Coffee With Greta: EU Split on Russian Oil Ban
Editor’s Note: Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here. ******** DJIA Futures: +143, (+0.4%) SPX Futures: +11 (+0.2%) NASDAQ Futures: +7 (+0.1%) Good morning friends! Futures are higher as the market weighs hawkish comments from the Fed Chair. Meanwhile, the European Union is split on a Russian oil ban. Let’s get right to it! EU Leaders Split on Russian Oil Ban Oil prices are up slightly as officials in the European Union have been unable to agree on a potential oil embargo against Russia. West Texas Intermediate crude futures are up just 0.5% at $112.65 per barrel with Brent crude futures rising 0.9% to $116.71 per barrel. Some EU countries say the bloc is too dependent on Russian energy to withstand a ban. The American Petroleum Institute is set to release its supply report later today which is not expected to show any change in crude inventory in the U.S. Tesla to Open German Gigafactory Tesla (TSLA) shares are up 0.6% ahead of the open as the electric automaker prepares to open its new gigafactory in Germany. CEO Elon Musk will cut the red ribbon at Giga Berlin today. In a tweet, he said he was “excited to hand over the first production cars” made at the factory. Excited to hand over the first production cars made by Giga Berlin-Brandenburg tomorrow! — Elon Musk (@elonmusk) March 21, 2022 The automaker sees the factory producing up to 500,000 vehicles annually. Alibaba Pops After Upping Buyback Program Alibaba (BABA) shares are surging 9.6% in premarket trade after increasing the size of its share buyback program. The company will now buyback $25 billion worth of shares by March 2024. That’s up from the previous $15 billion. In a statement, Alibaba’s Deputy Chief Financial Officer said, “Alibaba’s stock price does not fairly reflect the company’s value given our robust financial health and expansion plans”. Nike Jumps on Earnings Beat Nike (NKE) shares are up 5% ahead of the open after beating fiscal Q3 expectations. The sportswear company reported earnings of $0.87 per share on $10.87 billion in revenue. That topped analysts’ expectations for EPS of $0.71 on $10.59 billion in revenue. Sales rose 9% year-over-year in North America amid strong demand from consumers returning to stores. Nike’s CEO said, “Marketplace demand continues to significantly exceed available inventory supply”. Powell Says Inflation is Too High Fed Chair Jerome Powell vowed to be tough on inflation Monday, admitting the Central Bank “widely underestimated” how long it would last. In a speech at the National Association for Business Economics Conference, Powell said, “The labor market is very strong, and inflation is much too high”. He said the Central Bank will continue on its path of interest rate hikes to combat those inflation pressures and they’re willing to be aggressive if needed. Powell said the Fed is open to larger rate hikes than 25 basis points and is willing to move rates past neutral and “into a more restrictive stance” if needed. The Dow snapped a 5-day winning streak Monday following those hawkish comments from Powell. In Case You Missed It Boeing (BA) shares fell 3.6% Monday after a 737-800 crash in China. China’s aviation authority confirmed the plane, operated by China Eastern Airlines, crashed with 132 people on board in the mountains of southern China Monday. Officials say there are no signs of any survivors. Boeing said it is ready to assist in the investigation. Alleghany (Y) shares surged 24.8% Monday after Berkshire Hathaway (BRK.A) announced it’s buying the insurance company. Berkshire will buy the company in an all-cash $11.6 billion deal. This is Warren Buffett’s biggest acquisition since 2016. Alleghany will still operate independently after the acquisition.
Continue Reading -->Have We Hit the Long-Term Bottom?
