Intersting thoughts

[Bozzie]

August 27, 2021

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Apple’s App Store policies are under scrutiny.EPA, via Shutterstock

[h=2]Apple’s App Store accommodation[/h]

When Apple settled a lawsuit yesterday brought by a group of small app developers, it represented a shift in the balance of power in an app ecosystem that the tech giant has long tightly controlled. Just how much of a shift is up for debate.

What did Apple agree to?

Developers will now be allowed to tell customers, via email and other channels (but still not inside apps), about alternative payment methods that avoid Apple’s commissions. Apple framed this as a major concession, although it selectively enforced the rule before. It agreed not to raise the 15 percent commission that Apple collects from small app developers on customer purchases for at least three years. It will set up a $100 million fund for payouts to developers who made less than $1 million a year from Apple’s app store in the past few years. They will be eligible for payouts between $250 and $30,000 each. It will publish an annual report on the number of apps it rejects or removes from its App Store, as well as data on its search results.

Does this change anything? Perhaps little for developers, but for Apple it might be a lot. Developers had already been pushing their customers to circumvent Apple’s commissions, and the settlement officially blesses that arrangement. Seen through the lens of Apple’s other legal troubles, the settlement could be strategically shrewd, easing the threat of more government action, and shifting Washington’s focus to other tech giants who have been less willing to make similar concessions.

Apple still faces a broader lawsuit about its App Store from Epic Games (the maker of Fortnite), with both companies awaiting a decision from a federal judge. The Supreme Court has also allowed other antitrust class actions against Apple to move forward. Notably, yesterday’s settlement is subject to approval by the same judge who is presiding over the Epic Games and consumer suits against Apple.

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[h=3]HERE’S WHAT’S HAPPENING[/h]

“We will not forgive, we will not forget.” President Biden vowed to hunt down those responsible for two explosions at the Kabul airport that killed at least 13 American service members and more than 60 Afghan civilians. The attacks add to the chaos in Afghanistan after the Taliban takeover and ahead of the final withdrawal of U.S. troops next Tuesday.

China reportedly puts a freeze on I.P.O.s abroad. New rules in the works from China’s securities regulator, sources told The Wall Street Journal, would stop Chinese companies with sensitive consumer data from listing outside of China. The purported move underscores Beijing’s determination to limit the ambitions of its homegrown tech firms. Separately, China’s Supreme Court called the 996 work culture — working 9 a.m. to 9 p.m., six days a week, which is common in the country’s tech industry — illegal.

The U.S. Supreme Court lifts a federal ban on evictions. The ruling will end the moratorium, which was set to expire in October, unless Congress acts to put in a new ban. The decision, which three liberal justices dissented from, is a blow to efforts to keep up to 11 million people in homes while states (slowly) disburse rental aid.

In other housing news, California advances a zoning law to open suburbs to development. To ease a housing shortage, state lawmakers voted to allow two-unit buildings on lots that for generations were reserved for single-family homes. Similar rezoning battles are happening nationwide, often pitting housing advocates against homeowners.

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The Long-Term Stock Exchange gets its first listings. Two tech companies, Asana and Twilio, listed their shares on the upstart exchange, which is designed to discourage short-term thinking and promote an embrace of all stakeholders, not just shareholders. The companies are already listed on the N.Y.S.E., making the move largely a technicality, but the exchange hopes others will be encouraged to list there. The exchange has gotten off to a slow start since it was first conceived a decade ago.

Anne Finucane, a Wall Street pioneer, is stepping down from her post at Bank of America.Simon Dawson/Bloomberg​

[h=2]End of an era at Bank of America[/h]

Two of the architects of Bank of America’s recovery after the financial crisis, who helped chart a new path for the banking industry as a whole, are headed for the exit.

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Yesterday, Bank of America announced that Anne Finucane, the bank’s vice chair and one of Wall Street’s most powerful women, and Thomas Montag, the bank’s chief operating officer, would retire at the end of the year. Their departures also open the door for new leadership at the country’s second-largest lender, The Times’s Lananh Nguyen reports.

Finucane was a pioneer on Wall Street, for many reasons. She joined Bank of America C.E.O., Brian Moynihan, who once joked that “we all report to Anne,” leaned heavily on Finucane in the wake of the financial crisis to rebuild the bank’s image, which had become intertwined with subprime lending.

Under Finucane, 69, Bank of America emerged as one of the more forward-thinking firms in finance, leading the way on environmental, social and governance issues, which Finucane promoted long before most bankers took them seriously. She articulated the bank’s position when it stepped back from financing companies that make military-style assault rifles in 2018, and when it stopped lending to private prison companies in 2019.

Montag, who came from Merrill Lynch, was crucial to restoring the firm’s Wall Street arm after the crisis. Montag, 64, who maintained a hard-driving culture, is a polarizing figure. During the pandemic, some employees felt pressure to be in the office even as other banks embraced (or at least tolerated) remote work.

In an email to staff, Finucane said she planned to continue to work on how banking can do more to fight climate change. “She’s been one of the leaders in helping to open people’s eyes” to what companies can do on climate, said John Kerry, President Biden’s climate envoy and a former chair of the bank’s advisory council.

While neither Finucane or Montag were likely in line to replace Moynihan, 61, their retirements will kick off a reshuffling of the executive ranks that will send a signal about who will lead the bank next. “Let the jockeying begin,” said Mike Mayo, a Wells Fargo analyst who has tracked the bank for decades.

[h=2]“The competitive advantage crypto has that most people haven’t understood yet is that we just have more fun.”[/h]

— Cuy Sheffield, Visa’s head of crypto, on the payment giant dabbling in NFTsand other projects in the blockchain industry.

[h=2]Media moves[/h]

As digital media companies vie for growth, many are looking to scale through deals. Two well-known brands announced mergers yesterday, while a third revealed a shake-up. Here’s the rundown:

Politico sold itself to Axel Springer, the German publishing giant that owns Insider and Morning Brew, for more than $1 billion, according to sources. A key attraction for the buyer: Politico’s subscription service, which generates more than half its $200 million in annual revenue. Robert Allbritton, who helped found Politico in 2007, will remain publisher, and the company will operate separately from Springer. The deal could quash Springer’s talks to acquire Politico’s competitor Axios. “Why would you consider any other alternative?” Springer’s C.E.O., Mathias Döpfner, told employees at a town hall meeting.

Forbes said it would go public via SPAC, in a deal valuing it at $630 million. Founded as a magazine in 1917, the outlet is mostly digital these days, although it still publishes a print edition eight times a year in the U.S. The Forbes family sold a majority stake to Integrated Whale Media in 2014.

Vice announced layoffs and a shift to video. The site, which has had its own SPAC discussions, cut nearly 20 full-time jobs, mostly writers and text editors, as it shifts its emphasis to video.

