Intersting thoughts

[Bozzie]

Global Market Comments
March 22, 2021
Fiat LuxFeatured Trade:(MARKET OUTLOOK FOR THE WEEK AHEAD, or ENTERING TERRA INCOGNITA),
(TLT), (TSLA), (JPM), (VIX), (QQQ), (IWM), (BAC), (C), (SPY)​

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The Market Outlook for the Week Ahead, or Entering Terra IncognitaDuring the Middle Ages, when explorers sought new lands and their rich treasures, large sections of their navigational charts were marked with the term “terra incognita.”

That meant what lays beyond was unknown and that they should enter only at their own risk. Often there was a picture of a dragon or a sea monster to mark the spot.

There was also often a warning that you might even sail off of the edge of the earth.

Financial markets have entered a “terra incognita” of their own recently.

Here is the big unknown: How high can ten-year US Treasury bond yields soar when the Federal Reserve is promising to keep overnight interest pegged at 25 basis points until 2024 in the face of essentially unlimited monetary and fiscal stimulus?

So far, the answer is: more.

That is a really big question because we’ve never really been here before.

In fact, some Cassandras from the right are even predicting such a policy will cause us to sail off of the edge of the earth. The modern-day equivalent of running into dragons is inviting runaway inflation.

I can tell you from my own vast, almost immeasurable navigational experience (I am licensed by the US government) that “terra incognita” does not invite inordinate risk-taking or betting of ranches by traders or investors. Instead, they tend to sit on their hands, work on their golf swing, or update their Facebook pages.

That is what the Volatility Index (VIX) last week is essentially screaming at us by touching the $19 handle for the first time in a year.

Almost everyone I know has made more money in the markets than at any time in their lives. That is what a near doubling of the stock market in a year gets you.

And the new wealth was not attained because their intelligence and market insight have suddenly doubled, although a strong case for such can be made for readers of Mad Hedge Fund Trader.

So I used the Friday, March 19 option expiration to go into a rare 100% cash position. I really have gotten away with too much lately.

Then feeling guilty, I slapped on a single long in Tesla (TSLA), that old reliable money-maker. It’s worked for me since it was $3.50 a share. After all, a gigantic green energy infrastructure bill is about to pass in Congress. What better to own than the world’s largest EV car maker.

And what a tear it has been.

After bringing in a ballistic 66.64% profit in 2020, I reeled in another 40.38% gain in the first 2 ½ months of 2021. I did this via 40 trades which generated 38 wins and only two losses. That’s a success rate of an incredible 95%. I have to pinch myself when I read these numbers.

I am concerned because numbers any higher than this will look fake. It’s a rule of thumb in the investment business that when managers claim a 100% success rate, they are either high-frequency traders back by super-fast mainframe computers or running a scam.

So, I have been advising clients to pare back their biggest positions that became massively overweight purely through capital appreciation. Financials come to mind. JP Morgan (JPM) up 81% in three months? Sounds like a Ponzi Scheme.

So let me give you some upside targets in the bond market. We doubled bottomed in 2012 and 2016 at a 1.37% yield in the ten-year Treasury bond yield. We have already surpassed that level like a hot knife through butter.

At the depths of the 2008-2009 Great Recession, rates bottomed at 2.0%yield, which now seems within easy reach. The lowest yield we saw after the 2003 Dotcom Crash was a 3.0%.

When the upside targets in interest rates in this cycle are the lows of the previous economic cycles, that augurs pretty well for the future of stock prices. That is the guaranteed outcome of the tidal wave of cash now sweeping the global financial system.

The permabears are warning that the “Roaring Twenties” have already happened. I argued that they are only just getting started and that the indexes have another 4X of upside in them over the rest of the decade. When the last “Roaring Twenties” occurred, you didn’t sell in 1921.

It also reminds me of the huge “rip your face off” rally we saw from March 2009 to 2010. A lot of market gurus said then that was the peak. They were wrong. Today, they are driving for Uber and Lyft.

So when a talking head warns you that higher interest rates will cause the stock market to crash, just turn off the boob tube and go back to practicing your golf swing.

The Mad Hedge Summit Videos are Up, from the March 9,10, and 11 confab. Listen to 27 speakers opine on the best strategies, tactics, and instruments to use in these volatile markets. The product discounts offered last week are still valid. Start, stop, and pause the videos at your leisure. Best of all, access to the videos is FREE. Access them all by clicking here at www.madhedge.com, click on CURRENT SUMMIT REPLAYS in the upper right-hand corner, and then choose the speaker of your choice.

Ten Year Bond Yields (TLT) soar to a 1.75%, setting financials on fire and demolishing tech (QQQ). We are rapidly approaching a 2.00% yield, which could trigger a huge round of profit-taking on bond shorts, a domestic stock selloff, and a tech rally. The next great rotation may be just ahead of us.

Oil (USO) dives 8% on fears of an imminent Saudi production increase and a worsening Covid-19 outlook in Europe. Are we next with all these early reopening’s? Gone 100% cash at the close with the March quadruple witching option expiration.

A Tax Hike is next on the menu. Corporate tax rates are returning from 21% to 28% for the small proportion of companies that actually PAY tax. Raising taxes on earnings of more than $400,000. Pass through entities to get a haircut. Increasing estate taxes. You better die soon if you want your kids to stay rich. Increase in capital gains taxes over $1 million. I want my SALT deduction back! The grand negotiation begins on who needs bridges, rail lines, and subway extensions. Hint: for some reason, there have been no new federal projects started in California for the past four years and all the existing ones were cut back.

Value Stocks (IWM) are beating growth ones, reversing a decade-long trend. The Russell Value Index is up 11% this year, while growth is unchanged. It’s a total flip from last year when growth was tech-led. This could continue for years, or until the tech becomes the new value stocks. Big winners include Boeing (BA), JP Morgan (JPM), and Morgan Stanley (MS), all Mad Hedge moneymakers.

Bitcoin tops 61,000. Nothing else to say but that because there are no fundamentals. It’s up 80% in 2021 and 540% YOY. But it is becoming a good risk-taking indicator thought, and right now it is shouting a loud and clear “Risk On.”

It’s going to be All About Stock Picking for the Rest of 2021, says Morgan Stanley strategist Mike Wilson. Dragging on the index from here on will be the prospects of rising rates, tax hikes, and inflation. Mike especially dislikes small caps (IWM) which have already had a terrific run, with a 19% YTD gain. Stock picking? Boy, did you come to the right place!

Fed to hold off on rates hikes through 2023, said Governor Jay Powell after the open Market Committee Meeting. Bonds rallied a full half-point on the news and then crashed again, taking yields to a new 1.70% high. It sees inflation reaching a positively stratospheric 2.0% sometime this year, after which it will die, so nothing to do here. This is what a 100% dovish FOMC gets you. Let the games begin!

New Housing Starts Collapse, from an expected +2.5% to -10.3%, as high lumber, land, labor, and interest rates take their toll. This will only drive new home prices high at a faster rate and the little remaining supply dries up. Millennials need some place to live.

When we come out the other side of pandemic, we will be perfectly poised to launch into my new American Golden Age, or the next Roaring Twenties. With interest rates still at zero, oil cheap, there will be no reason not to. The Dow Average will rise by 400% to 120,000 or more in the coming decade. The American coming out the other side of the pandemic will be far more efficient and profitable than the old. Dow 120,000 here we come!

It’s amazing how well patience can help your performance. My Mad Hedge Global Trading Dispatch profit reached a super-hot 16.89% during the first half of March on the heels of a spectacular 13.28% profit in February.

It was a tough week in the market, so I held fire and ran my seven remaining profitable positions into the March 19 options expiration. I took advantage of a meltdown in Tesla (TSLA) shares to put on my only new position of the week with a very deep-in-the-money long. That leaves me with 90% cash and a barrel full of dry powder.

This is my fifth double-digit month in a row. My 2021 year-to-date performance soared to 40.38%. The Dow Average is up a miniscule 7.7%so far in 2021.

That brings my 11-year total return to 462.93%, some 2.12 times the S&P 500 (SPX) over the same period. My 11-year average annualized return now stands at an unbelievable 41.14%.

My trailing one-year return exploded to 121.60%, the highest in the 13-year history of the Mad Hedge Fund Trader. I truly have to pinch myself when I see numbers like this. I bet many of you are making the biggest money of your long lives.

We need to keep an eye on the number of US Coronavirus cases at 29.8million and deaths topping 542,000, which you can find here. Thankfully, death rates have slowed dramatically, but Obituaries are still the largest sector in the newspaper.

The coming week will be a boring one on the data front.

On Monday, March 22, at 9:00 AM, Existing Home Sales for February are released.
On Tuesday, March 23, at 9:00 AM, New Home Sales are published.
On Wednesday, March 24 at 8:30 AM, we learn US Durable Goods for February are printed.
On Thursday, March 25 at 8:30 AM, Weekly Jobless Claims are out. We also get the final read of US Q4 GDP.
On Friday, March 26 at 8:30 AM, US Personal Income & Spending for February are released. At 2:00 PM, we learn the Baker-Hughes Rig Count.

As for me, I have been doing a lot of high altitude winter mountain climbing lately, and with the warm spring weather, the risk of avalanches is ever present. It takes me back to the American Bicentennial Everest Expedition, which I joined in 1976.
It was led by my old friend, instructor, and climbing mentor Jim Whitaker, who pulled an ice ax out of my nose on Mt. Rainer in 1967 (you can still see the scar). Jim was the first American to summit the world’s highest mountain. I tried to break a high-speed fall and an ice ax kicked back and hit me square in the face. If I hadn’t been wearing goggles I would have been blinded.

I made it up to 22,000 feet on Everest, to Base Camp II without oxygen because there were only a limited number of canisters reserved for those planning to summit. At that altitude, you take two steps, and then break to catch your breath.

There is a surreal thing about that trip that I remember. One day, a block of ice the size of a skyscraper shifted on the Khumbu Ice Fall and out of the bottom popped a body. It was a man who went missing on the 1962 American expedition. Everyone recognized him as he hadn’t aged a day in 15 years, since he was frozen solid.

I boiled my drinking water, but at that altitude, water can’t get hot enough to purify it. So I walked 100 miles back to Katmandu with amoebic dysentery. By the time I got there, I’d lost 50 pounds, taking my weight to 120 pounds.

Jim was an Eagle Scout, the first full-time employee of Recreational Equipment Inc. (REI), and last climbed Everest when he was 61. Today, he is 92 and lives in Seattle, WA.

Jim reaffirms my belief that daily mountain climbing is a great life extension strategy, if not an aphrodisiac.

Stay healthy.

John Thomas
CEO & Publisher
The Diary of a Mad Hedge Fund Trader

Mount Everest 1976

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It’s Really Been a Year of Whoppers

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Quote of the Day“Data is the new oil,” said Dr. Kai-fu Lee, a leading Chinese artificial expert.

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[Bozzie]

March 23, 2021

Good morning. (Was this newsletter forwarded to you? Sign up here.)

“People come here and start realizing that there’s way more tech talent than they thought,” Mayor Francis Suarez said of Miami. Cristobal Herrera-Ulashkevich/EPA, via Shutterstock

[h=2]Selling South Florida[/h]

Mayor Francis Suarez of Miami is selling his city as the world’s cryptocurrency capital. “We want to be on the next wave of innovation,” he told DealBook. To make that happen, Mr. Suarez said he was “refashioning” the city’s “fun in the sun” image. Thanks in part to the mayor’s marketing efforts, tech and finance titans have flocked to Miami during the pandemic.

Visions of Bitcoin City. Last month, the Republican mayor suggested Miami pay municipal workers and accept tax payments in Bitcoin, as well as invest city funds in the cryptocurrency. Local officials have agreed to study the proposals. The notion made him popular in the crypto community, advancing his rebranding campaign. His efforts have also won him campaign donations from tech investors, attracted money to cultivate Miami’s burgeoning tech sector and may soon pay a big county bill.

The cryptocurrency exchange FTX is seeking naming rights for the city’s N.B.A. arena, currently known as AmericanAirlines Arena. Miami-Dade County took over branding deals in 2018 and is supposed to pay the team $2 million per year, sponsor or no (American’s contract ended in 2019). The FTX agreement is nearly final, pending a Friday vote by county commissioners. “It’s awesome that we’ve attracted a huge cryptocurrency exchange,” Mr. Suarez said, noting that FTX’s bid “complements the brand” that Miami is establishing.

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It would be the N.B.A.’s first crypto sponsorship of an arena, The Miami Herald notes, but it would also tie a county revenue stream to a relatively young exchange and C.E.O. FTX was founded in 2019 and is run by Samuel Bankman-Fried, a 28-year-old billionaire who was one of the biggest donors to President Biden’s campaign.

The tech center exodus and crypto boom converge in Miami. The pandemic prompted people to relocate to Florida from Silicon Valley and New York as Bitcoin gained legitimacy and value. The mayor sees the trends as interrelated, and he is seizing the moment. “People come here and start realizing that there’s way more tech talent than they thought,” he said.

All that’s missing is a regulatory scheme, Mr. Suarez said: Lawmakers are modeling Florida’s approach on Wyoming’s crypto policies. Ultimately, the success of the mayor’s effort won’t be apparent until it’s clear that people are making their moves permanent and maintaining their enthusiasm for crypto if — or when? — there is another market downturn.

[h=3]HERE’S WHAT’S HAPPENING[/h]

Not so fast, AstraZeneca. American officials said early today that the company may have included “outdated information” from a U.S. clinical trial of its Covid-19 vaccine, providing “an incomplete view” of data that could cast doubt on promising news.

President Biden’s next big spending plan begins to take shape. Economic advisers are assembling a $3 trillion package, beginning with a huge infrastructure proposal. It will go beyond roads and bridges to also address climate change and racial and gender equity.

Microsoft will ease workers back to the office starting next week. The 57,000 employees who left the tech giant’s Redmond, Wash., headquarters because of the pandemic can choose to work from the office, home or both.

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BlackRock investigates allegations of employee misconduct. The money-management giant hired a law firm after employees said that they had faced harassment and discrimination over their sex, race and religion. A senior executive, Mark Wiedman, apologized for making inappropriate comments at work events.

Goldman Sachs’s C.E.O. promises to ease the burden on junior bankers.David Solomon told employees that the firm would better enforce a ban on working Saturdays and hire more analysts, after a presentation by first-year bankers that described 100-hour work weeks drew media attention.