The QQQ has hit a bottom, and Sami’s taking it as the long-term bottom for now due to the multiple green bars after a big drop. What signals would make him change his mind? And how is the upturn affecting his trade ideas for the week? In this video, Sami explains: – Why it hurts to watch healthcare stocks – How CAH differs from other stocks in its sector – Which stock ITOS reminds him of – What surprises him about JBHT – Where M could be heading
Continue Reading -->Scott Redler’s Dog Bytes: Big Week for FAANG
SPX futures are flattish. A little digestive action above 4400-4420 would be impressive and constructive. If it gets and stays above 4465, there’s really no resistance up to 4600 so take care if you’re extra hedged.TSLA had an awesome week. I bought some Tuesday below $800 and traders added above the $842 downtrend line. I sold mine Friday as it hit $907. I was hoping for a pullback to buy. It’s up again this morning. I’d think $935-$940 will be resistance if it sees it today. I’d be careful buying now. AMZN gave us a really big week. I had a nice call spread, sold puts, and held the stock. I sold stock Friday when it hit $3231. I’d like a dip to buy, might not get it. I sold a little premium higher for this Friday. $3350 should be a big resistance level above. AAPL reclaimed $152 and the 200 day fast and participated in the action last week. I got caught a little short Friday for the imbalance which didn’t work. I’ll adjust today for that. $164.48 is pivot resistance. MSFT didn’t lead last week but it participated. Now see if it plays some catch-up. It has room to the $304 area if it wants it.Positions Disclosure as of 3/21/2022 at 8:43 a.m. ET
Continue Reading -->Coffee With Greta: EU Considers Russian Oil Ban
Editor’s Note: Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here. ******** DJIA Futures: -86 (-0.3%) SPX Futures: -4 (-0.1%) NASDAQ Futures: -43 (-0.3%) Good morning friends! Futures are slipping after the market’s best week since 2020. Let’s get right to it! Oil Prices Rally as EU Considers Russian Ban Oil prices are up as some the European Union considers a ban on Russian oil imports. West Texas Intermediate crude futures are up 3.8% at nearly $109 per barrel with Brent crude futures rising 4.2% to over $112 per barrel. Houthi rebels in Yemen also attacked a Saudi Aramco refinery over the weekend, prompting more concerns about supply. Nickel Continues to Plummet Nickel prices plunged in trading on the London Metal Exchange today. The three-month contract hit its new limit-down level of 15% at the open of trade, tumbling to $31,380 per metric ton. Nickel has been in a freefall since trading resumed last week after being halted on March 8 when prices more than doubled to over $100,000. Prices have been higher on the LME than on the Shanghai Futures Exchange. Reuters reported that difference has caused trading volume to be low with few buyers willing to pay the higher price. Zelenskyy Warns of WWIII Ukrainian President Volodmyr Zelenskyy warned Sunday that the war in his country may lead to World War III. In an interview with CNN, he said if peace talks fail between Kyiv and Moscow “that would mean that this is a third world war”. Negotiations are ongoing between the two sides as fighting continues in Ukraine. Civilians were escorted out of the eastern port city of Mariupol by pro-Russian separatists over the weekend. Russia has demanded Ukrainian forces surrender in the city. Data from the UN shows more than 3.3 million people have fled Ukraine since Russia invaded on February 24. President Biden will visit Brussels Thursday for an in-person NATO summit. The White House announced he will then visit Poland Friday but he will not travel to Ukraine. Boeing Falls After Plane Crash in China Boeing (BA) shares are down 6.4% ahead of the open after a 737-800 crash in China. China’s aviation authority confirmed the plane, operated by China Eastern Airlines, crashed with 132 people on board. Officials say contact was lost with the flight over Wuzhou, in the Guangxi mountains. The number of casualties and cause of the crash is still unknown. The FAA and Boeing are expected to assist Chinese regulators in the investigation. The 737 that crashed was not a MAX, which has not yet returned to flight in China. Insurance Company Alleghany Pops on Berkshire Deal Alleghany (Y) is surging 24.9% in premarket trade after Berkshire Hathaway (BRK.A) announced it is buying the insurance company. Berkshire will buy the company for $11.6 billion, or $848.02 per share. This is Warren Buffett’s biggest deal since 2016. Buffett said, “Berkshire will be the perfect permanent home for Alleghany, a company that I have closely observed for 60 years.” Alleghany’s CEO also praised the deal, calling it a “terrific transaction for Alleghany’s owners, businesses, customers, and employees.” Alleghany will still operate independently after the acquisition. In Case You Missed It Last week was the best for the S&P 500 since November 2020. From Monday to Friday, the index surged 6.1%. The Dow rose 5.5% for the week while the Nasdaq jumped 8.1%. The rally came as growth stocks rebounded after the Fed provided more clarity on its future plans. The bank expects 6 more rate hikes this year. U.S. health officials are monitoring the spread of the Covid Omicron subvariant known as BA.2. Officials say it will likely cause an uptick in cases in the U.S. The subvariant is said to be 50% to 60% more contagious than Omicron but no more severe. The new variant reportedly accounts for 25% to 30% of Covid cases in the U.S.