[h=2]What will Jay Powell say today?[/h]

Not long ago, many market watchers had marked today as a crucial date on the calendar. Jay Powell, the Fed chair, is set to deliver his annual remarks at the Jackson Hole research conference, where U.S. central bank officials often unveil important policy shifts. It seemed like the moment when the Fed chief would announce the start of a tapering of the central bank’s $120-billion-per-month bond purchases, but now it looks like it won’t be as momentous as that.

With coronavirus cases on the rise, endangering the economic recovery, many believe it’s premature for the Fed to make a major shift in its stance. The Jackson Hole symposium itself was forced to switch to a virtual format just a week ago. Powell’s speech is scheduled for 10 a.m. Eastern, and you can watch it here.

Here’s what some expect from the event …

“Two to three months ago, people were expecting the whole taper plan at Jackson Hole,” Priya Misra of TD Securities told The Times. “Now, it’s more the economic outlook that people are struggling with.” “You don’t want to rush through tapering or rush into rate hikes when Delta is still a threat,” Brett Ryan of Deutsche Bank told Bloomberg. “Currency markets are overwhelmingly positioned for a snoozer,” Karl Schamotta of Cambridge Global Payments told Reuters.

… and what could be left unsaid:

The timing of tapering. “The longer Powell waits to detail his own thinking, the greater the challenges to maintaining Fed unity, and the bigger risk that the central bank will be forced into a more disorderly slamming of the policy brakes down the road,” wrote Mohamed El-Erian in an opinion article for The Financial Times. The Fed’s role in inequality. The theme of the Jackson Hole gathering is “Macroeconomic Policy in an Uneven Economy,” and Karen Petrou of Federal Financial Analytics told DealBook that “uneven is a euphemism for unequal.” She’d like Powell to acknowledge how the Fed contributes to economic unevenness and adopt a different approach. But with Powell’s term as chair expiring in February, she said he’s likely to stick to vague statements, “shadowboxing” his way to renomination.

Want to share The New York Times with your friends and family? Invite them to enjoy unlimited digital access to our journalism with this special offer.

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

Deals

Brazil’s Nubank, backed by Berkshire Hathaway, is aiming for an I.P.O. valuation over $55 billion, which would make it one of the world’s largest fintech companies. (Reuters) Evergrande, the Chinese developer struggling with debts, is poised to sell off assets to shore up its finances. (Bloomberg) The top two shareholders in the Nasdaq-listed Chinese social media company Joyy want to take it private in a deal that could be worth $8 billion. (Reuters)

Policy

Former President Donald Trump is being sued by a group of Capitol Police officers who served during the Jan. 6 riot, the first suit to accuse Trump of working in concert with far-right extremists to disrupt the transition of power. (NYT) Calls are growing to discipline doctors who spread misinformation about the coronavirus. (NYT) Peloton is facing multiple investigations of how it handled a recall following the death of a child and other injuries connected to its treadmills. (CNBC)

Best of the rest

Will Elizabeth Holmes tell her side of the Theranos story at her trial? (WSJ) Tesla wants to sell electricity to Texas, a filing with the state’s utility commission shows. (CNBC) “The Social-Media Stars Who Move Markets.” (WSJ) Why Mastercard is getting rid of the magnetic stripe on its cards. (Yahoo Finance) “Who runs Twitter’s @Twitter?” (Bloomberg)

Anna Schaverien contributed reporting.

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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[CoachCB]

Yesterday was my birthday....and this happened:

I went to the gym this afternoon. While I was working out I got a text from Chase saying there was a possible fraudulent charge on my credit card (this has happened to me before while at the same gym). I walk to the locker room...and my locker is busted open, gym bag stolen - which contained my wallet. Inside the wallet: 2 credit cards, 2 debit cards, Florida DL, military ID, concealed carry permit, and $330 cash (I was supposed to go visit a cousin tomorrow, so I took out $200 today, and I always carry a "emergency hundy" in the back of the wallet). They stole my car keys....and my spare key is in the safe....in Florida. Wife is overnighting my spare key tomorrow along w/ my passport. I'm going to try to get a new military ID tomorrow. Citi is overnighting a new credit card. I have to call the bank tomorrow to get a new debit card. What a sh*tshow! Great f*cking birthday!!

I was able to get a new retired military ID today, but I have to go in-person to get a new Florida DL. I just hope I don't get pulled over anytime soon. Hopefully the cop is understanding. I have a picture of my DL saved on my phone. I get one of the credit cards fedex'd tonight, but the debit cards aren't here until next week.

 

[Bozzie]

man....Sorry CB that sucks...happy belated Birthday buddy.

Hopefully you got some calibration in someplace.