[h=2]Personnel is policy. Or is it?[/h]

Though she lost the Democratic presidential primary, Senator Elizabeth Warren is exerting considerable sway over President Biden’s financial policies, judging by the number of people from her orbit who have been picked to join the administration. But her influence is increasingly being tested, The Times’s Alan Rappeport writes.

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Ms. Warren has seeded the administration with former staffers, in line with her oft-professed belief that “personnel is policy.” They include Adewale Adeyemo, who’s up for deputy Treasury secretary, and Rohit Chopra, the nominee to lead the Consumer Financial Protection Bureau. Bharat Ramamurti is already serving as deputy director of the National Economic Council.

She is continuing to roll out ambitious progressive economic proposals,including an “ultra-millionaire tax” and a “real corporate profits tax” that would raise rates on the wealthy and on big businesses. “People like progressive ideas and want to see them enacted,” she told Alan. “Washington is beginning to catch up.”

But she hasn’t won every time. Mr. Biden has rejected an expansive cancellation of student debt, an idea she championed, and appears unconvinced about her wealth tax idea. Treasury Secretary Janet Yellen has also expressed skepticism about the wealth tax, and recently hired Natasha Sarin — whose work with Larry Summers has raised eyebrows within Team Warren — as an economic policy adviser.

Ms. Warren is hopeful she’ll ultimately prevail on some issues, like the wealth tax. “It’s easy to implement,” she said. “We just need to sit down and talk about it.”

[h=2]“It’s more a speculative asset that’s essentially a substitute for gold, rather than for the dollar.”[/h]

— Federal Reserve chair Jay Powell on Bitcoin and other cryptocurrencies.

[h=2]Korean battery makers do battle in Georgia[/h]

The state of Georgia is caught in the middle of an intellectual property dispute between two South Korean manufacturers of batteries for electric vehicles. The International Trade Commission recently ruled in favor of LG Chem in a trade secrets case against SK Innovation, issuing a default judgment based on a problematic absence of documentation. SK says its partially built factory in Georgia is threatened by the decision.

The case could “seriously undermine critical progress on the climate crisis,” Sally Yates, former U.S. deputy attorney general, told DealBook. She argues that it’s in the public interest to reverse the I.T.C.’s decision. The commission’s only penalty is exclusion — an order barring infringing products from the U.S. market, although SK can fulfill existing obligations to Ford and VW. (Another recent dispute between Korean firms resulted in a ban on imports of a Botox competitor.) But a federal court could order SK to submit to monitoring and impose damages, if warranted, “without killing jobs and setting back the Georgia economy,” Ms. Yates said.

Automakers will need lots of batteries for electrical vehicles, and the decision could make American manufacturers less competitive, said Carol Browne, the former Obama administration “climate czar.” President Biden signed an executive order last month aimed at strengthening the domestic supply chain, including for EV batteries, and “one way to guarantee that is domestic production,” Ms. Browne said.

“The Georgia plant will not sit idle,” countered LG’s lawyer, David Callahan of Latham & Watkins. LG’s attorneys say SK exaggerates the order’s impact on American manufacturing and minimizes its I.P. violations. SK can “redesign” or settle, they suggested, but in any case “the demand for these batteries ensures that another manufacturer will step in” if it abandons the plant. (The Botox dispute was ultimately settled.)

The Biden administration can veto the I.T.C. by early April. Gov. Brian Kemp of Georgia has urged the president to do so, citing a 2013 reversal of a ruling in a dispute between Apple and Samsung. (The administration did not respond to a request for comment). Gov. Mike DeWine of Ohio — where LG is constructing a battery plant with General Motors — has asked the president to uphold the ruling, saying that “stolen intellectual property” shouldn’t be used to compete with his state’s workers. Mr. Biden is visiting Ohio today.

[h=3]THE SPEED READ[/h]

Deals

The social media platform Discord has held talks to sell itself to Microsoft in a deal that could top $10 billion. (NYT) WeWork said it lost $3.2 billion last year — less than in 2019 — in an investor presentation supporting its potential merger with a SPAC. (FT) Box, the online storage provider, is reportedly considering a sale as it faces pressure from the activist investor Starboard Value. (Reuters)

Politics and policy

President Biden formally nominated Lina Khan, a critic of Big Tech, to the Federal Trade Commission. (NYT) Sweden will link aircraft landing fees to greenhouse gas emissions, encouraging the use of newer, more efficient planes. (Reuters) Shalanda Young is the front-runner for the nomination to lead the Office of Management and Budget, but Asian-American groups are pushing for Nani Coloretti, a former Obama administration official. (WaPo)

Tech

Cybersecurity researchers at the University of Toronto say TikTok isn’t a national security threat. (WSJ) Companies including Mastercard and SoftBank pressed Group of 7 governments to coordinate tech issues like A.I. and cybersecurity. (FT) The C.E.O. of a blockchain tech company won an auction of Jack Dorsey’s first tweet — sold as a nonfungible token — for $2.9 million. (CNBC)

Best of the rest

Ellen DeGeneres has faced a steep ratings decline, losing more than a million viewers after reports of a toxic workplace at her show. (NYT) Should workers be paid while they sleep? (FT) Americans over 65 are fully vaccinated, and ready to party. (NYT)

Thanks for reading! We’ll see you tomorrow.

We’d like your feedback! Please email thoughts and suggestions to dealbook@nytimes.com.

Thank you for your support. Want to share The New York Times? Friends and family can enjoy unlimited digital access to our journalism with this special offer.

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Andrew Ross Sorkin, Founder/Editor-at-Large, New York @andrewrsorkin

Jason Karaian, Editor, London @jkaraian

Michael J. de la Merced, Reporter, London @m_delamerced

Lauren Hirsch, Reporter, New York @LaurenSHirsch

Ephrat Livni, Reporter, Washington D.C. @el72champs

 

[Bozzie]

Read in Browser​ ​ LISTEN TO TODAY'S PODCAST AVAILABLE AT 8AM ON: ​ ​ ​ Top News GameStop gets real​ ​ ​ After months of market speculation at its utmost, GameStop (NYSE:GME) will give investors something concrete to consider for its stock valuation when it releases earnings, revenue and more details about its business transformation plan today. GameStop investors will be glued to their screens after the bell on Tuesday as the video game retailer releases results after the bell (the conference call is scheduled for 5:00 p.m. ET). The report follows two months of wild trading and a "meme stock" craze that resulted in an epic short squeeze earlier in the year. It all started when subreddit r/WallStreetBets convinced an entire community of traders to scoop up shares of GameStop and other heavily shorted public companies, triggering losses at major hedge funds, unprecedented brokerage limits, congressional hearings and the development of some Hollywood productions. By the numbers: The earnings report means that GameStop's financial performance and fundamentals are returning to center stage. Analysts expect adjusted earnings of $1.42 per share and $2.23B in revenue, which would mark a rise of 1% over the same period last year and an end to an eight-quarter losing streak. The figures will likely be bolstered by a winter holiday shopping season that included the release of next-generation consoles like the PS5 and Xbox Series X. "The fourth quarter is generally their moneymaking quarter," said Telsey Advisory Group analyst Joe Feldman, though he cautioned that GameStop previously disclosed sales that fell 3.1% for the nine-week holiday period ending January 2. While the pandemic was a boon for the video game industry, GameStop has struggled with foot traffic to its brick-and-mortar stores, which currently number 4,800. The company initially resisted closing its doors early in the pandemic, saying it was an essential business, before putting a greater focus on e-commerce. It has also been up against a years-long trend of people downloading games over the internet, rather than buying hard copy discs. GameStop shares are now trading around the $200 level, which is more than 10x as much as they were at the start of 2020, though the stock did hit a peak of $483 during intraday trading in late January. Outlook: Some say the company might be too late in the game to insulate itself against long-term industry changes, though others point to turnaround efforts that are underway. Ryan Cohen, the co-founder of Chewy, was recently added to the company's board, while Matt Francis, a former engineering leader at AWS, was brought on as GameStop's first-ever chief technology officer. GME is rated with four Holds and three Sells on Wall Street, but that has never stopped the retail crowd and others from buying in. (31 comments) ​ Covid Another AstraZeneca concern arises​ ​ AstraZeneca (NASDAQ:AZN) may have provided the U.S. outdated information that gave an "incomplete" view about the efficacy of its vaccine, according to the U.S. Data Safety and Monitoring Board. "The DSMB expressed concern that AstraZeneca may have included outdated information from that trial, which may have provided an incomplete view of the efficacy data. We urge the company to work with the DSMB to review the efficacy data and ensure the most accurate, up-to-date efficacy data be made public as quickly as possible," the National Institute for Allergy and Infectious Diseases, headed by Dr. Anthony Fauci, said in a statement. "The last thing this vaccine needs is more concern when we kind of thought we were at that point now where we’d put to bed all the other concerns, and then a new one pops up the same day," Paul Griffin, an associate professor of medicine at the University of Queensland, told Bloomberg. The European Medicines Agency issued a statement last week that the benefits of the vaccine still outweigh the risks, despite the link to "rare blood clots with low blood platelets." AstraZeneca shares rose 4% on Wall Street yesterday after U.S. trial data showed a 79% efficacy rate. (11 comments) ​ M&A Microsoft wooing Discord​ ​ Microsoft (NASDAQ:MSFT) is in talks about a possible $10B purchase of video game chat platform Discord, according to several published reports. No deal is imminent, and Discord is talking to other potential suitors and could still decide to eschew a sale and go public. Discord has more than 100M active users and would likely fit well with Microsoft’s Xbox business. Discord moved above $100M in revenue last year and raised $100M in a $7B valuation. (6 comments) ​ Sponsored By Invesco Invesco QQQ is proud to be the official ETF of the NCAA®.​ ​ ​ Learn more about the potential diversity of Invesco QQQ ETF—and enjoy some hoops with Grant Hill—in our immersive NCAA experience.​ Energy Big Oil tilts to carbon pricing​ ​ In a video conference meeting today with Biden administration officials, executives from 10 of the biggest oil companies, including Chevron (NYSE:CVX) CEO Mike Wirth, offered support for putting a price on carbon emissions as a way to address greenhouse gas emissions that contribute to climate change. The meeting reportedly focused on emissions of methane from oil and gas production and on the industry's role in the administration's plans to decarbonize the U.S. economy. Some execs from U.S. companies warned that the wrong policies would hurt U.S. producers and potentially increase demand for imports of fuel produced abroad under weaker environmental protections. In a statement, the White House said national climate adviser Gina McCarthy "made clear that the Administration is not fighting the oil and gas sector, but fighting to create union jobs, deploy emission reduction technologies, strengthen American manufacturing, and fuel the American economy." (85 comments) ​ Tech Channel checks boost iPhone optimism​ ​ Wedbush's supply chain checks in Asia have come out bullish, with three weeks of no changes to builds or demand globally, and no issues arising from current global semiconductor shortages. And that likely means builds for iPhones this quarter have stayed in the 56M-62M range, it says. The firm is buying the dip on Apple (NASDAQ:AAPL) - not entirely a surprise - on expectations the momentum will continue, and has a Street-high price target. Along with that March quarter forecast, analyst Daniel Ives thinks June quarter builds are basically unchanged in the mid-40M range, meaning the firm's supercycle thesis is playing out in the first half of this year. "We have not seen a robust launch uptrend such as this in a number of years for Apple and the only iPhone trajectory similar would be the iPhone 6 in 2014 based on our analysis," he writes. The rest of the Street may be expecting about 220M iPhones this year, but based on the current trajectory, Wedbush expects a bull case would be selling "north of 240M" or even 250M units, which would break the record of 231M units sold in fiscal 2015. It estimates 350M of 950M iPhones worldwide are in the window of an upgrade opportunity, marking an "unprecedented supercycle upgrade cycle." (21 comments) ​ Bonds Treasury yields still sliding​ ​ The 10-year Treasury yield is down 3 basis points to 1.65% after dropping yesterday. It's now about 10 basis points down from the high it hit last week. The 30-year, down 2 basis points to 2.36%, saw its first back-to-back down sessions since mid-February. "The interest rate move is looking increasingly mature and should see a meaningful decrease in 'speed' moving forward, even if absolute direction remains pointed to generally higher rates/steeper curves," SG Cowen said. But tech stocks, which have seen an inverse relationship with yields, are edging lower. Nasdaq 100 futures (NDX:IND) -0.2% are off along with S&P futures (SPX) -0.2% and Dow futures (INDU) -0.3%, which have been hampered by cyclical weakness on down-yield days. Later today, Fed chief Jay Powell and Treasury Secretary Janet Yellen will face lawmakers in congressional testimony about the economic response to COVID. It will be their first joint testimony as they appear before the House Financial Services Committee. A third wave of COVID that is leading to renewed lockdowns in Europe, and a concern about rising U.S. cases that has paused some reopening plans, could be weighing on stocks and helping bonds as recovery and growth optimism ebbs. New York is now pausing plans to boost restaurant capacity to 50%. Germany is going into a hard lockdown over Easter. ​ Sponsored By Invesco ​ What else is happening... Researchers from the University of Toronto and WSJ pit Tesla (NASDAQ:TSLA) and Toyota (NYSE:TM) head-to-head on environmental impact.Apple (NASDAQ:AAPL) reveals the retirement of its head of developer relations disclosure ahead of its trial against Epic.Regeneron’s (NASDAQ:REGN) COVID antibody cuts risk of hospitalization or death by 70%.Canadian Pacific Railway’s (NYSE:CP) takeover offer for Kansas City Southern (NYSE:KSU)boosts hope for expanded access to U.S. Gulf Coast refineries for Canadian oil producers.Citi expresses confidence that a crackdown on sharing streaming passwords will gain traction, helping offset billions of dollars of losses for companies like Netflix (NASDAQ:NFLX).******* Kodak (NYSE:KODK) is gaining in extended-hours trading as traders passed around a company blog post about one of Europe's largest online print shops.​ ​ Monday's Key Earnings Newtek Business Services (NASDAQ:NEWT) +5% PM after boosting 2021 dividend forecast.​ Today's Markets In Asia, Japan -0.6%. Hong Kong -1.3%. China -0.9%. India +0.6%. In Europe, at midday, London -0.2%. Paris -0.5%. Frankfurt -0.4%. Futures at 6:20, Dow -0.4%. S&P -0.4%. Nasdaq -0.3%. Crude -3.4% to $59.48. Gold -0.1%at $1736.90. Bitcoin -5% to $54555. Ten-year Treasury Yield -4 bps to 1.64% ​ Today's Economic Calendar 8:30 Current Account 8:55 Redbook Chain Store Sales 9:00 Fed's Bullard: U.S. Economy and Monetary Policy 10:00 New Home Sales 10:00 Richmond Fed Mfg. 10:10 Fed's Bostic Speech 11:00 Fed's Barkin Speech 12:00 PM Powell's Testimony On Coronavirus Aid, Relief, and Economic Security Act 1:00 PM Results of $46B, 2-Year Note Auction 1:00 PM Money Supply 1:25 PM Fed's Brainard Speech 2:45 PM Fed's Williams Speech 3:45 PM Fed's Brainard Speech 4:20 PM Fed's Bullard Speech Companies reporting earnings today »​