Continue Reading -->Coffee With Greta: Futures Slip to End a Strong Week
Editor’s Note: Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here. ******** DJIA Futures: -171 (-0.5%) SPX Futures: -27 (-0.6%) NASDAQ Futures: -94 (-0.7%) Good morning friends! Futures are lower as the market digests the latest news on the war in Ukraine. Let’s get right to it! St. Louis Fed President Calls for More Aggressive Rate Hikes St. Louis Fed President James Bullard is calling for the Central Bank to be more aggressive on inflation than currently planned. Bullard released a statement today explaining his dissent vote on Wednesday’s rate hike. He was the only FOMC member to vote no on the 0.25% hike, preferring a 0.5% hike instead. Bullard believes the Fed should hike rates to over 3% by the end of this year, which is double the bank’s current plan. He emphasized inflation is hurting lower-income households the most. “The burden of excessive inflation is particularly heavy for people with modest incomes and wealth and for those with limited ability to adjust to a rising cost of living,” said Bullard. Oil Prices Fall Flat Oil prices are down slightly this morning as the market monitors talks between Russia and Ukraine. West Texas Intermediate crude futures are down 0.4% to $102 per barrel with Brent crude futures slipping 0.6% to $106 per barrel. The Kremlin said an agreement still has not been reached in peace talks with Ukraine. Secretary of State Antony Blinken is reportedly planning to visit Saudi Arabia and the UAE soon to ask them to help offset the expected supply loss from Russian oil. Russian missile strikes hit an aircraft repair center on the outskirts of the western Ukrainian city of Lviv today. The attack shows Russia expanding its attacks to new parts of Ukraine. Ukraine’s State Emergency Services also announced one civilian was killed in an airstrike in Kyiv that hit an apartment building. Congress Moves to Revoke Russia’s Protected Trading Status The House voted Thursday to revoke Russia of its status as a “most favored nation” trading partner. That measure passed in a 424-8 vote in the lower chamber. It will now be sent to the Senate, where it’s expected to pass. Stripping Russia of the status will allow the U.S. to impose tariffs on Russian exports. The U.S. also accused Moscow of war crimes in Ukraine after Moscow reportedly bombed a theater with civilians inside in the city of Mariupol. Nickel Prices Plummet Nickel prices continued to fall in trading on the London Metal Exchange. Prices tumbled 12% right at the open of trading toda to $36,915 per metric ton, hitting limit down. The LME has imposed price limits this week in an effort to stabilize trading after nickel prices more than double last week to over $100,000 per metric ton. Russia is the world’s third largest producer of nickel. GameStop Tumbles After Surprise Q4 Loss GameStop (GME) shares are tumbling 8.5% ahead of the open after the video game retailer reported an unexpected loss in Q4. The company reported an adjusted loss of $1.86 per share on $2.25 billion in revenue. That sharply missed analysts’ expectations for a profit of $0.85 per share and is a decline from $1.19 EPS a year ago. But revenue topped expectations for $2.16 billion. GameStop confirmed its plans to launch an NFT marketplace by the end of Q2. The company did not provide full-year guidance. FedEx Profits Fall Short FedEx (FDX) shares are down 2.8% in premarket trade after missing fiscal Q3 profit expectations. The shipping giant reported adjusted earnings of $4.59 per share on $23.6 billion in revenue. Analysts were expecting adjusted EPS of $4.65 on $23.5 billion in revenue. FedEx blamed the miss on higher costs for transportation and wages. The company maintained its fiscal 2022 guidance, forecasting full-year earnings of $21 per share. Existing Home Sales Preview The National Association of Realtors releases its existing home sales report at 10:00 a.m. ET. Economists expect that to show sales dropped to a seasonally adjusted annual rate of 6.13 million units in February. The existing home market has been tight with buyer demand surging while supply remains at a record low. That imbalance has pushed