIA up 222 points on no apparent news that should have moved markets…

Carl Icahn is far more bearish than he was in January as a fund he runs recently had a net short position of 149%.

Wildfires in Canada are unbelievable – threatening oil sands production.

Krispy Kreme (KKD) – bought and going private by same company that took Kuerig Green Mountain private for 25% premium. (Both of these companies were having severe problems and must have seemed to JAB Beecha major turnaround potential.)

Twitter followers – Last week Andrew was whining that he did not have as many followers as John (by a longshot) – John chuckled.. An update…

Brazil’s interim lower house chief Waldir Maranhao called for a new vote on the impeachment of President Dilma Rousseff, in a surprise move that prompted a selloff across local markets.

Brazil ETF Reaction

Microsoft: The tech giant said its MSN website in China — which provides news and lifestyle content as well as a search function — will be shut down on June 7. Microsoft remains “deeply committed to China,” the company said in a statement, noting that the country hosts its biggest R&D facility outside the U.S. and is a market for products like Windows 10 and cloud computing services.

Facebook workers routinely suppressed news stories of interest to conservative readers from the social network’s influential “trending” news section, according to a former journalist who worked on the project. This individual says that workers prevented stories about the right-wing CPAC gathering, Mitt Romney, Rand Paul, and other conservative topics from appearing in the highly-influential section, even though they were organically trending among the site’s users. (Facebook of course denies this)

ANNOUNCING THE WINNERS of the

DHUnplugged Closest to the Pin Contest for Domino’s Pizza

Currently CTP = Intel (INTC)

Winners will be getting great stuff like the new DHUnplugged Shirts (Designed by Jimbo)DHU’s Official Model – Vivi Jugo