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[Bozzie]

Global Market Comments March 23, 2021 Fiat Lux Featured Trade: (NOW THE FAT LADY IS REALLY SINGING FOR THE BOND MARKET), (JPM), (BAC), (C), (FCX), (TLT), (UBER)

​ Now the Fat Lady is REALLY Singing for the Bond Market The most significant market development so far in 2021 has not been the epic stock market rebound, the nonstop rally in bank stocks (JPM), (BAC), (C), or the ballistic move in copper prices (FCX), although that is quite a list.Far from it. It has been the utter collapse in the bond market, which has seen the (TLT) plunged a gut-punching $25 in only 11 weeks. Since the beginning of this year, the yields on ten-year US Treasury bonds have more than doubled, from 0.89% to 1.75%. I love it when my short, medium, and long-term calls play out according to script. I absolutely hate it when they happen so fast that I and my readers are unable to get in at decent prices. That is what has happened with my triple short call for the (TLT), which has been performing a near-perfect swan dive since January 6. The move has been enough to boost me into spectacularly positive numbers for 2021, some 40.63%. Of the 40 trade alerts I have issued so far this year, nine were bonds shorts, all of them profitable. Lucky borrowers who demanded rate locks in real estate financings in October are now thanking their lucky stars. We may be saying goodbye to the 2% handle on 5/1 ARMS and the 30-year fixed for the rest of our lives. The technical damage has been near-fatal. The writing is on the wall. A 2.00% yield for the ten-year is now easily on the menu for 2021, if not 2.5% or 3.0%. This is crucially important for financial markets, as interest rates are the wellspring from which all other market trends arise. Wise thinkers are peeved that the promised bleeding of federal tax revenues is causing the annual budget deficit to balloon from a low of a $450 billion annual rate in 2016 to $4 trillion last year and over $5 trillion in 2021. Add in the bond purchases from the Fed’s new promise of $1.5 trillion in quantitative easing and you get true government borrowing of $6.5 trillion for 2020. It will all end in tears for bond and US dollar holders. With a massive infrastructure budget just ahead of us, that number could soar to a staggering $8.5 trillion by the end of the year. Weimar Republic, eat your heart out! (Millennials please Google this). It is all a short seller’s dream come true. As rates rise, so do the debt service costs of the world’s largest borrower, the US government. The burden will soar in a hockey stick-like manner, currently at 5% of the total budget. What is of far greater concern is what the tax bill does to the National Debt, taking it from $28 trillion to $34.5 trillion over the next year, a staggering rise of 50%. Even Tojo and Hitler couldn’t get the US to buy that much during WWII. Better teach your kids to drive for UBER early, as they are the ones who are going to have to pay off this gargantuan debt. That is if (UBER) is still around. So what the heck are you supposed to do now? Keep selling those bond rallies, even the little ones. It will be the closest thing to a rich uncle you will ever have, if you don’t already have one writing you big checks every month. Make your year now because the longer you put it off, the harder it will be to earn. ​ ​ ​ ​ ​

Quote of the Day"All men dream, but not equally," said T.E. Lawrence, known as Lawrence of Arabia.

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[Bozzie]

March 24, 2021

Good morning. (Was this newsletter forwarded to you? Sign up here.)

[h=2]More questions than answers[/h]

The bull market is now a year old, with the S&P 500 up nearly 75 percent from its low point at this time last year. That recovery, The Times’s Matt Phillips writes, is “a testament to the unbridled enthusiasm that let investors shrug off the economic carnage of the pandemic and buy stocks — and pretty much anything else.” The factors that have stoked the rally also raise questions about whether it can last.

Is this a bubble?

Analysts are wary of using the B-word to describe the market as a whole, despite the best 12-month stretch for stocks since the 1930s. But John D. Turner, a finance professor who wrote “Boom and Bust: A Global History of Financial Bubbles,” is convinced: “If I had to put money on it, it looks like a bubble,” he told The Times. A bubble has three key ingredients, he said: ease of trading, access to credit and mass speculation — all of which are in ready supply. All that’s missing is a spark. What could it be?

Can retail traders keep this up?

A surge in individual traders — who have access to commission-free online trading apps, government “stimmy” checks and lots of downtime — has become one of the biggest forces in stock markets. A big test of this trend’s durability will come if and when Robinhood, which filed confidentially to go publicyesterday, begins trading itself. Can the brokerage — whose C.E.O. faced tough questions from lawmakers and several lawsuits over its halting of trades — endure the scrutiny of public market investors when it opens its books?

What’s going on at GameStop?

Few investors beyond true believers think that the surge in the video game retailer’s stock — which was up 1,700 percent at one point in January — is justified by the fundamentals of its business. That’s why the company’s first earnings release since the frenzy was a hotly anticipated event on Tuesday. Attendees left with plenty of unanswered questions, mainly because GameStop executives provided no financial guidance and, unexpectedly, skipped a Q.&A. Here are a few:

The company said it would consider selling stock “to fund the acceleration of our future transformation initiatives.” With shares up some 900 percent from a year ago, there is scope to raise a huge amount. How ambitious will it be? There has been a lot of executive turnover at the company. Is that also happening lower in the ranks, perhaps in part because employees can cash out their suddenly more valuable shares? The Chewy co-founder Ryan Cohen, who joined GameStop’s board along with two other former Chewy executives just before the frenzy, said he aimed to turn the retailer into the “Chewy of gaming.” What do pet supplies have in common with video games?

If you have answers — or more pertinent questions about this moment in the markets — let us know: dealbook@nytimes.com.

[h=3]HERE’S WHAT’S HAPPENING[/h]

The E.U. plans to curb vaccine exports for six weeks. The bloc has drafted emergency rules to ease its supply shortages, a move that could badly affect Britain and other countries. Separately, AstraZeneca said it planned to disclose more recent trial data about its vaccine to assuage U.S. officials’ concerns.

Jay Powell plays down the risk of inflation. The Fed chair told the House Financial Services Committee yesterday that he expected the $1.9 trillion stimulus to have a “neither particularly large nor persistent” effect on inflation. Treasury Secretary Janet Yellen defended the rescue package at the hearing, and said the next bill needed to address income inequality. (They are likely to reiterate these messages at a Senate hearing today.)

Speaking of inequality … The combined wealth of American billionaires grew $1.3 trillion during the pandemic, up 44 percent from the previous year, according to a new study. During that time, 80 million Americans lost their jobs.

The Fed creates committees to study climate risks. One will identify and address the financial risks posed by climate change, while another will consider “the potential for complex interactions across the financial system,” Lael Brainard, a Fed governor, said in a speech.

Citigroup pledges more flexibility for workers. Employees can spend up to two days per week working remotely when the bank’s offices reopen, the C.E.O., Jane Fraser, wrote in a memo. As complaints by junior analysts at Goldman Sachs have generated debates about working conditions on Wall Street, Ms. Fraser also banned internal video meetings on Fridays and announced a holiday called “Citi Reset Day.”

[h=2]Two shootings, and a new push for gun control[/h]

As America grieves over two mass shootings in a week — in Atlanta and Boulder, Colo. — the inevitable question arises again: Will Washington pass new gun restrictions this time?

“This is not and should not be a partisan issue — it is an American issue,” President Biden said yesterday, adding that he was “devastated” by the killings. He urged lawmakers not to “wait another minute” in approving legislation to ban assault-style weapons and high-capacity magazines.

It’s an issue that Mr. Biden knows well: He helped pass an assault weapons ban in the Senate in the 1990s. And President Barack Obama charged him with devising gun control proposals after the 2012 Sandy Hook shootings, though those failed to gain traction.

Republicans appear opposed to sweeping new restrictions. Senator Chuck Grassley of Iowa noted that two bills proposing a modest tightening of background checks for sales — which four in five Americans support — passed the House mostly along party lines. A narrower proposal sponsored by Senator Joe Manchin, Democrat of West Virginia, and Senator Pat Toomey, Republican of Pennsylvania, is unlikely to gain a filibuster-proof majority in the Senate.

High winds and poor visibility caused the 1,300-foot cargo ship to run aground in the Suez Canal on Wednesday.Suez Canal Authority, via Associated Press

A stuck container ship could roil energy markets. The ship ran aground in the Suez Canal, blocking traffic in one of the world’s most important shipping arteries. It may take days to move the vessel, potentially forcing customers to seek alternatives to oil from the Middle East.

[h=2]Exclusive: Fanatics is now a $12.8 billion company[/h]

The sports apparel retailer Fanatics has raised $320 million at a $12.8 billion valuation, more than double its valuation this summer, DealBook hears. The round was led by Silver Lake with participation by Fidelity, Neuberger Berman, Franklin Templeton, Blackstone, Thrive Capital and M.L.B. — all existing investors.

Fanatics brings instant gratification to sports swag. Rather than purchasing jerseys in advance through a third party and guessing which team or player will be hot, Fanatics owns the rights to fan gear for the major U.S. sports teams (and some Nike merchandise). That allows it to produce hot items on demand, like LeBron James jerseys immediately after he joined the Lakers. The major sports leagues have invested in Fanatics because they want ownership — not just royalties — in a business that benefits from their brands. (Michael Rubin, the founder and executive chairman of Fanatics, is also a part-owner of the N.B.A.’s Philadelphia 76ers.)

The pandemic has been good for business. Sports came to a temporary halt, but people shopped online. Fanatics, which is profitable, generates about 80 percent of its more than $3 billion in sales online. Its e-commerce sales jumped more than 20 percent last year.

An I.P.O. is still in sight. Fanatics is considering going public via a SPAC or traditional I.P.O. this year or next. (Nothing is definite, and no formal talks are underway.) Since its last fund-raising effort, Fanatics has expanded into new product lines like hats through its acquisition of Top of the World and it started Fanatics China through a joint venture with Hillhouse Capital. It is using the money from this latest round to expand its geographic footprint and product lines, potentially through more deals.

“While an I.P.O. is clearly an available option to us, there is no update on any timeline,” Fanatics told DealBook.

This bridge can be yours for $69 million.Open Sea

[h=2]John Cleese’s blockchain-based satire[/h]

The comedian John Cleese is selling an NFT, or nonfungible token. It’s a joke — sort of. Evoking a classic con, the sale of the Brooklyn Bridge, the Monty Python actor is auctioning an authenticated digital sketch of the bridge by “The Unnamed Artist John Cleese,” with bidding running through April Fools’ Day. “I don’t make the jokes,” Mr. Cleese told DealBook. “I just point them out.”

The project highlights the hyper-commodification of art in a frenzied market. Christie’s recently held its first NFT auction, selling the work of an artist known as Beeple for $69,346,250. That’s how much Mr. Cleese is asking for the sketch if a bidder wants to “buy it now.” He’ll split the proceeds evenly with his partners: a comedy writer, an animator and a law professor doubling as crypto consultant. The highest bid is now about $36,000. “I think it’s very funny,” Mr. Cleese said. “At the same time, we might make some money.”

“Some things are worth pointing out, and some are not,” Mr. Cleese said. He said the Beeple sale was notable because it revealed a “mad world,” with people disconnected from meaningful emotional experiences, like seeing a painting at a gallery. Yet the 81-year-old also conceded that someone younger, for whom the line between the physical and digital worlds is more blurred, could have feelings about an NFT.

The art world can’t afford to dismiss NFTs, Mr. Cleese said. Nor can he. By mocking the craze, he is now implicated in the thing he finds absurd — just how he’s made a living as a comedian.

[h=3]THE SPEED READ[/h]

Deals

The insurer Hartford rejected a $23 billion takeover bid by its rival Chubb, potentially setting off a takeover battle. (Reuters) Compass, the online real estate brokerage backed by SoftBank’s Vision Fund, hopes to be valued at as much as $10 billion in its I.P.O. (Bloomberg)

Politics and policy

Charles Schwab said it was quitting the U.S. Chamber of Commerce, weeks after announcing it was shutting down its political action committee. (CNBC) Is Tom Steyer, the billionaire Democratic presidential candidate, weighing a run for California governor? (Politico)

Tech

Intel said it planned to spend $20 billion building two chip factories in Arizona, and pledged to build more processors for other companies. (NYT) Tesla will accept payment in Bitcoin, Elon Musk says. (Bloomberg) Customers of Coinbase have complained that the cryptocurrency exchange failed to help them when they were locked out of accounts or had their holdings stolen. (NYT)

Best of the rest

The C.E.O. of Levi Strauss urged Congress to pass a bill giving U.S. workers 12 weeks of paid time off for health care: “Not mandating paid leave is inexcusable.” (CNN) Prince Harry has a new job: “chief impact officer” at the Silicon Valley coaching start-up BetterUp. (WSJ) General Mills demonstrates how not to respond to a customer complaint about shrimp tails in a box of cereal. (NYT)

Thanks for reading! We’ll see you tomorrow.

We’d like your feedback! Please email thoughts and suggestions to dealbook@nytimes.com.