Top News Shutterstock​ U.S. stocks spent most of the week inching up as investors waited for Federal Reserve Chairman Jerome Powell’s Jackson Hole speech on the economy, specifically hoping for clues on the Fed’s plan to taper asset purchases. That muted activity changed on Friday when Powell said the central bank could start tapering its purchases of Treasury bonds and mortgage-backed securities by the end of the year. In Friday’s trading, the Nasdaq advanced 1.2%, the S&P 500 gained 0.9% and the Dow rose 0.7%. For the week, the Nasdaq added 2.8%, while S&P increased 1.5%, and the Dow went up 1.0%. The 10-year Treasury yield fell almost 5 basis points on Friday, but ended the week at 1.31%, up almost 5 basis points from a week ago. Crude oil had a strong week, gaining 10% to $68.72 per barrel. By S&P 500 industry sector, Energy turned in the best performance, rising 4.9%, Financials followed with a 2.8% increase, and Consumer Discretionary drove up 2.7%. The lagging sectors for the week were Consumer Staples, down 1.5%, Utilities, off 0.9%, and Real Estate, falling 0.8% Outlook A new gig The battle over the gig economy is far from over. Last year, companies like Uber (NYSE:UBER), Lyft (NASDAQ:LYFT), DoorDash (NYSE:DASH), Postmates (POSTM) and Instacart (ICART) sunk $200M into Proposition 22, which exempted them from treating drivers as employees in California. Instead, the app-based businesses promised new protections to workers, such as giving drivers 30 cents a mile driven to account for gas and other vehicle costs, healthcare subsidies for drivers who work 15 hours or more a week and occupational accident insurance coverage while on the job. Fast forward: While California voters ended up passing the measure with an overwhelming majority, a new ruling from California Superior Court Judge Frank Roesch said treating drivers as independent contractors was unenforceable. The effort broke the state constitution by unfairly limiting the power of the Legislature in regards to workers' compensation and collective bargaining. He also declared that Proposition 22 hampered the state legislature's authority and its ability to pass future legislation, which is unconstitutional. Uber, Lyft and other gig companies don't need to immediately change their way of doing business, but the ruling complicates their efforts to preserve their independent worker models. It's also a setback in their years-long fight which culminated in the most expensive ballot measure in the history of California. The companies had hoped to establish a "third type" of employment, in which drivers are treated as contractors but are given more benefits under certain conditions. Response: "We believe the judge made a serious error by ignoring a century’s worth of case law requiring the courts to guard the voters' right of initiative," said Geoff Vetter, a spokesman for the companies' Proposition 22 campaign. "This outrageous decision is an affront to the overwhelming majority of California voters." Proponents of the plan are already saying they will appeal the court's decision and the group is fighting to get a similar measure enacted next year in Massachusetts. Sponsored By World Gold Council Sponsored By World Gold Council Get all the latest insights and research on gold investing with our reports, analysis, and interviews with industry experts. Leverage gold data with our cutting-edge online tools. Discover the strategic advantages of gold. Visit Goldhub from the World Gold Council. Covid Unvaccinated premiums Vaccine mandates are spreading across the U.S., especially after the FDA issued full approval of a jab from Pfizer-BioNTech (PFE, BNTX). The Pentagon on Wednesday even ordered military troops to begin vaccinating immediately and the measures against the unvaccinated are expanding even in the corporate sphere. While some firms have been strict in their requirements, others have taken a lighter tone, like denying fitness rooms, free coffee or other perks. Levies are coming: As the more infectious Delta variant circulates nationwide, the airline known by the same name is taking a more punitive approach toward getting its staff inoculated. Starting Nov. 1, Delta Air Lines (DAL) will raise health insurance premiums for unvaccinated employees by $200 a month, in a move that is reminiscent of what some companies already do for smokers. Delta says the surcharges are to cover higher COVID costs, with the average hospital stay due to the virus costing the carrier $50,000 per person. CEO Ed Bastian also noted that vaccine holdouts represented 100% of hospitalizations. Delta's unvaccinated employees will face other restrictions as well, including indoor masking effective immediately and weekly COVID tests starting Sept. 12. Earlier this year, Delta stopped short of instituting an outright vaccine mandate, requiring only new employees to provide evidence of a jab, unlike rival United Airlines (UAL). By the numbers: 75% of Delta's workforce is already vaccinated against the coronavirus, so it will be interesting to see if the policy has any effect on the 25%, or about 17,000 workers. A $200 drawdown per paycheck a month would result in an annual cost of $2,400 for that employee. Tech Someone tell Putin Following a year that was marred by some high-profile cyberattacks, including the SolarWinds (SWI) and Kaseya breach, Colonial Pipeline hack, and supply disruption at meatpacker JBS (OTCQX:JBSAY), President Biden is calling in the big boys. The CEOs from Apple (AAPL), Microsoft (MSFT) and Amazon (AMZN) headed to the White House on Wednesday afternoon to discuss efforts in beefing up cybersecurity. Following the meeting, which also included top players in the finance and insurance industries, Google (GOOG, GOOGL) and Microsoft (MSFT) pledged a combined $30B over five years to deliver more advanced cyber tools, as well as training hundreds of thousands of Americans in technical fields. Backdrop: Last month, the White House issued a National Security Memorandum that was meant to help the private sector establish new standards in beefing up their cybersecurity strongholds. Given the order's primary objective of defending U.S. critical infrastructure, it makes sense that "infrastructure" will be high up on the list of today's conversation. Reports also suggest that the executives are likely to discuss how software can drive better security in the supply chain. "What I think is more likely, if we're going to end up in a war - a real shooting war with a major power - is going to be the consequence of a cyber breach of great consequence, which is increasing exponentially in terms of capabilities," Biden warned back in July. Cyber stocks are also in focus ahead of today's security summit. Statistics: According to Check Point Software's (CHKP) Mid-Year Security Report, there were 93% more ransomware attacks in the first half of 2021 than in the same period last year. In addition, the attacks were marked by the rise of "Triple Extortion" ransomware, whereby hackers steal data and threaten to release it unless a payment is made, as well as going after the target's customers or vendors in the same way. IBM estimates data breaches now cost companies $4.24M per incident on average, with costs rising 10% compared to 2020. Real Estate Eviction friction Ending protections for millions of Americans who have fallen behind on their rent, the U.S. Supreme Court dissolved the pandemic-related federal moratorium on residential evictions in a 6-3 vote (it was set to run until Oct. 3). A coalition of landlords and real estate associations brought the case against the Biden administration, which had acknowledged that the legal odds of the ban were on shaky ground earlier this month, but said it was worth pursuing as it would allow more time to distribute more than $45B in rental assistance. Disappointed by the latest Supreme Court decision, the White House urged states, local governments, landlords and cabinet agencies to "urgently act" to help stop evictions. Quote: "It would be one thing if Congress had specifically authorized the action that the CDC has taken. But that has not happened," the court said in an unsigned opinion. "It strains credulity to believe that this statute grants the CDC the sweeping authority that it asserts. If a federally imposed eviction moratorium is to continue, Congress must specifically authorize it." The eviction moratorium was put in place under the Trump administration during the onset of the pandemic and aimed to shield tenants who missed monthly rent payments from being forced out of their homes (they still owe back rent). It was originally set to expire on Dec. 31, 2020, but Congress stretched the order until late January, and it was then extended several more times under the Biden administration. While the moratorium has protected tenants nationwide, it has also resulted in financial hardships for landlords. Property owners, which say they are losing $13B a month in unpaid rent, are still liable for taxes, insurance and maintenance costs tied to their real estate. Homebuying is also expensive: Housing prices have only continued to escalate in 2021, driven by historically low interest rates, savings accumulated during lockdowns and a desire for more space as people work from home. That has triggered increased demand, while supply has lagged due to material prices and labor shortages. In fact, the price of the typical U.S. home rose 13.2% over the past year, per Zillow, marking a record rise since the firm started collecting data in 1996. More supply may help put a lid on a prolonged period of price growth, which if left alone might eventually turn into an unsustainable boom that could push activity into reverse. Central Banking Powell takes the stage All eyes were on Fed Chair Jerome Powell as he spoke at the central bank's annual economic symposium in Jackson Hole. Powell stuck mostly to the Fed's July meeting minutes in his virtual speech. He stated that the U.S. economy is making progress toward the Federal Reserve's twin goals of full employment and price stability, meaning the central bank is considering reducing its purchases of Treasury bonds and mortgage-backed securities. The Fed will continue to hold the target range for the federal funds rate at its current level until the economy reaches conditions consistent with maximum employment, and inflation has reached 2 percent and is on track to moderately exceed 2 percent for some time. The timing and the pace of the coming reduction in asset purchases won't be a direct signal for the timing of an interest rate liftoff, he noted. That will require a more stringent test Remarks from the U.S. Federal Reserve's hawkish wing arrived earlier in the week when Dallas President Robert Kaplan said he believes the economic recovery warrants tapering to commence in October, St. Louis's James Bullard called for a start in the fall, while Kansas City's Esther George said a move should be made sometime this year (none of them vote on policy in 2021). Go deeper: A divergence of opinions among FOMC members was already seen in minutes from the Fed's July meeting, with "most" officials preparing to reduce the $120B in monthly asset purchases this year, though "several" thought the move should wait until 2022. For his part, Powell has said the central bank is "a ways off" from meeting the threshold for tapering. There also might be some other subjects to focus on in Jackson Hole, given this year's topic: "Macroeconomic Policy in an Uneven Economy." In a note last week, HSBC's Steven Major argued that a discussion of income inequality could potentially have an effect on bond yields, saying "economic inequality is one of the longer-run structural drivers that has contributed to rates being so low." ​ U.S. Indices Dow +1.% to 35,456. S&P 500 +1.5% to 4,509. Nasdaq +2.8% to 15,130. Russell 2000 +5.1% to 2,278. CBOE Volatility Index -11.7% to 16.39. S&P 500 Sectors Consumer Staples -1.4%. Utilities -2.1%. Financials +3.5%. Telecom +2.8%. Healthcare -1.2%. Industrials +2.2%. Information Technology +1.4%. Materials +2.6%. Energy +7.3%. Consumer Discretionary +2.6%. World Indices London +0.9% to 7,148. France +0.8% to 6,682. Germany +0.3% to 15,852. Japan +2.3% to 27,641. China +2.8% to 3,522. Hong Kong +2.3% to 25,408. India +1.4% to 56,125. Commodities and Bonds Crude Oil WTI +10.3% to $68.72/bbl. Gold +2.% to $1,820.3/oz. Natural Gas +14.6% to 4.413. Ten-Year Treasury Yield -0.2% to 133.89. Forex and Cryptos EUR/USD +0.85%. USD/JPY +0.05%. GBP/USD +1.08%. Bitcoin +0.4%. Litecoin -3.1%. Ethereum +0.6%. Ripple -4.1%. Top Stock Gainers Support.com Inc (NASDAQ:SPRT) +199%. Trillium Therapeutic (NASDAQ:TRIL) +184%. Vinco Ventures Inc (NASDAQ:BBIG) +121%. Takung Art Ltd (NYSE:TKAT) +115%. Gambling.com Group Ltd (NASDAQ:GAMB) +111%. Top Stock Losers Cassava Sciences Inc (NASDAQ:SAVA) -44%. Theravance Bio Ord (NASDAQ:TBPH)-41%. Selectquote Inc (NYSE:SLQT) -37%. Owlet Inc (NYSE:OWLT) -37%. Flora Growth Corp (NASDAQ:FLGC) -26%. Where will the markets be headed next week? Current trends and ideas? Add your thoughts to the comments section. Seeking More Seeking Alpha’s Wall Street Breakfast Podcast Seeking Alpha's Wall Street Breakfast podcast brings you all the news you need to know for your market day. Released by 8:00 AM ET each morning, it is a quick listen that you can put on as you get ready to start your working day.​