prices to record highs and priced some buyers out of the market. In Case You Missed It Weekly jobless claims beat expectations last week as the labor market nears full employment. The Labor Department reported 214,000 Americans filed initial unemployment claims vs 215,000 expected. It’s the lowest total since January 1. Continuing claims fell by 7,000 to 1.42 million vs 1.48 million expected. Berkshire Hathaway Class A (BRK.A) surged to a fresh record Thursday, closing 2.9% higher at $518,438 per share. The stock rallied as Warren Buffett upped his stake in the energy sector. A new filing shows Berkshire purchased more than 18 million shares of Occidental Petroleum (OXY) in seven separate transactions between Monday and Wednesday this week. The conglomerate now holds more than 136 million OXY shares or 14.6% of the company. OXY jumped 9.5% on Thursday.
Continue Reading -->Options In Play – Luck Of The Lotto
It’s St. Patrick’s day, so it seems appropriate to talk about luck. Weekly “lottos” are low debit contracts that are high risk/high reward type plays. They can make sense in some scenarios.
Continue Reading -->Coffee With Greta: Stocks Slip After Big Rally
Editor’s Note: Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here. ******** DJIA Futures: -123 (-0.4%) SPX Futures: -18 (-0.4%) NASDAQ Futures: -84 (-0.6%) Good morning friends! Futures are lower as the market gives up its two-day rally and focus turns back to the war in Ukraine. Let’s get right to it! Oil Prices Jump on Supply Warning Oil prices are surging today after the International Energy Agency sent out a supply warning. West Texas Intermediate crude futures are up about 6% and back above $100 per barrel. Brent crude futures are also 6% higher, topping $104 per barrel. The IEA is expecting a loss of three million barrels per day of Russian oil and products next month, which outweighs the expected demand drop of 600,000 barrels per day. Russia denied a Financial Times report that there had been “substantial progress” in peace talks with Ukraine. Kremlin spokesman Dmitry Peskov said, “On the whole, that’s wrong… When there’s progress, we’ll tell you.” The two sides are expected to meet again today. Weekly Jobless Claims Beat Expectations Weekly jobless claims fell to the lowest level since the beginning of 2022. The Labor Department reported 214,000 Americans filed initial unemployment claims last week. That’s down 15,000 from the previous week and better than expectations for 215,000. It’s the lowest total since January 1 and shows the economy nearing full employment. Continuing claims fell by seven million to 1.42 million vs 1.48 million expected. Housing Starts, Building Permits U.S. home construction rose more than expected last month. The Census Bureau reports housing starts rose 6.8% to a seasonally adjusted annual rate of 1.77 million units in February. That was better than economists’ expectations for a SAAR of 1.70 million units. Building permits for future projects meantime fell 1.9% to a SAAR of 1.86 million units vs 1.85 million units expected. This comes a day after the National Association of Homebuilders sentiment index fell to a 6-month low at 79. Confidence in current sales conditions fell 3 points to 86 while sentiment about sales conditions over the next 6 months plummeted 10 points to 70. Builders have struggled with high material costs, supply shortages, and labor shortages amid record-high buyer demand. Nickel Trading Resumes Nickel trading was once again resumed on the London Metal Exchange today after being halted Wednesday. The exchange placed an 8% up or down limit on the metal. The three-month contract hit limit-down right at the open, falling to $41,945 per metric ton. Trading was halted last week as nickel prices more than doubled and topped $100,000 per metric ton. Fed Turns Hawkish The Federal Reserve raised the federal funds rate by 25 basis points to a range of 0.25% to 0.5% as expected on Wednesday. St Louis Fed President James Bullard was the only FOMC member to vote against the 0.25% rate hike and in favor of a 0.5% hike instead. The Central Bank also penciled in 6 more rate hikes this year, three in 2023, and zero in 2024. Treasury