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[Bozzie]

​ LISTEN TO TODAY'S PODCAST AVAILABLE AT 8AM ON: ​ ​ ​ Top News Another market bottom?​ ​ ​ Shutterstock​ ​ Asian markets tumbled again overnight, while stocks in Europe dipped into the red, though things are looking more positive in the U.S. after a late selloff on Tuesday. Nasdaq futures are up by 1%, while contacts linked to the S&P 500 and Dow are ahead by 0.4%, as the latest bull market officially enters its second year. As the pandemic set in February 2020, the S&P 500 plunged nearly 34% over 22 days to a March 23 low, and it took only five months to recoup its losses. The index then went on to notch many record highs, though more recently a rotation to value has taken place, while Treasury yields remain on the minds of many traders. Some fears resurfaced on Tuesday after Chancellor Angela Merkel called the dominant U.K. variant of the coronavirus a "new pandemic" and outlined tighter shutdown measures in Germany. The Netherlands and France also extended lockdowns and imposed new travel and business curbs. While some remain concerned about the strength of the post-pandemic recovery, others are seeing a different picture. Quotes: "This is still a young bull market; this is still a young economic cycle of growth. It's going to be rocky, it's going to be choppy, it's not going to be easy. While a pickup in volatility would be normal as this stage of a strong bull market, we think suitable investors may want to consider buying the dip," said Ryan Detrick, chief market strategist at LPL Financial. Mark Haefele, chief investment officer at UBS Global Wealth Management, also expects risk assets to see more upside as the market enters a "reflation" phase of the recovery. Outlook: Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen will continue their testimony today on Capitol Hill. In their first joint appearance on Tuesday, the pair acknowledged that "asset prices are high," but said that they are not worried about financial stability and the economic recovery "looks to be strengthening." They also emphasized that the $1.9T stimulus package should not lead to a sizable increase in inflation, though if necessary, the central bank has the tools it needs to deal with rising price pressures. ​ On The Move GameStop earnings​ ​ Next rip or further selloff? Traders chose the latter after digesting GameStop's (NYSE:GME) earnings. Shares of the video game retailer plunged nearly 12% in after-hours trading on Tuesday, bringing the stock back to the $160 level. That followed a rise of as much as 10% in the minutes following earnings and a decline of 6.5% during the regular session. What happened? While the company achieved its first quarterly sales increase in two years, GameStop missed estimates on both the top and bottom lines. That dose of reality hit sentiment, but the bigger news was a secondary stock offering under consideration. "Since January 2021, we have been evaluating whether to increase the size of the ATM (at-the-market) Program and whether to potentially sell shares of our Class A Common Stock under the increased ATM Program during the course of fiscal 2021, primarily to fund the acceleration of our future transformation initiatives and general working capital needs," GameStop wrote in an SEC filing. The equity sale was not mentioned by CEO George Sherman during the Q4 conference call, which many criticized as short, abrupt and having failed to address the trading volatility of GameStop shares. The much-anticipated event also went without a Q&A session, not allowing participants to bring it up. By the numbers: E-commerce sales jumped 175% over the quarter and accounted for more than a third of GameStop's sales during the period. February comparable store sales also increased 23%, thanks to strength in hardware sales worldwide, and GameStop ended the quarter with $635M in cash and restricted cash. While the company is continuing to suspend guidance, it updated fulfillment operations to boost the speed of its delivery and services. The video game retailer also named former Amazon (AMZN) and Google (GOOG, GOOGL) executive Jenna Owens as its new chief operating officer. (29 comments) ​ Sponsored by PlantX A Digital Marketplace for the Plant-Based Community​ ​ ​ PlantX is simplifying plant-based living by providing an online marketplace for all things plant-based. The food delivery market is expected to grow to $470B by 2025, and PlantX is poised to take a piece of that by delivering plant-based products, meals, and more to their online community. Learn More​ Legislation Firearm laws and mass shootings​ ​ The gun control debate is being revived on Capitol Hill following the second U.S. mass shooting in less than a week. President Biden is urging Congress to pass legislation approved by the House earlier this month that would expand background checks, as well as fresh efforts to ban assault-style weapons and high-capacity magazines. White House spokeswoman Jen Psaki additionally told reporters that Biden is "considering a range" of executive actions that would "address not just gun safety measures but violence in communities." Fear of gun control is sending some firearm shares higher in the premarket session: Smith & Wesson (NASDAQ:SWBI) +1.5%, Vista Outdoor (NYSE:VSTO) +1.5%, Olin Corporation (NYSE:OLN) +1.7%. Backdrop: Ahmad Al Aliwi Alissa was identified by authorities as the gunman who opened fire at a King Soopers grocery store in Colorado, killing 10 people, including a Boulder police officer. The 21-year-old had purchased a Ruger AR556 (RGR) only a week prior, was found guilty of assault in 2018, and family said he may have been suffering from mental illness. Last week, a gunman also opened fire at three spas and massage parlors in the Atlanta area, killing eight people. Suspect Robert Aaron Long, another 21-year-old, later said he was motivated by a sexual addiction that was at odds with his religious beliefs. "I don't need to wait another minute, let alone an hour, to take common sense steps that will save lives in the future, and I urge my colleagues in the House and Senate to act," Biden said from the White House. Outlook: Without the support of at least 10 Senate Republicans, gun control bills have no chance of becoming law (as long as the filibuster remains intact). Many in the GOP feel the Democratic proposals would do little to address gun violence, citing Second Amendment rights and many cases where shooters successfully cleared a background check. Democratic Senator Joe Manchin, a swing vote who holds near veto power over his party's Senate agenda, also told reporters on Tuesday he does not support the House bills, but instead favors his own legislation, which would allow private sales of firearms without a background check. (16 comments) ​ Tech Chip revival​ ​ Remember the semiconductor shortage? Intel (INTC) is planning a major manufacturing expansion, which will start with a $20B investment in two new chip factories, commonly referred to as fabs (short for fabrication plants). The facilities will be located on the Ocotillo campus in Arizona, while planning and construction will begin this year. Intel also said it will act as a manufacturing partner for chip companies that focus on semiconductor design but can’t make the chips themselves, sending shares up almost 5% premarket. Thought bubble: The U.S. now accounts for about 12% of global semiconductor manufacturing capacity, down from 37% in 1990 as other countries have subsidized growth of their chipmakers. Over the past year, Intel has lost some market share and seen its stock price slip due to competition, the loss of key customers and troubles in producing next-generation chips. "We are back with a vengeance," new CEO Pat Gelsinger declared in an interview. Gelsinger also revealed that Intel's 7-nanometer chips are on track to hit a milestone in Q2 and that it plans to manufacture the majority of its products itself. However, the company will still increase its use of third-party foundries, including TSMC (TSM) and Samsung (OTC:SSNLF). Go deeper: Back in February, President Biden signed an executive order mandating a 100-day review of critical product supply chains in the U.S., including semiconductors. "Today's Executive Order, combined with full funding for the CHIPS Act, can help level the playing field in the global competition for semiconductor manufacturing leadership, enabling American companies to compete on equal footing with foreign companies heavily subsidized by their governments," Intel said at the time. (236 comments) ​ Sponsored by PlantX ​ What else is happening... Musk says you can now buy a Tesla (NASDAQ:TSLA) with Bitcoin (BTC-USD). Oil rebounds after a stuck ship blocks the Suez Canal. Pfizer (NYSE:PFE) makes progress in early-stage trials for COVID-19 pill. Same-day debut for Black Widow, Cruella in theaters and on Disney+ (NYSE:DIS). ViacomCBS (NASDAQ:VIAC) sells off amid risks in $3B share offering. Robinhood (RBNHD) reportedly files confidential paperwork to go public. Goldman (NYSE:GS), Citigroup (NYSE:C) make changes to help work/home balance. Eurozone business activity grows for first time in 6 months. Fed forms committees to explore climate risks to financial system.​ ​ Today's Markets In Asia, Japan -2%. Hong Kong -2%. China -1.3%. India -1.7%. In Europe, at midday, London -0.2%. Paris -0.2%. Frankfurt -0.4%. Futures at 6:20, Dow +0.4%. S&P +0.4%. Nasdaq +0.9%. Crude +3.2% to $59.66. Gold +0.2% at $1729.30. Bitcoin +3% to $56430. Ten-year Treasury Yield -1 bps to 1.62% ​ Today's Economic Calendar 7:00 MBA Mortgage Applications 8:30 Durable Goods 8:50 Fed's Barkin Speech 9:45 PMI Composite Flash 10:00 Powell’s Testimony on Coronavirus Aid, Relief, and Economic Security Act 10:30 EIA Petroleum Inventories 11:00 Survey of Business Uncertainty 11:30 Results of $26B, 2-Year FRN Auction 1:00 PM Results of $61B, 5-Year Note Auction 1:35 PM Fed's Williams Speech 3:00 PM Fed's Daly Speech 7:00 PM Fed's Evans Speech Companies reporting earnings today »​

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[Bozzie]

Global Market Comments
March 24, 2021
Fiat LuxFeatured Trade:(FIVE TECH STOCKS TO BUY AT THE MARKET BOTTOM),
(AAPL), (AMZN), (SQ), (ROKU), (MSFT)​

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Five Tech Stocks to Buy at the Market Bottom

I have prudently ignored investing in tech stocks for the past seven months, and justly so.Tech has been peddling hard on the business front, but the shares have been going nowhere in a hurry. Many of the leading names are down 30%-50% from their peak prices.

As a result, they are rapidly approaching value territory. When growth becomes cheap and value gets expensive, it’s time to shift from one side of the barbell strategy to the other.

I’m not saying that tech stocks have bottomed. But we are getting close, perhaps within 10% in the best names. It’s now time to lists of stocks to pounce on when the big turn inevitably comes.

Fortunately, Arthur Henry’s Mad Hedge Technology Letter has already done that job for you. See below his list of recommendations.

By the way, if you want to subscribe to Arthur’s groundbreaking, cutting-edge service, please click here.

It’s the best read on technology investing in the entire market.

You don’t want to catch a falling knife, but at the same time, diligently prepare yourself to buy the best discounts of the year.
Here are the names of five of the best stocks to slip into your portfolio in no particular order when the next downside whoosh occurs.

Remember, tech ALWAYS comes back.

Apple
Steve Job’s creation is weathering the gale-fore storm quite well. Apple has been on a tear reconfirming its smooth pivot to software services tilted tech company. The timing is perfect as China has enhanced its smartphone technology by leaps and bounds.
Even though China cannot produce the top-notch quality phones that Apple can, they have caught up to the point local Chinese are reasonably content with its functionality.

That hasn’t stopped Apple from vigorously growing revenue in greater China 20% YOY during a feverishly testy political climate that has their supply chain in Beijing’s crosshairs.
The pivot is picking up steam and Apple’s revenue will morph into a software company with software and services eventually contributing 25% to total revenue.
They aren’t just an iPhone company anymore. Apple has led the charge with stock buybacks and will gobble up a total of $200 billion in shares by the end of 2021. Get into this stock while you can as entry points are few and far between.
Oh, and their 5G phones are selling like hotcakes. Some one billion need to be replaced to bring consumers into the new high-speed 5G world.

Amazon (AMZN)
This is the best company in America hands down and commands 5% of total American retail sales or 49% of American e-commerce sales. The pandemic has vastly accelerated the growth of their business.
It became the second company to eclipse a market capitalization of over $1 trillion. Its Amazon Web Services (AWS) cloud business pioneered the cloud industry and had an almost 10-year head start to craft it into its cash cow. Amazon has branched off into many other businesses since then oozing innovation and is a one-stop wrecking ball.
The newest direction is the smart home where they seek to place every single smart product around the Amazon Echo, the smart speaker sitting nicely inside your house. A smart doorbell was the first step along with recently investing in a pre-fab house start-up aimed at building smart homes.

Microsoft (MSFT)
The optics in 2021 look utterly different from when Bill Gates was roaming around the corridors in the Redmond, Washington headquarter and that is a good thing.
Current CEO Satya Nadella has turned this former legacy company into the 2[SUP]nd[/SUP] largest cloud competitor to Amazon and then some.
Microsoft Azure is rapidly catching up to Amazon in the cloud space because of the Amazon-effect working in reverse. Companies don’t want to store proprietary data to Amazon’s server farm when they could possibly destroy them down the road. Microsoft is mainly a software company and gained the trust of many big companies especially retailers.
Microsoft is also on the vanguard of the gaming industry taking advantage of the young generation’s fear of outside activity. Xbox-related revenue is up 36% YOY, and its gaming division is a $10.3 billion per year business.
Microsoft Azure grew 87% YOY last quarter. The previous quarter saw Azure rocket by 98%. Shares are cheaper than Amazon and almost as potent.

Square (SQ)
CEO Jack Dorsey is doing everything right at this fin-tech company blazing a trail right to the doorsteps of the traditional banks.
The various businesses they have on offer make me think of Amazon’s portfolio because of the supreme diversity. The Cash App is a peer-to-peer money transfer program that cohabits with a bitcoin investing function on the same smartphone app.
Square has targeted the smaller businesses first and is a godsend for these entrepreneurs who lack immense capital to create a financial and payment infrastructure. Not only do they provide the physical payment systems for restaurant chains, but they also offer payroll services and other small loans.
The pipeline of innovation is strong with upper management mentioning they are considering stock trading products and other bank-like products. Wall Street bigwigs must be shaking in their boots.

Roku (ROKU)
Benefitting from the broad-based migration from cable tv to online steaming and cord-cutting, Roku is perfectly placed to delectably harvest the spoils.
This uber-growth company offers an over-the-top (OTT) streaming platform along with the necessary hardware and picks up revenue by selling digital ads.
Founder and CEO Anthony Woods owns 21 million shares of his brainchild and insistently notes that he has no interest in selling his company to a Netflix or Apple.
Viewers are reaffirming the obsession with on-demand online streaming content with hours streamed on the platform increasing 58% to 5.5 billion.
The Roku platform can be bought for just $30 and is easy to set-up. Roku enjoys the lead in the over-the-top (OTT) streaming device industry controlling 37% of the market share leading Amazon’s Fire Stick at 28%.
The runway is long as (OTT) boxes nestle cozily in only 40% of American homes with broadband, up from a paltry 6% in 2010.
They are consistently absent from the backbiting and jawboning the FANGs consistently find themselves in partly because they do not create original content and they are not an offshoot from a larger parent tech firm.
This growth stock experiences the same type of volatility as Square.

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Quote of the Day“No one is line dancing over the fact that the market is at 4,000. No one feels good about it. The market likes to climb a wall of worry, and the stonemason has been hard at work. So, I think we continue to grind higher,” said Jason Trennert, chief investment strategist at Strategas Research Partners.

This is not a solicitation to buy or sell securities
The Mad Hedge Fund Trader is not an Investment advisor
For full disclosures click here at:
http://www.madhedgefundtrader.com/disclosures
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[CoachCB]

AAPL has been killing me the last few months! It's down today, so I'll probably add a few shares. I'm getting killed on my "risky" stocks. This has been a big lesson-learned - in the future, I'm going to allot a certain percentage of the portfolio to 'risky' stocks and stick to it, no matter what (at least that's what I say now!).

 

[BilltheCat]

AAPL has been killing me the last few months! It's down today, so I'll probably add a few shares. I'm getting killed on my "risky" stocks. This has been a big lesson-learned - in the future, I'm going to allot a certain percentage of the portfolio to 'risky' stocks and stick to it, no matter what (at least that's what I say now!).