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[Bozzie]

August 28, 2021

Good morning. As companies debate whether to require coronavirus vaccines for employees, it is adding complexity to the hiring process. In today’s DealBook, we look at how vaccination has increasingly become a qualification for getting a new job.

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Illustration by the New York Times; photos by Marco Bello/Reuters and Antonio Lacerda/EPA

[h=2]Unvaccinated need not apply[/h]

By Lauren Hirsch Reporter, DealBook

If you want to get a job at Leslie’s, a pool and spa retailer with more than 900 stores across the country, you need to be vaccinated against the coronavirus. The company, which employs more than 5,000 people, never publicized the policy, but job applicants will find it among the requirements there.

Leslie’s is one of a growing number of employers that now ask for proof of vaccination from job candidates, alongside the usual qualifications like education and experience. Most, like Leslie’s, say they will make exceptions for health and religious reasons.

After the Food and Drug Administration granted full approval to the Pfizer-BioNTech coronavirus vaccine this week, such mandates are expected to become more common. That creates uncharted territory for both employers and job seekers, with privacy, politics and health intruding into the already intense process of filling — or landing — a new job.

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The share of job ads that require new hires to be vaccinated have nearly doubled in the past month, according to the job-search site Indeed. (These remain a small fraction of overall listings, however.) LinkedIn is “exploring new ways” for job seekers to learn more about companies’ vaccine requirements, said Suzi Owens, a spokeswoman for the site.

Companies are devising vaccination policies for new hires along with rules for their existing employees, and those aren’t always the same. Many employers are willing to impose stricter guidelines for applicants — Leslie’s requires vaccinations for all new hires but not all existing employees. Making vaccination a requirement for getting a job could encourage those who are reluctant, or it could further solidify the class divide, as vaccination rates fall largely along socioeconomic lines. (Or both.)

Corporate vaccine mandates have divided the country. In a recent Gallup poll, 52 percent of workers said they were in favor of mandates (36 percent “strongly”), versus 38 percent who were opposed (29 percent “strongly”). Even companies that don’t require inoculations are making it increasingly difficult to remain unvaccinated: Delta Air Lines said this week that unvaccinated employees would be required to pay a $200-a-month surcharge to stay on the company health plan, starting in November. These shifting, and increasingly stringent, policies will inevitably become a more routine feature in job interviews.

Verifying the vaccine status of job applicants “is taking a lot of time and resources for employers, unfortunately,” said Dr. Neal Mills, the chief medical officer at the professional services firm Aon, who is already advising companies on their options. There is a “continuum” of ways to check someone’s status, he said, from a simple attestation to proof of vaccination on an app that syncs with Centers for Disease Control and Prevention databases.

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If unvaccinated candidates apply for jobs that require time in the office, even only occasionally, “some companies say they’re just not able to hire them for the role,” said Dawn Fay, a senior district president in New York for the recruiting firm Robert Half. She has also worked with companies that tell unvaccinated candidates that “you’ll be remote as long as you can” but subject to testing, masking and distancing rules if or when they go to the office.

And it’s not just a company’s own vaccine policy that recruiters need to take into consideration. Goldman Sachs announced this week that it would require proof of vaccination for anyone entering its U.S. offices. That filters down to clients, contractors and others who do business with Goldman, and firms with similar policies.

Goldman declined to comment on whether it plans to ask candidates about their vaccination status in job interviews, or if that status will be a factor in hiring decisions.

[h=2]‘I don’t want any of those people working for me’[/h]

The companies that now require vaccination for job applicants run the gamut.

Ormat, an energy company based in Nevada, requires vaccination for a job as a welder. The National Football League says it’s mandatory for a job as a freelance seasonal art director. Good Relations, a “lovers boutique” in California, requires it for a job as a sales associate.

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Melinda Myers, the chief executive of Good Relations, said the requirement was in part a response to high Covid-19 infection rates in Eureka County, where the retailer is based.

“Our hospitals are full,” she said. “There’s a lot of anti-vax people at the farmers market. And then we also have conservative political people who are anti-vaxxers. And I don’t want any of those people working for me.”

She didn’t require proof of vaccination for her staff of six, who she said were all fully vaccinated. “I know these people well enough to know they were telling me the truth,” Ms. Myers said. But she will verify the status of new hires “because I don’t know them,” she said.