yields popped on the news with the 10-year yield jumping 8 basis points to a high of 2.24%, the highest level since 2019. Currently that rate is _______. Fed Chair Jerome Powell told reporters they could begin their balance sheet reduction as early as May and that process will move faster this time than last. It took the Fed 2 years between 2017 and 2019 to reduce the size of its $4.5 trillion balance sheet following the 2008 recession. The bank currently holds nearly $9 trillion of Treasury and mortgage-back securities on its balance sheet. Berkshire Hathaway Soars to $500,000 Berkshire Hathaway Class A (BRK.A) shares topped $500,000 for the first time Wednesday. The stock closed 1.3% higher at $504,036 per share. The rally pushed Berkshire Hathaway’s market cap to $737 billion, making it the sixth most valuable company in the U.S. BRK.A is up 11.8% YTD as it’s benefited from the market rotation back into value stocks. The company also owns 90% of Berkshire Hathaway Energy which has a portfolio of 11 energy companies across the U.S. Those businesses have benefited from surging energy prices in recent months. In Case You Missed It U.S. retail sales slowed more than expected in February as inflation squeezes consumers. The Census Bureau reported retail sales rose 0.3% last month to $658.1 billion vs 0.4% expected. Retail sales excluding autos rose 0.2% vs 0.8% expected. The data is not adjusted for inflation and the CPI rose 0.8% in February. January’s retail sales were revised higher to 4.9% from 3.8%. Ukrainian President Volodymyr Zelenskyy addressed Congress virtually Wednesday morning. He called for the U.S. to implement a no-fly zone over Ukraine, asked for more weapons to be sent to Ukraine, and for more sanctions on Russia. Zelenskyy compared the Russian invasion to Pearl Harbor and 9/11 saying, “Just like nobody else expected it, you could not stop it. Our country experienced the same every day, right now at this moment, every night, for three weeks now.”
Continue Reading -->Options In Play – The VXX Disconnect
Rule of thumb when it comes to trading…if something doesn’t make sense, the best thing to do is scale back risk or avoid trading it. VXX has had an unusual few days this week that hasn’t made much sense.
Continue Reading -->Options In Play – Setting The Line For The FOMC Meeting
The closely-watched FOMC rate decision day is finally here, and traders are expecting a volatile session tomorrow. QQQ and SPY are both pricing in sizable moves for Wednesday and the remainder of the week.
Continue Reading -->Coffee With Greta: Fed Decision Day
Editor’s Note: Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here. ******** DJIA Futures: +340 (+1%) SPX Futures: +45 (+1.1%) NASDAQ Futures: +203 (+1.5%) Good morning friends! Futures are higher as the market gears up for today’s Fed decision. Let’s get right to it! Fed Decision Day The market is laser focused on the Fed as the Central Bank is set to announce its rate hike decision at 2:00 p.m. ET. This will be the bank’s first rate hike since 2018 after lowering rates to near zero in March 2020. CME Group’s FedWatch Tool shows more than 98% of traders believe this will be a 0.25% rate hike. The market is also hoping for more clarity on the bank’s plans to reduce the size of its balance sheet. Chairman Jerome Powell told Congress in early March that process will start after rate hikes have begun. Consumer inflation pressures hit a fresh 40-year high in February as the CPI surged 7.9% year-over-year. And wholesale inflation hit a record high as the PPI skyrocketed 10% annually. Retail Sales Slow U.S. retail sales slowed more than expected in February as consumers were dragged down by inflation. The Census Bureau reported retail sales rose 0.3% last month to $658.1 billion. That was weaker than economists’ expectations for 0.4%. January’s retail sales were revised higher to show a gain of 4.9% vs the previous 3.8%. Core retail sales, which exclude gas auto sales, rose 0.2% vs expectations for a 0.9% increase. Import Prices Surge U.S. import prices jumped 1.4% in February, continuing to fuel inflation. That was better than economists’ expectations for a 1.6% increase and lower than 1.9% in