Hey Coach. Right now it doesn't matter where you invest, you're going to get killed. I've gotten out of so many plays these last couple of weeks it's ridiculous.
Good plan to have a budget for "risky" plays. I try to keep mine at a minimum.

Today not looking any better to start.

 

[CoachCB]

Hey Coach. Right now it doesn't matter where you invest, you're going to get killed. I've gotten out of so many plays these last couple of weeks it's ridiculous.
Good plan to have a budget for "risky" plays. I try to keep mine at a minimum.

Today not looking any better to start.

That's true Bill. Another thing I need to work on is stop-loss. I often don't want to take the loss and will add small amounts (to dollar-cost-average).....sometimes it works, sometimes it doesn't.

 

[Bozzie]

		Read in Browser​

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LISTEN TO TODAY'S PODCAST AVAILABLE AT 8AM ON: ​ ​ ​

Top News Stuck in Suez​ ​ ​ Shutterstock​ ​ Tugs and diggers have so far failed to dislodge the Ever Given, a massive container ship stuck in the Suez Canal after losing the ability to steer amid high winds and a dust storm. The best chance for freeing the ship may not come until Sunday or Monday, when the tide will reach a peak, according to Nick Sloane, the salvage master who refloated cruise ship Costa Concordia in 2012 when it capsized off the coast of Italy. In response, WTI (CL1:COM) and Brent (CO1:COM) crude prices soared nearly 6% on Wednesday as worries grew over oil shipments. Broader concerns? Supply chains have already been strained by the coronavirus pandemic, and it's been harder for suppliers to get their hands on well-priced shipping rates. If the situation in Suez continues for a significant amount of time, rates may rise along with oil prices. Multinationals could also begin worrying about disruptions to their supply chains, and any imported goods from Asia to Europe will see delays. Experts also say that if the blockage is not cleared within the next 24-48 hours, some shipping firms will be forced to re-route vessels around the southern tip of Africa, which would add roughly a week to the journey. About 12% of global trade and roughly 30% of the world’s shipping container volume transit through the Suez Canal, making it one of the world's most important waterways. A rough estimate shows the blockage is costing about $400M an hour, based on calculations from Lloyd's List. Go deeper: Supply chain disruptions have already been seen across the globe due to pandemic factors like pent-up demand for consumer goods and a growing semiconductor shortage. Difficulties in securing raw materials and other inputs have recently worsened and prompted the Biden administration to mandate a 100-day review of critical product supply chains in the U.S. The executive action issued in February is focused on semiconductors, key minerals and materials, active pharmaceutical ingredients and advanced batteries like the ones used in electric vehicles. ​ Outlook What's going on with the stock market?​ ​ Something strange is happening in the equity market. Many have recently pointed to a Treasury yield hostage situation, where stocks have largely moved in response to their fixed-income counterparts. When bond yields moved up, high-growth names sold off, but even as the rates came down over the past three days, the tech sector was still under pressure. Some are even pointing to worries about the Fed hiking rates in far-off 2023, while others are mentioning frothy valuations and a rotation into industrial names, though trading volumes in the sector have also been softer in recent weeks. Bigger picture: NYSE volumes have been 80% of the 30-day average, while Nasdaq activity has been 90% of its average, remarkably low given the declines in certain sectors. Another example: WSB/Reddit darling GameStop (GME) stumbled 34% after earnings on Wednesday, while only 23M shares changed hands, well short of the 30-day average of 34M shares. "It seems to show that the retail customer has walked away," said Matt Maley from Miller Tabak. "The question is, why? Is it higher rates? Concerns about lockdowns? Or are they betting on March Madness?" Bitcoin (BTC-USD) also fell for a fifth day against the dollar, down 6.5% to $52,819, marking its longest losing run since December. The many industry forecasts that government stimulus checks would be spent on crypto appear to be fading, while derivatives expiries are adding to volatility. All of this is on top of the record GDP growth predicted for 2021 (Yellen and Powell reiterated that on Wednesday), though there are still pandemic risks and COVID-19 hasn't gone away. Bottom line: Could traders be waiting on the sidelines for better pricing? Are there pockets of the market that are still bubbly? Possibly, especially given the extreme intraday volatility seen over the past couple of weeks. U.S. stock index futures are meanwhile ahead by 0.2% ahead of the open, but a lot can change from now until then. On the economic front, investors will pore over the Labor Department's latest report on jobless claims this morning, with another 730K Americans likely filing for unemployment. That's a drop from the 770K figure seen last week, but still a high number compared to pre-pandemic levels. ​ Sponsored By Yieldstreet Diversify Your Portfolio with Alternative Investments​ ​ ​ Generating passive income doesn’t have to be complicated. Yieldstreet lets you diversify your portfolio with investments starting as low as $1,000 allowing you to access a unique set of asset classes. You’ll also enjoy short durations and investments backed by collateral that help protect your principal. Learn more about investing in alternatives with Yieldstreet and start building your customized portfolio today.​ Global Chinese pressure​ ​ Dual-listed Chinese companies are extending losses in the premarket session, including shares of Alibaba (BABA), Baidu (NASDAQ:BIDU), JD.com (NASDAQ:JD) and NetEase (NASDAQ:NTES), after the SEC adopted the Holding Foreign Companies Accountable Act. The measure was signed into law by then-President Trump in December, before it was evident how the Biden administration would handle relations with Beijing. It now appears to be taking a similar stance against China following a tense meeting in Alaska, expanded sanctions on Chinese officials and keeping the tariffs imposed during the Trump presidency. What's the Holding Foreign Companies Accountable Act? The measure would kick foreign companies off American stock exchanges if they fail to comply with U.S. auditing standards for three years in a row. The rules also require firms prove to the SEC they are not owned or controlled by an entity of a foreign government and to name any board members who are Chinese Communist Party officials. The move by the SEC adds to the unprecedented regulatory crackdown in China on domestic tech firms. Recent reports suggest that Beijing has even proposed a state-backed joint venture to oversee data collection from e-commerce and digital payment companies. The concerns quoted were that the industry built enough market power to stifle competition, but likely signals further tightening of government control over the tech sector. Outlook: "It is quite difficult for China to open the accounting of all U.S.-listed companies to U.S. regulatory agencies, especially for some listed companies that involve national security or national data," said Everbright Sun Hung Kai strategist Kenny Ng. "After the introduction of the final amendments, it is expected that China and the United States will continue to negotiate for a period of time, and the uncertainty during this period will continue to affect the share performance of U.S.-listing Chinese companies." ​ Trending Back to the office?​ ​ For some working in essential services or consumer-facing businesses, the return to work happened long ago, but for many in those industries, hardship remains. Other parts of the economy are meanwhile debating when to return to the office, which could in turn help out other sectors like restaurants, transportation and small business. The deliberation can be clearly seen in San Francisco and Santa Clara counties, which began allowing offices to reopen in a limited capacity this week. Backdrop: For more than a year now, the offices in Silicon Valley have been largely empty as techies settled into a new normal of working from home. But as the economy slowly reopens, tech titans are figuring out next steps. At play are models of remote work, a return to the office or a hybrid of the two, though many companies are not rushing to reopen their workplaces. Cisco (NASDAQ:CSCO), Dropbox (NASDAQ:DBX) and Facebook (NASDAQ:FB) have saidtheir mandatory work from home policies will remain in effect until June, while Pinterest (NYSE:PINS) is not even eyeing a significant reopening until at least August. The reopening at Box (NYSE:BOX) and Google (GOOG, GOOGL) is still scheduled for September, but DocuSign (NASDAQ:DOCU) is waiting until at least October. Meanwhile, Adobe (NASDAQ:ADBE), ****** (NASDAQ:PYPL), Twilio (NYSE:TWLO), Twitter (NYSE:TWTR), Yelp (NYSE:YELP) and Zoom Video (NASDAQ:ZM) are staying closed, though SAP (NYSE:SAP) is strongly considering partially reopening its Bay Area offices within weeks, while Slack Technologies (NYSE:WORK) is weighing a date to invite back some workers. What it means: Employers are weighing two important forces - the need for in-person creativity and connections, as well as the flexibility and efficiency in working from home. The future may point to a combined schedule that would see employees work some days from the office and others where they desire. Interestingly enough, employees may be feeling the same. A survey late last year of 9,000 knowledge workers - commissioned by Slack - found 20% wanted to work remotely, 17% in the office, while 63% chose a mix of the two. ​ Sponsored By Yieldstreet ​ What else is happening... AstraZeneca (NASDAQ:AZN) revises Covid vaccine data with lower efficacy rate. Rite Aid (NYSE:RAD) plunges after slashing FY 2021 guidance. Nike (NYSE:NKE) faces backlash in China over Xinjiang statement. Fidelity latest to seek SEC approval for Bitcoin ETF. Is another toilet paper shortage on the way? GOP-led states sue over oil and gas leasing pause. Facebook (NASDAQ:FB) set to argue for tweaks to liability protection. Salesforce (NYSE:CRM) faces sex trafficking charges over ties to Backpage.com. SEC looks into Wall Street's blank-check IPO frenzy - Reuters. Cuomo, legislature reach deal for marijuana legalization in NY.​ ​ Today's Markets In Asia, Japan +1.1%. Hong Kong -0.1%. China -0.1%. India -1.5%. In Europe, at midday, London -0.3%. Paris -0.2%. Frankfurt -0.1%. Futures at 6:20, Dow +0.2%. S&P +0.2%. Nasdaq +0.2%. Crude -1.6% to $60.20. Gold -0.2% at $1729.70. Bitcoin -6.5% to $52819. Ten-year Treasury Yield unchanged at 1.61% ​ Today's Economic Calendar 5:30 Fed's Williams Speech 8:30 Initial Jobless Claims 8:30 GDP Q4 8:30 Corporate profits 10:10 Fed's Clarida Speech 10:30 Fed's Williams Speech 10:30 EIA Natural Gas Inventory 11:00 Kansas City Fed Mfg Survey 12:00 PM Fed's Bostic: "Measuring the Economy in a Time of COVID" 1:00 PM Results of $62B, 7-Year Note Auction 1:00 PM Fed's Evans: U.S. Monetary Policy 4:30 PM Fed Balance Sheet 7:00 PM Fed's Evans: Monetary and Fiscal Policy Companies reporting earnings today »​

 

[Bozzie]

Pretty busy here these days under and on top of an old house...To me the market normal has returned the days of easy money in the market are done for now.
It's what I like a do..Holding securities over a period of time and waiting. Fun ride, hopefully we all did well

March 25, 2021

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Larry Summers thinks an overheated economy is likely.Pool photo by Etienne Oliveau

Too much of a good thing?

With the end of the pandemic coming ever closer and the Biden administration pouring trillions into recovery initiatives, economists are debating whether the government risks going too far, stoking runaway inflation. But as our colleague Neil Irwin at the Upshot asks: How will we know if the economy is running too hot?

Economists acknowledge that some rise in inflation is inevitable, as demand for certain goods and services outstrips supply. (Other events, like strained supply chains, are also pushing up prices.) Where they disagree is over the severity of the inflation that will result:

The Biden administration and its allies think that prices will recalibrate, unemployment will fall and inflation will stabilize at a manageable level. Skeptics worry that people will believe elevated inflation is the new normal, leading to climbing prices, demands for higher wages, a weakening dollar and higher interest rates on government debt. That could prompt policymakers to intervene forcefully — and set off a recession.

Ten economists explained what the warning signs of an overheating economy would look like. A summary of common themes:

Several, like Greg Mankiw and Jason Furman of Harvard, said they would start to worry about several years of inflation above 3 percent. Others, like Austan Goolsbee of the University of Chicago and Claudia Sahm of the Jain Family Institute, are looking out for a significant acceleration in inflation, as happened in the 1970s. Wendy Edelberg of the Brookings Institution is watching for signs that people believe an economic overheating is permanent, like a housing and construction boom and high readings in the five-year, five-year forward inflation expectation rate.

Larry Summers, who recently kicked the debate into higher gear, thinks there are roughly equal odds that everything will turn out fine, that ever-rising inflation will set in and that the Fed will crash the economy to stop that from happening.

Read the economists’ full responses here.

HERE’S WHAT’S HAPPENING

AstraZeneca releases updated data on its coronavirus vaccine. The drug maker said that newer results from clinical trials had showed an efficacy rate of 76 percent, slightly lower than it reported earlier. U.S. officials had questioned why newer data wasn’t included in AstraZeneca’s original announcement. (There are still a few potential cases not yet factored into the results.)

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China considers taking more control over internet users’ data. Beijing has reportedly proposed creating a joint venture with domestic tech platforms that would oversee all of the personal information, according to Bloomberg. It comes as the Chinese government tightens the reins on tech giants like Alibaba and Tencent.

First-day pops in the prices of SPAC offerings are fading. Shares in blank-check firms had routinely jumped on their first day of trading, but nearly all of the I.P.O.s this week closed below their offer price. Supply may have swamped demand for the red-hot acquisition vehicles, which have raised nearly $100 billion this year.

The S.E.C. may be investigating SoftBank over its “Nasdaq whale” trades.The short-selling firm Plainview published a letter purportedly from the agency, obtained via a Freedom of Information Act request, that says “the investigation from which you seek records is still active and ongoing.” SoftBank has been under scrutiny over its huge market-moving bets on stock options tied to tech companies last year.

Financial firms combat employee burnout with … cash. Credit Suisse will pay junior bankers a $20,000 bonus in an acknowledgment of “unprecedented deal volume.” And amid departures of younger employees, Apollo Global Management has offered some associates up to $200,000 to stay through late 2022.

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Here we go again

Today, at noon Eastern, a trio of tech execs will be grilled by a House committeeabout how disinformation spreads on their platforms. It’s the first time the chiefs of Google, Facebook and Twitter will appear virtually before Congress during the Biden administration. It’s also the first chance for lawmakers to question the tech bosses since the Jan. 6 Capitol riot, and the role their companies played in the event is sure to be a point of discussion.

The C.E.O.s know the drill by now. A series of hearings in recent years have given the executives experience in absorbing attacks and sticking to their talking points. Since 2018, Google’s Sundar Pichai has testified three times, Twitter’s Jack Dorsey four times and Facebook’s Mark Zuckerberg six times. Their prepared testimonies hint at what is to come today, if they stick to their scripts.

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A hot topic will be Section 230, the law that shields platforms from liability for user-generated content. (Here is a handy explainer about it.) Before the hearing, researchers from Harvard and N.Y.U. presented recommendations to Congress and the White House on regulating disinformation online, including “carve-outs” to Section 230.