Job seekers who oppose vaccine mandates have begun to tailor their searches accordingly. The conservative social media website Gab started a No Vax Mandate Job Board, which had about 31,000 members as of Friday. A job website called Red Balloon began last month to “connect employers who value freedom with employees who value it too.”

“We’re taking a stand against this mandatory vaccine trend,” Red Balloon’s founder, Andrew Crapuchettes, said in a YouTube video. “In today’s tight labor market, there are good companies with strong work cultures who want to hire dedicated employees regardless of their health care choices.”

Stephen Gare, a network technician in Florida, started a group on LinkedIn for employers and unvaccinated people to connect. “I’m concerned that there could be a lot of people not wanting to get vaccinated that would be out looking for a job,” Mr. Gare said.

Mr. Gare, who is not vaccinated, is not currently looking for a job but may have to if his company introduces a vaccine mandate, he said. “I would do whatever it takes to live without getting the vaccine,” he said.

It is legal for employers to require vaccines for both current and new employees. And labor lawyers say that companies are allowed to take vaccination status into consideration in most of the country when screening job applicants, even if no formal mandate is in place, because vaccination status is not protected under the Americans With Disabilities Act. But they could still be hit with litigation or run into political opposition as some states pass measures to restrict or ban vaccine mandates.

“You’re going to see that the career trajectories of people will be impacted based on their status,” said Ian Schaefer, a partner at the law firm Loeb & Loeb who specializes in labor issues and has been advising companies on their Covid policies. “And so far, that’s completely permissible.”

[h=2]‘Part of the prescreening process’[/h]

The biggest hurdle to vaccine mandates in some industries is the shortage of labor. Few large retailers, for example, have announced mandates for frontline workers over fears of mass departures. And as businesses ramp up for the holiday rush, mandates for new hires have also been rare.

Walmart will offer vaccinated hires in its stores the same $150 it gives to current employees who get the shot, the company said, but it will not require applicants to be vaccinated to get a job. A spokesperson for Target said the retailer wouldn’t take vaccination status into consideration when vetting candidates.

Whether an applicant’s vaccination status matches up with an employer’s policy “is becoming part of the prescreening process,” said Amy Glaser, an outsourcing lead at the recruitment firm Adecco. She estimates that one in three calls that her recruiters in Jacksonville, Fla., a Covid hot spot, have fielded from candidates has included questions about vaccine policies. But with corporate policies changing so quickly, a company’s stance at the beginning of the recruitment process may change by the end.

Gabriela Elliott, who works for the county government in San Diego, has been looking for other jobs as she prepares for her temporary position to come to an end. She has been looking for a professional role, in any industry.

“I’ll take whatever I can get with full-time benefits,” she said.

While Ms. Elliott isn’t planning on putting her fully vaccinated status on her résumé, she may bring it up in conversations with recruiters if the time seems right.

“In an interview, I think, I might be able to sneak it in,” she said, “if, you know, I thought it might make a difference.”

Want to share The New York Times with your friends and family? Invite them to enjoy unlimited digital access to our journalism with this special offer.

What do you think? Should companies require new hires to be vaccinated? Let us know: dealbook@nytimes.com.

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

Jason Karaian, Editor, London @jkaraian

Sarah Kessler, Deputy Editor, Chicago @sarahfkessler

Stephen Gandel, News Editor, New York @stephengandel

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

Lauren Hirsch, Reporter, New York @LaurenSHirsch

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

 

[Bozzie]

Global Market Comments August 27, 2021 Fiat Lux Featured Trade: (AUGUST 25 BIWEEKLY STRATEGY WEBINAR Q&A), (ROM), (EEM), (FXI), (DIS), (AMZN), (NFLX), (CHPT), (TLT), (TBT), (AAPL), (GOOG), (WPM), (GOLD), (NEM), (GDX), (X), (SLV), (FCX), (BA), (HOOD), (USO)