January. January and February combined marked the largest increase in 11 years. Oil made up most of February’s gain, rising 8.1%. Excluding fuel, import prices rose just 0.8% last month. Export prices meantime jumped 3%, the largest increase on record, and surged 16.6% year-over-year. Oil Falls Below $100 Oil prices are rising slightly today after tumbling below $100 on Tuesday. West Texas Intermediate crude futures are up 0.6% to just over $97 per barrel while Brent crude futures are up 0.2% to just over $100 per barrel. The oil market has cooled amid ongoing peace talks between Ukraine and Russia. Ukraine’s President said today those talks were sounding “more realistic” but more time is needed. Russia’s Foreign Minister said some deals are close. Nickel Trading Shut Down Again Nickel trading resumed on the London Metal Exchange today after a week-long halt. The LME halted trading March 8 after Nickel prices more than doubled and topped $100,000 per tonne for the first time in history. Price moves today were limited to 5% above or below the last closing price before trading was suspended. But LME was forced to halt trading again after an error allowed trades to go through below the daily price limit. The exchange said it is investigating the glitch and will try to reopen the market ASAP. The trades executed below the limit will be canceled. LME also imposed 15% limits on aluminum, copper, lead, tin, and zinc. This is the first time the exchange has ever placed limits on physical contracts. Metals trading has been volatile amid the war in Ukraine as both Russia and Ukraine are key global suppliers of several metals. Starbucks CEO Retiring Starbucks (SBUX) shares are up 5.7% ahead of the open after CEO Kevin Johnson announced his retirement. In a statement, Johnson said, “A year ago, I signaled to the Board that as the global pandemic neared an end, I would be considering retirement from Starbucks. I feel this is a natural bookend to my 13 years with the company.” Founder and former CEO Howard Schultz will take over as interim CEO. Starbucks plans to find a permanent replacement by the fall. Chair of the board, Mellody Hobson said, “We have a great slate of candidates. People want this job, and we’re fully confident we’ll have a new leader in the fall.” Raskin Withdraws Fed Nomination In other Fed related news, Sarah Bloom Raskin withdrew her nomination to serve on the Federal Reserve board Tuesday. Raskin had been nominated by President Biden to be the Central Bank’s next vice chair for supervision. But she faced an uphill battle for confirmation in the Senate over her views on climate policy. All 50 Senate Republicans were opposed to her confirmation. Then West Virginia Democrat Senator Joe Manchin confirmed this week he would not confirm her. That made it virtually impossible for her nomination to move forward in the 50-50 Senate. Homebuilder Sentiment Preview The National Association of Homebuilders releases its sentiment index at 10:00 a.m. ET. The survey is expected to show confidence among builders slipped two points this month to 80. Builders have seen their business boom due to low supply of existing homes on the market. But they’ve faced severe supply chain and labor shortages as they struggle to keep up with record high demand. In Case You Missed It U.S. airline stocks rallied Tuesday after three major airlines hiked their 2022 revenue forecasts. Delta (DAL) shares jumped 8.7%, while United (UAL) surged 9.2%, and Southwest (LUV) rose 4.9%. All three companies raised their revenue forecasts, predicting a strong rebound in travel demand this year. Delta said its bookings are already outpacing 2019 levels. Tesla raised prices for the second time in a week amid high inflation pressures. The automaker hiked prices on all of its models in the U.S. as well as the Model Y and Model 3 in China. TSLA shares rose 4.6% Tuesday. The price hikes range from $2,000 to $10,000 depending on model. Tesla did not specify the reason for the price hikes but the decision comes days after CEO Elon Musk said they were “seeing significant recent inflation pressure in raw materials & logistics”.
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