Facebook has long adopted the stance that it welcomes more rules. Today, according to his prepared opening remarks, Mr. Zuckerberg will say that companies should earn their right to claim protection from liability by showing that they have strong systems to monitor content. Mr. Pichai will warn that a Section 230 overhaul, or a wholesale repeal, would harm free expression on the internet.

Mr. Dorsey will not mention the controversial liability shield, based on his prepared remarks, though he is highly likely to face questions about it.

Misinformation is a life-or-death issue, according to a letter from 12 attorneys general that was sent to Twitter and Facebook yesterday, seeking help to stop the spread of vaccine misinformation. “Unfortunately,” they wrote, “misinformation disseminated via your platforms has increased vaccine hesitancy, which will slow economic recovery and, more importantly, ultimately cause even more unnecessary deaths.”

The Times’s tech team will run a live briefing from 11:30 a.m. Eastern. You can find it on our business page.

Exclusive: Greenwood aims to make banking more equitable

Greenwood, a start-up lender focused on Black and Latino customers, plans to announce today that it has raised $40 million from six of the nation’s biggest banks and other major investors. Its founders — including the entrepreneur Ryan Glover and the rapper and activist Michael Render, a.k.a. Killer Mike — are aiming to make services like checking accounts and loans more equitable.

Black and Latino customers are underserved by traditional banks. Nearly 17 percent of Black households and 14 percent of Latino households lacked basic financial services in 2017, the last year for which F.D.I.C. statistics are available, compared with 3 percent of white families. Poor access to banking services can result in more banking fees, such as A.T.M. and overdraft charges. In a Bankrate survey conducted last year, people of color reported paying more than twice as much as white respondents did in banking fees each month.

Truist, the bank formed from the merger of SunTrust and BB&T, is leading Greenwood’s fund-raising round. Vanessa Vreeland, who leads Truist’s venture arm, said the investment met its goals of investing in a natively digital banking start-up and backing minority entrepreneurs.

Greenwood itself won’t hold deposits or make loans. Instead, it will connect customers with minority deposit institutions and community development financial institutions, which will handle back-end tasks like underwriting loans. Mr. Glover said this was a way to support those lenders: “Without Black banks, there would be many in our community who would have not had any other opportunities,” he said.

The company’s first product will be a debit savings account that comes with a black metal debit card. “We’re going to make it cool to bank black,” Mr. Glover said.

“If you’re not putting more capital into diverse-led venture firms, then it is unrealistic to expect that more capital will flow to diverse-led companies”

— Marlon Nichols of MaC Venture Capital, a majority-Black-owned firm that will announce plans today for a $103 million seed fund from investors including Bank of America, Goldman Sachs and Foot Locker

The S.E.C.’s new focus draws fire

The Securities and Exchange Commission just launched a new web page on environmental, social and governance issues. It’s the latest of many recent moves by Allison Herren Lee, the acting chair, to meet investor demand for corporate accountability. Now, her actions have generated a request for more transparency from the S.E.C. itself.

Pat Toomey has questions about “the scope and intention” of the S.E.C.’s actions. The Republican from Pennsylvania, who is the ranking member of the Senate Banking Committee, wants a briefing about the agency’s newly created climate and E.S.G. enforcement task force. Also, he is curious about recent calls for more mandatory corporate disclosures on a range of issues, including political donations. The S.E.C. “should not use enforcement actions as a back door for imposing new regulations on E.S.G. and climate change issues,” the senator wrote in a letter to Ms. Lee yesterday that was shared exclusively with DealBook.

The E.S.G. activity “appears to presage major changes,” he said, noting that the Biden administration’s choice to lead the agency, Gary Gensler, has yet to be confirmed. “Changes would be premature.”

It’s part of a broader debate, with congressional Republicans pushing back against financial regulators who embrace environmental priorities, including at the Fed and Treasury. When it comes to securities, a senior aide to Mr. Toomey said, climate risks are not necessarily material to investors, depending on the type of business. The S.E.C. declined to comment.

Thank you for your support. Want to share The New York Times? Friends and family can enjoy unlimited digital access to our journalism with this special offer.

THE SPEED READ

Deals

Tribune Publishing’s board is backing a takeover bid by Alden Global Capital over a higher offer from a Maryland hotel executive. (NYT) Dan Snyder is poised to buy out minority owners of the Washington N.F.L. team for $875 million. (NYT) The Spanish-language broadcaster Grupo Televisa is in talks to combine some of its media assets with its archrival, Univision. (Bloomberg)

Politics and policy

Gov. Andrew Cuomo of New York is under scrutiny for giving family members access to Covid-19 testing in the early days of the pandemic, adding to his political troubles. (NYT) New York State lawmakers struck a deal to legalize the sale of recreational marijuana by next year. (WSJ)

Tech

Fidelity announced plans to introduce an exchange-traded fund that tracks the price of Bitcoin. (WSJ) You can buy this column about NFTs as an NFT, with proceeds going to charity. (NYT)

Best of the rest

In 25 years, the U.S. gender pay gap has shrunk by just 8 cents. (NYT) Ever-growing ship sizes mean that incidents like the blockage of the Suez Canal may become more common. (Bloomberg) Thanks to a new acquisition, you can text yourself some Taco Bell. (WSJ)

 

[Bozzie]

Global Market Comments
March 25, 2021
Fiat LuxFeatured Trade:(HOW TO EXECUTE A VERTICAL BULL CALL SPREAD)
(AAPL)
(TESTIMONIAL)
(DINING WITH THE BOTTOM 20%)​

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How to Execute a Vertical Bull Call Spread

For those readers looking to improve their trading results and create the unfair advantage they deserve, I have posted a training video on How to Execute a Vertical Bull Call Spread.This is a matched pair of positions in the options market that will be profitable when the underlying security goes up, sideways, or down a small amount in price over a defined limited period of time.

It is the perfect position to have onboard during markets that have declining or low volatility, much like we experienced in 2014, and will almost certainly see again.

I have strapped on quite a few of these across many asset classes this year, and they are a major reason why I am showing positive performance numbers for 2016.

To understand this trade, I will use the example of an Apple trade, which I executed on July 10, 2014. I then felt very strongly that Apple shares would rally into the release of its new iPhone 6 on September 9, 2014.

The same play kicked in again for the iPhone 12 release last October.

So followers of my Trade Alert service received text messages and emails to add the following position:

Buy the Apple (AAPL) August 2014 $85-$90 in-the-money bull call spread at $4.00 or best

To accomplish this, they had to execute the following trades:

Buy 25 August 2014 (AAPL) $85 calls at...............$9.60
Sell short 25 August 2014 (AAPL) $90 calls at......$5.60
Net Cost:...................................................................$4.00

This gets traders into the position at $4.00, which cost them $10,000 ($4.00 per option X 100 shares per option contract X 25 contracts).
The vertical part of the description of this trade refers to the fact that both options have the same underlying security (AAPL), the same expiration date (August 15, 2014) and only different strike prices ($85 and $90).

The breakeven point can be calculated as follows:

$85.00 - Lower strike price
+$4.00 - Price paid for the vertical call spread
$89.00 - Break even Apple share price
Another way of explaining this is that the call spread you bought for $4.00 is worth $5.00 at expiration on August 15, giving you a total return of 25% in 26 trading days. Not bad!
The great thing about these positions is that your risk is defined. You can't lose any more than the amount of capital you put up, in this case, $10,000.

If Apple goes bankrupt, we get a flash crash, or suffer another 9/11 type event, you will never get a margin call from your broker in the middle of the night asking for more money. This is why hedge funds like spreads so much.

As long as Apple traded at or above $89 on the August 14 expiration date, you would have made a profit on this trade.

As it turns out, my read on Apple shares proved dead-on, and the shares closed at $97.98 on expiration day or a healthy $8.98 above my breakeven point.
The total profit on the trade came to:

($1.00 profit X 100 shares X 25 contracts) = $2,500

This means that the position earned a 25% profit on your $10,000 investment in a little more than a month. Now you know why I like Vertical Bull Call Spreads so much. So do my followers.

Occasionally, these things don't work and wheels fall off. As hard as it may be to believe, I am not infallible.

So, if I'm wrong and I tell you to buy a vertical bull call spread, and the shares fall not a little, but a lot, you will lose money. On those rare occasions when that happens, I'll shoot out a Trade Alert to you with stop-loss instructions before the damage gets out of control.
That stop loss is usually at the lower strike price when there is still a lot of time to run to expiration, as the position still has a lot of time value remaining, and the upper strike price when there are only a few days left until expiration.
The most I have ever lost on paper with one of these vertical bull call spreads was 50% of my capital, or $5,000 on a $10,000 investment. That’s because the trade was with both long and short options which maintain time value, no matter what the market does. I also never put more than 10% of my portfolio into a single position, so the paper loss on the entire capital was only 5%.
But that was on one of the worst days in market history when the Dow Average opened down 1,300 points. As it turned out, I kept my position and ended up making the maximum profit by expiration day.
To watch the video edition of How to Execute a Vertical Bull Call Spread, complete with more detailed instructions on how to execute the position with your own online platform, please click here.

[h=2]

[/h][h=2]Vertical Bull Call Spreads Are the Way to Go in a Crazily Oversold Market[/h]​

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Thank you for your honest and well-informed article. I am going to be 86 years YOUNG in coming November and appreciate a simple jewel in this money-chasing jungle.

I would like to follow you and learn more new stuff in this fast-going and changing world. Thank you.

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Dining with the Bottom 20%Occasionally, you have to tear yourself away from your screens and get involved in the real world.

So, a recent Saturday found me driving a carload of Boy Scouts to the Oakland Food Bank, a local distributor of free meals for the poor and homeless.

I learned a long time ago that nonprofits can be the most efficient participants in an economy. They have to or die because they can’t afford to pay anyone. Look no further than the Boy Scouts which runs a million-man national organization off of the $2 a month dues contributed by its juvenile members.

The Oakland Food Bank did not disappoint.

After a brief training video, I was ushered into a vast warehouse and bluntly asked “Corn or potatoes.” No management role here. I opted for potatoes, as my somewhat large hands were ideal for picking up several spuds at once.

What I ended up doing was breaking open 50-pound bags of potatoes fresh from the farm in Idaho and repackaging them into ten-pound carriers ideal for a single family. Others were inspecting sweet potatoes, corn, and peas. My task was made all the easier by a sound system blasting vintage sixties rock music.

It is amazing that the demand for free food is so great just across the bay, or one BART stop away from the world’s wealthiest and highest paid city. The Oakland Food Bank feeds 20% of Alameda County, or about 320,000 people a day. When the federal government shut down in January, the Oakland Food Bank was there sending truckloads of meals to the nearest base to feed military families.

I learned at the recent SALT conference in Las Vegas that 50% of the country could not pay an emergency expenditure of $500. This is where the food was going.

Certainly, the organization has grown a lot since the summer of love in 1967 when I stood in long lines to get doled a cup of stew of indeterminate origin by an organization then known as the “Diggers.” San Francisco was inundated by 100,000 kids that year, camping out in Golden Gate Park and totally swamping local services.

The Oakland Food Bank is now a massive outfit bringing together 17,000 volunteers donating 103,000 hours last year to feed the hungry. Even at minimum age, the value of that labor was $824,000. Semis from throughout the west were unloading thousands of pallets of food from farms, stores, and manufacturers.

A lot of the vegetables I saw were fine, they just did not conform to the picture-perfect version that Safeway requires for its produce aisles.

A market has sprung up to meet this. The food bank buys substandard potatoes direct from farmers at ten cents a pound, versus the $1.16 a pound in supermarkets. The China trade war has also made available millions of tons of foodstuffs available at throwaway prices, from rice to almonds, or corn and soybeans.

The work became more tedious when the music shifted to contemporary pop and I was sorting my 10,000 potatoes. But then the morning shift mercifully ended, and I was left to collect my far-flung scouts.

On the way out, our organizers told us we 60 volunteers had created 15,000 meals. Everyone cheered and headed for the door. I reminded my kids that if they didn’t go to college, they too would be doing this all day, every day….for $8 an hour and no benefits. They gave me a sober look.

We’ll be back again next month. I can’t wait to see what I get to sort next.

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Quote of the Day“Getting information off the Internet is akin to trying to sweep back the ocean with a broom,” said Ray Kurzweil, director of engineering at Google.

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[Bozzie]

View in browser|nytimes.com Continue reading the main story

March 26, 2021

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Goodbye baseball, hello blank-check acquisition vehicles. Richard Perry/The New York Times

[h=2]A sporting chance[/h]

Professional athletes can sell almost anything, from soda to sneakers to car insurance. But lately they’ve used their star power to sell SPACs, the blank-check acquisition vehicles that have raised more than $90 billion this year. Amid frenzied competition for merger deals, about a fifth of SPACs launched since last year have brought athletes on board in hopes of standing out when pitching to start-ups they hope to take public, Matthew Goldstein and DealBook’s Lauren Hirsch report.

Alex Rodriguez is one of the highest-profile athletes in the SPAC business, and he stands out because unlike many of his peers merely adding their names to someone else’s SPAC, he founded his own. Slam Corp, established by the former baseball slugger and the hedge fund manager Himanshu Gulati, has met with more than 70 potential targets since it raised $500 million in a February I.P.O. Mr. Rodriguez plans to become the chief executive of whatever company it acquires. He and his business partner spoke with Lauren about their plans — below are exclusive excerpts from their conversation.

On running a public company …

Mr. Rodriguez formed the investment firm A-Rod Corp in 1996, but leading a listed company would bring a new set of responsibilities. Is he ready?

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[h=3]ADVERTISEMENT[/h]

“I think you do it collectively, you do it with the team,” said Mr. Rodriguez, pointing to his frequent communication with Mr. Gulati. And when it comes to understanding the fiduciary duties involved, he said that his long career at the Yankees brought him experience at “the ultimate public company,” where the shareholders, so to speak, were the outspoken fans of the storied franchise.

On the ups and downs of investing …

Last year, Mr. Rodriguez’s $1.7 billion bid for the Mets lost out to Steve Cohen’s $2.4 billion offer. “The silver lining for me is the trust that people put on us, and that doesn’t go to waste just because you didn’t win,” Mr. Rodriguez said, referring to himself and the pop star Jennifer Lopez, who joined him on the bid. “I think that’s something that brings tremendous credibility.”