​ August 25 Biweekly Strategy Webinar Q&ABelow please find subscribers’ Q&A for the August 25 Mad Hedge Fund Trader Global Strategy Webinar broadcast from The Atlantis Casino Hotel in Reno, NV. Q: How does a 2X ProShares Ultra Technology ETF (ROM) February 2022 vertical bull call spread on the ROM look? Would you do $110-$115 or $115-$120? A: I would do nothing here at $112.50 because we’ve just gone up 10 points in a week. I’d wait for some kind of pullback, even just $5 or $10 points, and then I would do the $110-$115. I’m leaning towards more conservative LEAPS these days—bets that the market goes sideways to up small rather than going ballistic, which it has done for the last 18 months. Think at-the-money strikes, not deep out-of-the-money on your LEAPS from here on for the rest of this economic cycle. The potential profits are still enormous. The only problem with (ROM) is that the longest maturities on the options are only six months. Q: How do you recommend entering your long-term portfolio? A: I would use the one-third rule: you put on ⅓ now, ⅓ higher or lower later on, and ⅓ higher or lower again. That way you get a good average price. Long term, everything goes up until we hit the next recession, which is probably several years off. Q: I keep reading that the Delta variant is a market risk, but I don’t think that investors will look through this. Is Delta already priced into the shares? A: Yes, what is not priced into the shares is the end of Delta, the end of the pandemic—and that will lead to my “everything” rally that I’ve been talking about for a month now. And we have already seen the beginning of that, especially with the price action this week. So yes, Delta in: dead market; Delta out: roaring market. Q: Do you think there will eventually be a rotation into emerging markets (EEM), or has the virus battered these markets too much to even consider it? A: Sometime in our future—not yet—the emerging markets will be our core holding. And the trigger for that will be the collapse of the dollar, which is hitting an interim high right now. When the greenback rolls over and dies, you can expect emerging markets, especially China, to take off like a rocket. That’s going to be our next big trade. I don't know if it will be this year or next year but it’s coming, so start doing your emerging market research now, and keep reading my newsletter. Q: Is the coming tax hike a problem for the stock market? A: No, I don’t think so. First off, I don’t think they’re going to do a tax bill this year; they don’t want anything to interfere with the 2022 election, so it may be next year’s business. Also, any new taxes are going to be overwhelmingly focused on billionaires, carried interest, offshoring, and large corporations. The middle class, people who make less than $400,000 a year, will not see any tax hike at all, possibly even getting some tax cuts via restored SALT deductions. So, I don't really see it affecting the stock market at all. Q: What do you think about Chinese stocks (FXI)? A: Long-term they’re okay, short term possibly more downside. Interestingly, the bigger risk may not be China itself and how the government is beating up its own tech companies, but the SEC. It has indicated they don’t really like these offshore vehicles that have been listed on the New York Stock Exchange, and they may move to ban them. I’m not rushing into China right now, only because there are just so many better opportunities in the US stock market for the time being. I may go back in the future—it’s a case where I’d rather buy them on the way up than trying to catch a falling knife on China right now. Q: Do you expect any market impact from the Jackson Hole meeting? A: Yes, whatever J Powell says, even if he says nothing, will have a market impact. And it will have a bigger impact on the bond market than it will on the stock market, which is down a full point this morning. So yes, but not yet. I imagine we’ll hear something very soon. Q: September and October tend to be volatile; do you see us having a 5% or 10% pullback in those months? A: I don’t see any more than 5%, with the hyper liquidity that we have in the system now. There just aren’t any events out there that could trigger a pullback of 10%—no geopolitical events, and the economy will be getting stronger, not worse. So yes, an “everything rally” doesn’t give you many long side entry points, so I just don’t see 10% happening. Q: What about a Walt Disney (DIS) January 2022 $180-$220 LEAPS? A: I would do the $180-$200. I think you can afford to be tighter on your spread there, take some more risk because I think it’s just going to go nuts to the upside once we get a drop in COVID cases. By the way, Disney parks are only operating at 70% capacity, so if you go back up to 100% that's a near 50% increase in profits for the company. And it’s not just Disney, but Netflix (NFLX), Amazon (AMZN), and everybody else that’s about to have the greatest number of blockbuster movies released of all time. They’re holding back their big-ticket movies for the end of the pandemic when people can go back into theaters. We’ll start seeing those movies come out in the last quarter of this year, and I’m particularly looking forward to the next James Bond movie, a man after my own heart. Q: Are EV car charging companies like ChargePoint Holdings (CHPT) going to do as well as the car companies? A: No. They’re low margin business, so it’s not a business model for me. I like high-profit margins, huge barriers to entry, and very wide moats, which pretty much characterizes everything I own. The big profits in EVs are going to be in the cars themselves. Charging the cars is a very capital-intensive, highly regulated, and low-margin business. Q: Would a Fed taper cause a 10% pullback? A: Absolutely not; in fact, I think a taper would make the market go up because Jay Powell has been talking it into the market all year. And that’s his goal, is to minimize the impact of a taper so when they finally do it, they say ho-hum and “okay you can take that risk out of the market.” That’s the way these things work. Q: What is your yearend target for United States Treasury Bond Fund (TLT)? A: $132. Call it bold, but I'm all about bold. I think the first stop will be at $144, then $138, then bombs away! Q: What will it take for (TLT) to dip below $130? A: Another year of hot economic growth, which Congress seems hell-bent on delivering us. Q: What are your ProShares Ultra Short 20+ Year Treasury ETF (TBT) targets? A: When we were at 1.76% on the 10-year bond, the (TBT) made it all the way back to 22 ½. Next year we go higher, probably to $25, maybe even $30. Q: What’s your 10-year view on the (TBT)? A: $200. That’s when you get interest rates back to 10% in 10 years on the 10-year bond. So yes, that’s a great long-term play. Q: How long can we hold (TBT)? A: As long as you want. Ten years would be a good time frame if you want to catch that $17 to $200 move. The (TBT) is an ETF, not an option, therefore it doesn’t expire. Q: Are you working on an electrification stock list? A: I am not, because it’s such a fragmented sector. It’s tough to really nail down specific stocks. I think it’s safe to say that the electric power grid is going to change beyond all recognition, but they won’t necessarily be in high margin companies, and I tend to prefer high-profit-margin, large-moat companies which nobody else can get into, like Apple (AAPL) or Google (GOOG). Q: What about gas pipelines with high yields? A: They have a high yield for a reason; because they’re very high risk. If you're going to a carbon-free economy, you don’t necessarily want to own pipelines whose main job is moving carbon; it’s another buggy whip-type industry I would avoid. I’ve seen people get wiped out by these things more times than I could count. If you remember Master Limited Partnerships, quite a few of them went bankrupt last year with the oil crash, so I would avoid that area. These tend to be very highly leveraged and poorly managed instruments. Q: Best play on silver (SLV)? A: Wheaton Precious Metals (WPM) is the highest leveraged silver play out there, and a great LEAPS candidate. Go out 2 years and triple your money. Q: Geopolitical oil (USO) risks? A: No, nobody cares about oil anymore—that’s why we’re giving up on Afghanistan. China is buying 80% of the Persian Gulf oil right now. We don’t really need it at all, so why have our military over there to protect China’s oil supply? Q: What about Freeport McMoRan (FCX)? A: I absolutely love it. Any big economic recovery can’t happen without copper, and you have a huge tailwind there from electric cars which need 200 pounds of copper each, as opposed to 20 pounds in conventional cars. Q: I see AMC Entertainment Holdings (AMC) is up 20% today; should everyone be chasing this stock? A: No, absolutely not. (AMC) and all the meme stocks aren’t investments, they’re gambling, and there are better ways to gamble. Q: Should I buy the lumber dip? A: Yes. I think the slowdown on housing is temporary because it will take 10 years for supply and demand in the housing market to come back into balance because of all the millennials entering the housing market for the first time. So, that would be a yes on lumber and all the other commodities out there that go into housing like copper, steel, and aluminum. Q: Should I put money into Canadian Junior Gold Miners (GDX)? A: No, I would rather go out and take a long nap first. These are just so high risk, and they often go bankrupt. The liquidity is terrible, and the dealing spreads are wide. I would stick with the bigger precious metal plays like Newmont Mining (NEM), Barrick Gold (GOLD), and Wheaton Precious Metals (WPM). Q: Is Boeing (BA) a buy here? A: Yes, we’re back at the bottom end of the trading range for the stock. It’s just a matter of time before they get things right, and the 737 Max orders are rolling in like crazy now that there’s an airplane shortage. Q: What do you think about Robinhood (HOOD)? A: I like it quite a lot; I got flushed out of my long position on Friday with a 10% down move. Of course, 90% of my stop losses end up expiring at their maximum profit points, but I have to do it to keep the volatility of the portfolio down. So yes, I’ll try to buy it again on the next dip. The trouble is it’s kind of a quasi-meme stock in its own right, hence the volatility; so I would say on the next 10% down day, you go into Robinhood, and I probably will too. Q: How are the wildfires around Tahoe? A: They’re terrible and there are three of them. I did a hike two days ago there, and out of a parking lot with 100 spaces, I was the only one there. It’s the only time I’d ever seen Tahoe deserted in August. With visibility of 500 yards, it's just terrible. Fortunately, I was able to hike without coughing my guts out—it’s not so thick that you can’t breathe. Q: What do you think of US Steel (X)? A: I like it, I think the whole industrial commodity complex rallies like crazy going into the end of the year. Q: As a new member, where is the best place to start? It’s just kind of like drinking from a fire hose. A: Wait for the trade alerts; they only happen at sweet spots and you may have to wait a few days or weeks to get one since we only like to enter them at good points. That’s the best place to enter new positions for the first time. In the meantime, keep reading all the research, because when these trade alerts do come out, they’re not surprises because I’m pumping out research on them every day, across multiple fronts. Be patient— we are running a 93% success rate, but only because we take our time on entering good trades. The services that guarantee a trade alert every day lose money hand over fist. Q: If they do delist Chinese stocks, will US investors be left holding the bag? A: Yes, and that will be the only reason they don’t delist them, that they don’t want to wipe out all current US investors. To watch a replay of this webinar with all the charts, bells, whistles, and classic rock music, just log in to www.madhedgefundtrader.com, go to MY ACCOUNT, click on GLOBAL TRADING DISPATCH or TECHNOLOGY LETTER (whichever applies to you), then select WEBINARS and all the webinars from the last ten years are there in all their glory. Good Luck and Stay Healthy. John Thomas CEO & Publisher The Diary of a Mad Hedge Fund Trader ​ ​ ​ ​ ​ ​ ​

Quote of the Day“The most dangerous word in the English language is “cheap”” said a hedge fund manager friend of mine.