On the S.E.C.’s warning about SPACs pitched by celebrities …

The U.S. securities regulator recently told investors not to buy shares of a SPAC simply because boldface names are attached to it. Many SPACs bring celebrities on as directors or advisers, Mr. Gulati said, and “they’re just there to kind of help them raise capital.” At Slam Corp, he said, “Alex is the C.E.O. — what he’s done at A-Rod Corp should not be understated.”

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[h=3]ADVERTISEMENT[/h]

“I just want to stand up for the athlete community, because there’s so many smart young men and women. I would be lucky to have them as partners,” Mr. Rodriguez said. “We have a reach, and it’s not just domestic, it’s global,” he said, in reference to himself and Ms. Lopez.

[h=3]HERE’S WHAT’S HAPPENING[/h]

WeWork is going public via a SPAC. The office sharing company agreed to a deal with the blank-check company BowX Acquisition that values WeWork at $9 billion. That’s less than a quarter of its valuation in 2019. The venture firm behind the SPAC counts Shaquille O’Neal as an adviser.

It may take weeks to unblock the Suez Canal. Salvagers are struggling to free the container ship that has been wedged in the vital waterway since Tuesday, creating a huge, costly traffic jam that exposes the world economy’s reliance on just-in-time supply chains.

Lawmakers get few direct answers when grilling tech C.E.O.s. At the five-hour hearing on disinformation, Twitter’s Jack Dorsey acknowledged that his platform bore some responsibility for the Jan. 6 Capitol riot, while Facebook’s Mark Zuckerberg and Google’s Sundar Pichai disagreed on whether regulatory changes were needed. Lawmakers were unimpressed: “There’s a lot of smugness among you,” said one.

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[h=3]ADVERTISEMENT[/h]

Chinese consumers boycott several foreign brands. H&M, Nike, Adidas and others face retaliation from shoppers — egged on by the Communist Party — after they joined calls to avoid using cotton produced in the Xinjiang region, where Beijing has waged a repression campaign against ethnic minorities. Shares in Chinese apparel brands with ties to Xinjiang have rallied.

Banks can resume buybacks and raise dividends this summer. After the Fed’s next round of stress tests ends in June, most institutions will be allowed to resume share repurchases and increase dividends that were frozen during the pandemic, assuming they have sufficient capital.

[h=2]A TV debut (on the public markets)[/h]

Over its nearly 20-year history, Vizio has become one of the biggest names in flat-screen TVs. But as it began life as a publicly listed company yesterday, its founder and C.E.O., William Wang, was eager to convince investors that its biggest business is in streaming on its smart TVs.

Lockdowns were good for Vizio. With people stuck at home and movie theaters closed, TVs have been in high demand: The company shipped 7.1 million units last year, up 20 percent from 2019. More important from Vizio’s perspective, it saw a 60 percent increase in accounts for SmartCast, its platform for connecting to streaming services like Apple+ and Netflix. “I think the biggest impact of the pandemic is forcing people to look at home entertainment again,” Mr. Wang told DealBook.

Why streaming is important for the company. TVs are a low-margin commodity, particularly as prices continue to fall. But Vizio is betting that its popularity — it is the second-biggest TV brand in North America by market share — can help it tap into the boom in online video services. SmartCast made up 7 percent of the company’s revenue last year, reaching 12.2 million accounts.

Becoming a smart-TV player has been challenging. In 2017, Vizio paid $2.2 million to settle charges that it collected and sold users’ data without their knowledge or consent. It doesn’t offer every streaming service — it’s missing HBO Max, for example — and faces competition from Roku, Apple TV and other smart TV makers.

The time was right for an I.P.O. Vizio tried to go public in 2015, but called it off after agreeing to sell itself to a Chinese rival (only for that deal to fall apart). Now that it makes money from both TV sales and streaming, Mr. Wang said, Vizio is more attractive to public-market investors. That said, the I.P.O. priced at the low end of its expected range, and fell 9 percent in the first day of trading. The C.E.O. put a positive spin on it: “We’re probably the leader in the space in consumer electronics. I believe sooner or later people will appreciate that.”

[h=2]In the papers[/h]

Some of the academic research that caught our eye this week, summarized in one sentence:

Brands that embrace activist causes can be punished by accusations of “woke-washing” if consumers think the moves are inauthentic or insensitive. (Laetitia Mimoun, Olivier Sibai and Achilleas Boukis)

Since the 1920s, men who belonged to Harvard’s exclusive member groups — that is, old boys’ clubs — have gained significant economic advantages. (Valerie Michelman, Joseph Price and Seth Zimmerman) The life expectancy of Americans without a college degree has been falling. (Anne Case and Angus Deaton)

[h=2]Weekend reading: How can I help you?[/h]

A few years ago, Susan McPherson, the founder of the P.R. firm McPherson Strategies, identified a growing problem. Technology was helping more people connect, yet the ties seemed superficial: Instead of seeking meaningful bonds, people appeared to be transacting, simply trading likes and follows. As a “serial connector” since before the internet, she decided to write “The Lost Art of Connecting: The Gather, Ask, Do Method for Building Meaningful Business Relationships,” which was published by McGraw-Hill Education this week.

Ms. McPherson spoke to DealBook about making connections during a pandemic that has physically estranged so many. The interview has been edited and condensed for clarity.

DealBook: Has your view of technology changed?

Ms. McPherson: The past year helped us all understand how much we miss human connection when we don’t have it. Some days I‘ve showed up at a team meeting and a part of me just felt like crying. So I’ve learned to expose more of that vulnerability and how to be more empathetic and compassionate online, which freed up my team, too. Now, I think we can be better stewards of technology and make those deep connections if we’re intentional about it.

Do you still see a problem with quantifying social networks?

If we’re using the numbers to measure our value but we’re not having deep, meaningful relationships then we don’t get the real benefits. There is data in my book that shows deep ties help people live longer and be more professionally successful. Introverts will be happy to know that it isn’t about quantity — it’s about the quality of ties. And for businesses, connectedness fosters productivity.

How do people truly connect if they’re still physically apart?

Be direct. Be intentional. Don’t think of what you’ll get. Just offer help. Indirectness is time-consuming. We’re in a state of collective grief after this difficult year. There’s no time to waste. Reach out and ask, “How can I help?” Take time to listen and follow through on what you say you’ll do. Dependability and trustworthiness are critical to meaningful connection. Don’t assume that you don’t have anything to offer someone, whoever they are, at your company or beyond.

[h=3]THE SPEED READ[/h]

Deals

Rupert Murdoch’s News Corp bought Investor’s Business Daily for $275 million, a return to acquisitions after years of sales and streamlining. (NYT) Britain’s competition watchdog is worried about the “supply of GIFs” after Facebook’s acquisition of the animated-image site Giphy. (Reuters) Are the bond vigilantes back? (NYT)

Politics and policy

The S.E.C. has opened an inquiry into the SPAC craze, asking underwriters about their risk-management processes. (Reuters)

Georgia Republicans passed sweeping voting restrictions, drawing the ire of President Biden. (NYT) The Supreme Court made it easier for consumers to sue companies, ruling that it doesn’t matter if a manufacturer has a substantial presence in the state where an injury happened. (NYT)

Tech

The crypto token linked to a Times column sold at auction for $560,000, with the proceeds going to charity. (NYT) A labor board said Tesla illegally fired a worker involved in union organizing and ordered Elon Musk to delete a threatening tweet. (NYT)

Best of the rest

“Using Shame, Lending Apps in India Squeeze Billions Out of the Desperate” (NYT) The actress Jessica Walter, who played Lucille Bluth, the martini-swilling matriarch of a dysfunctional business family on “Arrested Development,” died at 80 in Manhattan. (NYT) Will the popularity of five-star meal kits from fine-dining establishments persist after the pandemic? (Bloomberg Opinion)

Thanks for reading! We’ll see you tomorrow.

We’d like your feedback! Please email thoughts and suggestions to dealbook@nytimes.com.

Thank you for your support. Want to share The New York Times? Friends and family can enjoy unlimited digital access to our journalism with this special offer.

Continue reading the main story

Andrew Ross Sorkin, Founder/Editor-at-Large, New York @andrewrsorkin

Jason Karaian, Editor, London @jkaraian

Sarah Kessler, Deputy Editor, Chicago @sarahfkessler

Michael J. de la Merced, Reporter, London @m_delamerced

Lauren Hirsch, Reporter, New York @LaurenSHirsch

Ephrat Livni, Reporter, Washington D.C. @el72champs

 

[CoachCB]

A-Rod has an estimated net worth of over $350 million. J-Lo's is estimated at over $400 million.

 

[Bozzie]

A-Rod has an estimated net worth of over $350 million. J-Lo's is estimated at over $400 million.

Nuts... Good news is they are working on their "relationship" and will stay together for now ( 400 million reasons for Alex to make it work)......Spectral update. Nothing new, the trial is moving at a snails pace but I'm more in the pump$$$ camp.
I'd love to see more options exercised or that Canadian approval for home use.

Hope you're well CB.

 

[CoachCB]

Nuts... Good news is they are working on their "relationship" and will stay together for now ( 400 million reasons for Alex to make it work)......Spectral update. Nothing new, the trial is moving at a snails pace but I'm more in the pump$$$ camp.
I'd love to see more options exercised or that Canadian approval for home use.

Hope you're well CB.

A-Rod will either double his money in 5 to 10 years or go bankrupt. J-Lo is cheap (from stories I've heard), so she probably won't gamble as much as he does.

Yes - waiting on spectral to pop. I've added a few shares - up to around 33,000 shares (split between brokerage & Roth). I'm still down, BIG, from my peak a few months ago. Hoping for a little comeback over the next few weeks. I'm being cautious, but I'm still sitting on some risky stocks that are currently losers....hoping to get some of it back (like I said before - one of my issues is 'taking the loss').

Things are well here in DC. The weather has been great. This is one of the earlier springs I can remember here. I've already run shirtless a few times - that usually doesn't happen until April. Still hoping to make the move to Florida by June. How's the farm/house/barn going? We're going to put our cabin up for sale in May - which will be sad, but we have no use for it if we move back to Florida.

 

[Bozzie]

All good here buddy..working away on this joint.
Reframed a bathroom and installed an exterior door..building an outdoor bathtub area on a deck outside the newly framed bath.
Going 6 days a week now..I doubt I can keep the pace.
Florida sounds good right now dude. 40 and rain here.

		Read in Browser​

LISTEN TO TODAY'S PODCAST AVAILABLE AT 8AM ON: ​ ​ ​

Welcome to Wall Street Brunch, our preview of stock market events for investors to watch during the upcoming week. You can also catch this article a day early by subscribing to the Stocks to Watch account for Saturday morning delivery. Outlook Economic reports in the week ahead​ ​ ​ Shutterstock​ ​ The energy and shipping markets take center stage next week as the drama in the Suez Canal continues to play out and OPEC meets over two days to discuss output targets. Investor events are on tap for Kroger (NYSE:KR) and XPeng (NYSE:XPEV), while Micron (NASDAQ:MU) is set to report earnings. The global chip shortage will impact the deliveries reports due out from Tesla (NASDAQ:TSLA) and Nio (NYSE:NIO). Analysts expect Tesla to report about 162K deliveries for Q1 (down from a prior mark of 183K), while Nio has already reduced its quarterly guidance to 19.5K vehicles from a prior range of 20K to 20.5K vehicles. In D.C., President Joe Biden is expected to unveil a multi-trillion dollar infrastructure plan. ​ Earnings Cal-Maine Foods (NASDAQ:CALM) on March 29; McCormick (NYSE:MKC), Chewy (NYSE:CHWY), Lululemon (NASDAQ:LULU) and Blackberry (NYSE:BB) on March 30; Walgreens Boots Alliance (NASDAQ:WBA) and Micron (MU) on March 31 and CarMax (NYSE:KMX) on April 1. Lululemon (LULU) reports earnings on March 30 with analysts expecting revenue of $1.66B and EPS of $2.48 to be reported. Oppenheimer thinks the recent weakness in Lululemon is largely market driven and not reflective of underlying fundamental weakness at the company. "We are optimistic that forthcoming, positive data points from the company should underpin a gradual recovery in LULU back toward recent highs. LULU continues to represent one of our preferred re-opening plays across consumer. As we increasingly look toward prospects for post-COVID-re-opening in the US and elsewhere, we are hard-pressed to envision a better consumer play than LULU, given prospects for improving demand for clothing and now even more heightened tendencies for consumers to dress more casually and shop online," notes the firm. ​ Sponsored By Seeking Alpha Buy The Dip? Or Follow The Crowd?​ ​ ​ Get 5 Must-Read articles, straight to your inbox. “Power to Investors” is Seeking Alpha’s standard since 2004. We bring you the most popular and thought-provoking stories and in-depth coverage BY and FOR investors.Subscribe - its free »​ IPOs IPOs expected to start trading this week include Compass (COMP), Frontier Group (ULCC), Coursera (COURS), Kaltura (KLTR), Karooooo (KARO), Muliang Viagoo Technology (OTC:MULG) and Flora Growth (FLGC). Quiet periods expire on Oscar Health (NYSE:OSCR) and Innovage (NASDAQ:INNV) on March 29, while IPO lockups expire on Chindata Group (NASDAQ:CD), Yalla Group (NYSE:YALA), Boqii Holding (NYSE:BQ), Pulmonx (NASDAQ:LUNG), Mission Produce (NASDAQ:AVO) and Lixiang Education Holding (NASDAQ:LXEH).​ Dividends Projected dividend increases (quarterly): The list of companies expected to increase their dividend payouts includes Invesco Mortgage (NYSE:IVR) to $0.09 from $0.08, Watsco (NYSE:WSO) to $1.95 from $1.775 and Bank OZK (NASDAQ:OZK) to $0.28 from $0.2775.​ M&A Watford Holdings (NASDAQ:WTRE) shareholders vote on the Arch Capital Group (NASDAQ:ACGL) deal on March 30 and Magellan Health (NASDAQ:MGLN) holders vote on the Centene (NYSE:CNC) buyout on March 31. The go-shop period on the Boingo Wireless (NASDAQ:WIFI)-Digital Colony deal expires on April 2. Keep an eye open for more developments with the WeWork (WE) SPAC deal with BowX Acquisition (NASDAQ:BOWXU).​ Automotive U.S. auto sales reports will be released by some automakers next week. TrueCar forecasts total new vehicle sales will soar 42% on an adjusted basis in March to 1,460,820 units. The month's seasonally adjusted annualized rate for total light vehicle sales is an estimated 16.4M units. Excluding fleet sales, TrueCar expects U.S. retail deliveries of new cars and light trucks to be 1,260,416 units, an increase of 53% from a year ago and an increase of 10% from February. Sales by manufacturer - BMW (OTCPK:BMWYY) +80% (adjusted) to 30,562 units; Daimler (OTCPKDAIF) +13% to 21,875 units; Ford (NYSE:F) +13% to 198,748 units; General Motors (NYSE:GM) +32% to 232,535; Honda (NYSE:HMC) +75% to 140,062 units; Hyundai (OTCPK:HYMLF) +82% to 68,370 units; Kia (OTCPK:HYMLF) +23% to 57,908; Nissan (OTCPK:NSANY) +31% to 105,897; Stellantis (NYSE:STLA) +24% to 164,111 units; Subaru (OTCPK:FUJHY) +87% to 63,277; Tesla (TSLA) +76% to 24,513; Toyota (NYSE:TM) +68% to 231,965 and Volkswagen (OTCPK:VLKAF) +61% to 56,673.​ Events Major events next week include a new product launch from Xiaomi (OTC:XIACF) and update from XPeng (XPEV) on its autonomous driving expedition across China. There also Investor/Analyst Day events for Nordson (NASDAQ:NDSN), Kroger (KR) and ShotSpotter (NASDAQ:SSTI) to watch. Microsoft (NASDAQ:MSFT) will begin bringing workers back to its suburban Seattle global headquarters on March 29 as the tech giant starts to reopen more facilities it largely shuttered during the pandemic. In a post Monday on the company’s blog, MSFT indicated that it was monitoring local health data and will give the 50K headquarters workers the choice to return to the office, continue working remotely or do a combination of both. Uber (NYSE:UBER) is also opening its San Francisco offices next week to limited capacity. Credit and debit card data suggest that stimulus checks are boosting sales in certain retail categories. A list of companies named by Cowen as potential beneficiaries from stimulus spending includes Amazon (NASDAQ:AMZN), eBay (NASDAQ:EBAY), Starbucks (NASDAQ:SBUX), Tapestry (NYSE:TPR), Boot Barn (NYSE:BOOT), American Eagle Outfitters (NYSE:AEO), Nike (NYSE:NKE) and Dick's Sporting Goods (NYSE:DKS). Digital advertising platforms like Facebook (NASDAQ:FB), Google (NASDAQ:GOOG), Snap (NYSE:SNAP) and Twitter (NYSE:TWTR) are also expected to see more brands advertising aggressively to capture stimulus money. Conferences rundown: The JPMorgan 10th Annual Napa Valley Forum 2021 will feature presentations by Jazz Pharmaceuticals (NASDAQ:JAZZ), Ionis Pharmaceuticals (NASDAQ:IONS), BioMarin Pharmaceutical (NASDAQ:BMRN) and Revolution Medicines (NASDAQ:RVMD) on 3/30, as well as Kodiak Sciences (NASDAQ:KOD), Black Diamond Therapeutics (NASDAQ:BDTX), BioNTech (NASDAQ:BNTX) and United Therapeutics (NASDAQ:UTHR) on March 31. Other conferences running during the week include the Bank of America 11th Annual Global Automotive Summit 2021, the Guggenheim Healthcare Talks, Genomic Medicines & Rare Diseases Conference and the UBS Virtual Summit on Cloud & Infra Security Convergence 2021. Go Deeper: Check out Seeking Alpha's Catalyst Watch for a detailed list of events to watch​ Barron's mentions With yields on many traditional income investments near historical lows, the publication does the work of finding ten stocks for investors looking to build a retirement income stream for the long term. The long-term dividend stock list includes AT&T (NYSE:T), Coca-Cola (NYSE:KO), Consolidated Edison (NYSE:ED), International Business Machines (NYSE:IBM), Johnson & Johnson (NYSE:JNJ), Kellogg (NYSE:K), Procter & Gamble (NYSE:PG), SL Green Realty (NYSE:SLG), U.S. Bancorp (NYSE:USB) and Verizon (NYSE:VZ). Welbilt (NYSE:WBT) and H&R Block (NYSE:HRB) also land positive articles. Sources: EDGAR, Bloomberg, CNBC, The Verge, Renaissance Capital​