​

 

[Bozzie]

Read in Browser

Welcome to Wall Street Breakfast, 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 The latest trading week of the slower season could be an active one. Economic reports out include updates on pending home sales, consumer confidence, construction spending and the ADP employment print. Meanwhile, the oil and gas industry is closely watching the approach of Hurricane Ida toward Louisiana and energy interests. On the corporate calendar, a rush of SPAC deals go to a vote and Autodesk (NASDAQ:ADSK) holds an investor event of interest. Companies heading into the earnings confessional next week include Li Auto, (NASDAQ:LI), Lululemon (NASDAQ:LULU) and DocuSign (NASDAQ:DOCU). Earnings Earnings spotlight: Monday, August 30th: Li Auto (LI), Cloudera (NYSE:CLDR) and Zoom Video (NASDAQ:ZM). Earnings spotlight: Tuesday, August 31st: H&R Block (NYSE:HRB), PVH(NYSE:PVH), CrowdStrike (NASDAQ:CRWD) and NetEase (NASDAQ:NTES). Earnings spotlight: Wednesday, September 1:Campbell Soup (NYSE:CPB), Chewy (NYSE:CHWY), C3.ai (NYSE:AI), ChargePoint Holdings (NYSE:CHPT) and Five Below (NASDAQ:FIVE). Earnings spotlight: Thursday, September 2: Signet Jewelers (NYSE:SIG), American Eagle Outfitters (NYSE:AEO), Hewlett Packard Enterprise (NYSE:HPE), Broadcom (NASDAQ:AVGO), Ciena (NYSE:CIEN) Docusign (DOCU) and Lululemon (LULU). Sponsored By VantagePoint Could A.I. Give You The Best Trade Of Your Life? Don't settle for ordinary trading strategies. See how Vantagepoint's battle-tested predictive analysiscan help you make smarter, more efficient trading decisions. Combine your experience and expertise with this top-of-the-line forecasting. Get in on stocks about to skyrocket and ride them out before the downturn. Easy for A.I. traders. Easy for options traders. See a FREE DEMO now! IPOs IPO watch: There are no IPO pricings on the calendar in the week ahead as the sector takes a bit of break ahead of the Labor Day weekend. Analysts won't have the week off as the quiet period ends on European Wax Center (NASDAQ:EWCZ), Weber (NYSE:WEBR), Orange County (NASDAQ:OBT), Paltalk (NASDAQ:PALT) and IDW MEdia (OTCPK:IDWM) on August 30, as well as Adagio Therapeutics (NASDAQ:ADGI) on August 31. Of note, the IPO lockup periods expire on Oscar Health (NYSE:OSCR) on August 30 and Innovage Holding (NASDAQ:INNV) on August 31. The fall initial public offering season kicks off in Europe next week with companies like French health-care property firm Icade Sante, Belgian chemicals distributor Azelis, German call center business Majorel, DNA-sequencing firm Oxford Nanopore Technologies and Richard Branson's Virgin Atlantic Airways Ltd. all on the watch list. M&A M&A tidbits: The Monmouth Real Estate Investment (NYSE:MNR)-Equity Commonwealth (NYSE:EQC) and Altabancorp (NASDAQ:ALTA)-Glacier Bancorp (NASDAQ:GBCI) deals go to a shareholder vote on August 31, while the QTS Realty Trust (NYSE:QTS)-Blackstone (NYSE:BX) deal is slated to close. If the Surface Transport Board allows the Canadian National Railway (NYSE:CNI) takeover of Kansas City Southern (NYSE:KSU) to proceed, shareholders will vote on the rails combination on September 3. Dividends Dividend watch: Verizon (NYSE:VZ) is forecast to boost its quarterly dividend payout to $0.64 per share from a prior level of $0.6275. The new yield of around 4.68% would be above the five-year average VZ yield of 4.47%. Go Deeper Check out Seeking Alpha's Catalyst Watch for a detailed list of specific events to watch. Events Corporate events: Autodesk (ADSK) hosts its Digital Investor Day with the company looking to rebuild confidence after its earnings day slump. Shares of ADSK rallied more than 10% in the three weeks following the company's last two investor days as Wall Street analysts underpinned their bull cases following the presentations. Also of high interest, Brown-Forman Corporation (NYSE:BF.B) hosts a virtual investor conference with presentations from execs on the company's integrated strategy and priorities that support the Nothing Better in the Market initiative. Meanwhile, Adaptimmune Therapeutics (NASDAQ:ADAP) is expected to issue a Phase 1 update on ADP-A2AFP at the International Liver Cancer Association meeting in a late-week presentation that could impact shares. Also keep an eye on Peloton Interactive (NASDAQ:PTON), with the company poised to set to start selling a less expensive treadmill in U.S. and market its new bike pricing. Check out Seeking Alpha's Catalyst Watch for a detailed list of specific events to watch. Analysis U.S. auto sales: U.S. auto sales are forecast to fall 9% in August as the market is squeezed even tighter by a worsening supply situation. The seasonally adjusted annual rate is expected to finish near 14.3M to mark the slowest sales pace of the year. Cox Automotive Senior Economist Charlie Chesbrough warns that the supply situation could even get worse for General Motors (NYSE:GM), Ford (NYSE:T), Toyota (NYSE:TM), Honda (NYSE:HMC) and Stellantis (NYSE:STLA). "Available inventory on dealer lots has been falling for months, and sales have been constrained further and further as a result. And soon the market will enter the Labor Day holiday weekend, usually one of the highest sales periods of the entire year, but with half the supply they had last year," he notes. Conference schedule: The Jefferies Semiconductor, IT Hardware & Communications Infrastructure Conference is the highlight event next week. Participating companies include Silicon Motion Technology Corporation (NASDAQ:SIMO), Radware (NASDAQ:RDWR), CEVA (NASDAQ:CEVA), Nova (NASDAQ:NVMI), NXP Semiconductors (NASDAQ:NXPI), ADTRAN (NASDAQ:ADTN), Amdocs (NASDAQ:DOX) and Axcelis Technologies (NASDAQ:ACLS). Some of the other major conferences set for next week include the Latin American Satellite Congress, UBS China A-Share Virtual Conference, Credit Suisse 9th China Internet C-Level Virtual Conference, the Stifel Transportation Conference, the Barclays Media and Telecom Forum and the Deutsche Bank dbAccess 25th Annual European TMT Conference. Data watch: Traders will have to be sharp for the first few days of the month with reports on Macau gaming revenue, discount broker DARTs, firearm background checks and Class 8 truck orders due out. Airline companies could start to post traffic updates, which are frequently accompanied with guidance updates. The electric vehicle sector will draw some attention when Chinese automakers Nio (NYSE:NIO), XPeng (NYSE:XPEV) and Li Auto (LI) update on August deliveries, while the broader update on China auto sales will be of high interest to Tesla (NASDAQ:TSLA), Volkswagen (OTCPK:VWAGY), Honda Motor (HMC) and Geely Automobile (OTCPK:GELYF) to see how the market share trends shake out. Read about more potential share price catalysts for the week ahead. SPACs SPAC watch: Shareholders with Supernova Partners Acquisition Company (NYSE:SPNV) meet to vote on the SPAC deal with Offerpad on August 31. Chardan Healthcare Acquisition 2 Corp. (NYSE:CHAQU) shareholders meet on August 31 to vote on the previously announced merger with Renovacor and Genesis Park Acquisition Corp. (NYSE:GNPK) shareholders vote on the business combination with Redwire. On September 3, shareholders with Sustainable Opportunities Acquisition Corp. (NYSE:SOAC) meet to vote on the proposed business combination with DeepGreen Metals. The SPAC deal is the latest in a long line involving electric vehicles with DeepGreen Metals planning to manufacture metals used in EV batteries. ​ Stocks Notable annual meetings: The Container Store (NYSE:TCS) on September 1 and Viasat (NASDAQ:VSAT) on September 2. Barron's mentions: The cover story this week dives into where investors might find opportunities with Chinese stocks after some alarming moves from Beijing this summer. The publication thinks China's most well-known companies like Alibaba (NYSE:BABA), Tencent (OTCPK:TCEHY) and Yum China (NYSE:YUM) are starting to look cheap, with the likelihood of volatility meaning there will be ample opportunity to buy. The point is made that China is still a major source of global growth with diligent savers being encouraged to put more of their $75T in household wealth into a stock market filled with companies well positioned for Beijing's policy makers. Closer to home, Plantronics (NYSE:POLY) is singled out this week as an attractive stock. The company is seen benefiting from a surge in hybrid meetings that mix in-person and virtual participants. Seeking More Seeking Alpha’s Wall Street Breakfast Podcast Seeking Alpha's Wall Street Breakfast podcast brings you all the news you need to know for your market day. Released by 8:00 AM ET each morning, it is a quick listen that you can put on as you get ready to start your working day.​