 

[Bozzie]

March 29, 2021

Good morning. (Was this newsletter forwarded to you? Sign up here.)

Credit Suisse warned that it could suffer “highly significant” losses from its exposure to Archegos Capital Management.Arnd Wiegmann/Reuters

[h=2]How one fund’s bad bets are roiling global markets[/h]

Credit Suisse and Nomura Holdings warned this morning that they faced huge losses from a multibillion-dollar fire sale of stocks held by just one investment firm, Archegos Capital Management. It’s the latest sign of the fragility of the global markets, and could spur more attention from regulators on the murky world of swaps and hedge fund borrowing.

What we’ve learned so far: Archegos manages the personal fortune of the former hedge fund mogul Bill Hwang, who won Wall Street’s business despite having pleaded guilty to insider trading years ago. It amassed huge positions in media giants like ViacomCBS and in several Chinese tech companies — largely with borrowed money.

The Archegos strategy included using swaps, contracts that gave Mr. Hwang financial exposure to companies’ shares while hiding both his identity and how big his positions really were. (It is also becoming increasingly apparent that several Wall Street banks lent Archegos money without knowing that others were doing the same thing for the same trades.)

Trouble for Mr. Hwang, and his banks, arose when the prices of those stocks started to fall. That prompted some of his lenders to demand cash to cover his bets. When they began to question his ability to do so, some of them, including Goldman Sachs and Morgan Stanley, seized some of his holdings and kicked off the sale $20 billion worth in huge block trades. That forced selling led to even bigger drops in the prices of those stocks, starting a vicious circle.

Credit Suisse and Nomura acknowledged being hit especially hard. Credit Suisse told investors that a “U.S.-based hedge fund” had defaulted on its margin calls, which could lead to losses that were “highly significant and material to our first-quarter results.” Nomura said that one of its U.S. arms could suffer “a significant loss” because of the forced sales. Shares in Credit Suisse were down 14 percent this morning; those in Nomura were down 16 percent.

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[h=3]ADVERTISEMENT[/h]

Goldman, on the other hand, has told investors that its potential losses are “immaterial,” having covered its exposure.

Worries about a reckoning for the markets. Some bankers told The Financial Times that Archegos’s downfall highlighted the risk of one firm taking on so much leverage from multiple banks. (It also raises fresh questions about whether the mania for meme stocks, largely attributed to day traders, was actually fueled by hedge funds jumping into the trading.)

One person who is surely paying attention is Gary Gensler: President Biden’s pick to lead the S.E.C. has been an advocate for market transparency, having argued that unregulated dark pools could cause a broader risk to the U.S. economy.

[h=3]HERE’S WHAT’S HAPPENING[/h]

The Suez Canal is close to being cleared. The 220,000-ton ship that has blocked the crucial maritime passageway was partially refloated this morning, aided by the tide. The canal authorities say they are hopeful that the vessel will be freed soon, avoiding further disruptions to global trade.

Final votes on a unionization drive at an Amazon warehouse in Alabama are due today. The monthlong battle over organizing nearly 6,000 workers — one of the biggest union elections in history — is coming to a head, though results won’t be known for several days.

President Biden plans to split his next spending bill in two. White House officials are expected to first introduce an infrastructure-focused bill that includes green-energy initiatives, The Wall Street Journal reports. In a few weeks, the administration will unveil a second proposal focused on child care and health care programs, backed by calls to raise taxes on corporations and the wealthy.

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[h=3]ADVERTISEMENT[/h]

Don’t expect a quick end to tariffs on China, a top U.S. official says. The Biden administration will probably use the Trump-era levies as pressure for further concessions, Katherine Tai, the new American trade representative, said.

Vaccine passports are gaining momentum. The Biden administration is working with private companies to create a standard version that people can show to prove that they have been fully vaccinated, The Washington Post reports. New York State is rolling out one such app this week.

[h=2]Goldman warns of investor ‘guerrilla warfare’[/h]

The Supreme Court will hear arguments today from Goldman Sachs and from pension funds over a claim that the Wall Street giant misled investors about its work selling complex debt investments in the prelude to the 2008 financial crisis. In its latest brief, Goldman makes an interesting argument: Investors shouldn’t rely on statements such as “honesty is at the heart of our business” or “our clients’ interests always come first” that appear in S.E.C. filings and annual reports.

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[h=3]ADVERTISEMENT[/h]

The case is a test of shareholders’ ability to sue over claims of investment fraud. The pension funds have sought to sue as a class over Goldman’s statements, saying that they believed the claims of honesty. Goldman has argued in its latest brief that the investors are resorting to “guerrilla warfare” and aren’t providing “serious legal arguments.” The bank says that an investor victory would lead to a barrage of future lawsuits over “general and aspirational statements” of the kind made by “virtually every public company in America.”

The Biden administration isn’t taking sides but will say today that “meritorious private securities-fraud suits” are “an essential complement” to enforcing securities laws.

How a former S.E.C. commissioner thinks the court will respond to Goldman’s arguments: “I expect the court to be troubled by the claim that companies cannot be held accountable for saying that clients come first and then acting otherwise,” Robert Jackson Jr., who served on the commission from 2018 to 2020 and is now an N.Y.U. law professor, told DealBook. (The justices probably won’t agree with the claim that making a company “mean what it says” will lead to a tsunami of meritless lawsuits, he added.) Regardless, Goldman is right that the stakes are high, he said, since the case will probably decide whether shareholders can “hold corporate insiders accountable when they tell investors one thing and do another.”

[h=2]A Passover Seder that blends trend and tradition[/h]

What made last night different from all others? A diverse group of comedians, celebrities and venture capitalists doesn’t normally gather for a virtual Passover Seder on a chat app. But that is what happened last night on Clubhouse, which hosted what was possibly the world’s first hunt for a nonfungible token version of afikomen, the broken matzo ritualistically hidden for children to find and claim a prize.

Like an NFT, an afikomen is a unique object. “It feels like a reasonable updating of tradition,” said fnnch, the San Francisco street artist who created images of broken matzo for the event. NFTs are digital assets that represent sole ownership of things that are otherwise easily replicated — in this case fnnch’s pictures. He predicted that NFTs would eventually include a technological lock preventing copies from displaying, which would make owning them much more like possessing a physical artwork.

Fnnch recently made headlines by depicting tech titans as honey bears, an image that was turned into an NFT and sold for the crypto equivalent of about $66,000.

One afikomen NFT is being auctioned off to support Value Culture, a nonprofit that sponsors art, education and spiritual projects to foster community engagement. The other was nestled within the profile of someone in the Clubhouse room and given away for free. (Hints about to how to find them lay in the Passover tale that is traditionally told at a Seder.)

Value Culture’s founder, Adam Swig, came up with the reimagined Passover ritual, which was produced by Randi Zuckerberg, sister of Mark Zuckerberg. Guests included the actress Tiffany Haddish, the comedian Tehran Von Ghasri and the Clubhouse investors Marc Andreessen and Ben Horowitz. More than 3,000 people were in the room at the height of the event, which lasted four hours instead of the scheduled two.

[h=2]March market madness[/h]

The annual college basketball championship — and betting bonanza — known as March Madness has been full of upsets, on both the men’s and women’ssides, blowing up many brackets.

If you no longer have hope of winning the office pool, here’s another contest to think about: March’s maddest markets. We’ve come up with a mini-tournament of seeded matchups to determine which mania is the most manic.

How would you bet? Let us know: dealbook@nytimes.com.

Stonks division

No. 1 SPACs vs. No. 4 penny stocks

Blank-check firms are the hottest thing going right now, peaking at just the right moment. But penny stocks have been here before and always bring their A game during a good market frenzy.

No. 2 Tesla vs. No. 3 GameStop

Tesla’s cars may run on batteries, but its stock is powered by Elon Musk’s tweets, and its market value has risen 500 percent over the past year. But the “Technoking” may be out-memed by the mall retailer GameStop, up 4,000 percent over the same period thanks to an army of emoji-loving supporters(which includes … Mr. Musk.)

Satoshi division

No. 1 Bitcoin vs. No. 4 central bank digital currencies

The original cryptocurrency has stumbled of late, but it’s never wise to count it out. (Mr. Musk is a fan, too.) Its more buttoned-up counterpart, which is big in China but not so much in the U.S., has promised more than it has delivered.

No. 2 NFTs vs. No. 3 Dogecoin

Nonfungible tokens, which have conjured millions of dollars from screenshots, are a force to be reckoned with. But so is the digital token that started as a jokeand is now worth well over $6 billion. (And, yes, Mr. Musk is a fan.)

Thank you for your support. Want to share The New York Times? Friends and family can enjoy unlimited digital access to our journalism with this special offer.

[h=3]THE SPEED READ[/h]

Deals

News Corp agreed to buy the consumer arm of the educational publisher Houghton Mifflin Harcourt. (News Corp) The Swiss billionaire Hansjörg Wyss has teamed up with a Maryland hotel developer to bid for Tribune Publishing, challenging a takeover offer from Alden Global Capital. (NYT) Robinhood and SoFi are planning to give some of their customers access to I.P.O.s before they start trading. (Bloomberg)

Politics and policy

Senator Amy Klobuchar, Democrat of Minnesota, on her efforts to tighten antitrust enforcement of the tech industry: “It’s on us as a democracy to get a hold of what’s going on in the internet.” (Sway) A group of Silicon Valley moguls — including Ron Conway, Reid Hoffman and Laurene Powell Jobs — are urging Californians to reject an effort to recall Gov. Gavin Newsom. (Axios)

Tech

Fintech start-ups that are taking on Wall Street giants are having a moment. (NYT) Amazon is reportedly hitting back hard against critics like Senators Bernie Sanders and Elizabeth Warren at the behest of Jeff Bezos. (Recode) “On Google Podcasts, a Buffet of Hate” (NYT)

Best of the rest

Leon Black plans to step down as chairman of MoMA, days after announcing he will give up the same position at Apollo Global Management. (NYT) Female journalists report being increasingly harassed online, forcing their publications to issue public statements defending them. (Vanity Fair) A $25 million donation to offer San Francisco students free day care and summer school has become another flash point over the tech industry’s philanthropy. (Recode)

Thanks for reading! We’ll see you tomorrow.

We’d like your feedback! Please email thoughts and suggestions to dealbook@nytimes.com.

Continue reading the main story

 

[Bozzie]

never know what's happening behind the curtain

https://news.yahoo.com/billions-secretive-derivatives-center-archegos-102415242.html