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[Bozzie]

August 30, 2021

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Will lawsuits prod the S.E.C. into action on SPACs?Ting Shen for The New York Times

[h=2]In defense of SPACs[/h]

When 49 major national law firms banded together late last week to condemn lawsuits targeting special purpose acquisition companies, the deal-making world took notice. To get “firms who regularly litigate against each other to agree on something” is impressive, Joseph Grundfest, a Stanford Law professor and former S.E.C. commissioner, told DealBook.

SPACs have recently come under attack in high-profile shareholder suits that challenge their fundamental structure, starting with an action against the $4 billion blank-check firm run by the billionaire investor Bill Ackman, which forced him to rethink his approach.

A quick recap: While SPACs seek a merger target, they park their funds in short-term investments like Treasury bills. The lawsuits say that these financial vehicles aren’t operating companies but investment funds, so they should be subject to the stricter oversight of the Investment Act of 1940 (which would dampen the freewheeling SPAC market). Two prominent securities law professors, John Morley of Yale and the former S.E.C. commissioner Robert Jackson, now of Columbia, were behind the suits. After Ackman, the professors sued two other SPACs, but a source close to the matter said there are no new legal actions planned, contrary to some reports.

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Law firms rallied in defense of SPACs. Kirkland & Ellis, one of the top legal advisers to SPACs, helped to persuade other firms to issue the statement, which said the lawsuits are “without factual or legal basis.” Some who signed on, like Simpson & Thatcher, have comparatively little involvement with SPACs. They are protesting on principle, organizers said. “The market has already driven some reform,” said Christian Nagler of Kirkland & Ellis. “Otherwise it should be done by proposing rules and laws, not by lawsuits.”

The firms also wanted to push back against the media attention generated by the reputations of Morley and Jackson. “We really needed something powerful to take away that P.R. narrative,” said Joel Rubinstein of White & Case. Of course, the law firms defending SPACs are protecting millions of dollars in legal fees, as well as principles. As for the motivations of Morley and Jackson in bringing these cases? The professors declined to comment, citing ongoing litigation.

Where does the S.E.C. stand? The S.E.C. has reviewed more than 1,000 SPAC I.P.O.s over two decades and never made a demand that the vehicles be registered under the Investment Company Act of 1940, the law firms’ letter noted. SPACs “should not be hung for crimes they did not commit,” Grundfest said.

That said, SPACs were “a sleepy backwater for 18 years and a boomtown for the last 18 months,” said William Birdthistle, an Investment Act specialist at the Chicago-Kent College of Law. Just because the S.E.C. did things one way before doesn’t mean it will continue to do so, especially under the tough-talking leadership of Gary Gensler. The S.E.C. could opt to file briefs in the lawsuits, though that would only fuel more rumors about what is driving the litigation. The S.E.C. did not respond to a request for comment.

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[h=3]HERE’S WHAT’S HAPPENING[/h]

The E.U. is set to reimpose travel restrictions on visitors from the U.S. The restrictions, which were mostly lifted in June, could range from a required quarantine to a ban on nonessential travel. (The suggestions from the European Council are not mandatory, so each country can decide whether to apply them.) The move is a response to rising case counts in the U.S., which has averaged more than 100,000 Covid-19 hospitalizations a day for the past week.

AstraZeneca is mandating vaccines for U.S. employees, DealBook has learned. This applies to all employees in the company’s offices as well as those visiting customers, with mandatory testing for those with medical or religious exemptions. The Times has compiled a list of vaccine mandates and return-to-office dates at dozens of large companies.

American troops’ departure from Afghanistan draws near. The U.S. carried out a drone strike in Kabul yesterday against what officials called an imminent threat ahead of a Tuesday deadline for remaining military personnel to leave the country. (The American-led coalition told Afghans hoping to leave the country that, for them, the airlift was already over.) The U.S. was among 98 countries that said that they would continue to take in Afghan refugees.

Jay Powell’s Jackson Hole speech gets mixed reviews. Stocks rose after the Fed chair, in a virtual speech on Friday, said that the central bank wouldn’t begin to reduce its stimulus until later this year. (Futures today suggest that stocks will hold their gains at the open.) Critics said Powell is not doing enoughto prepare markets for higher inflation as the economy reopens.

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Rivian plans to go public at a punchy valuation. The electric truck maker, which has backing from Amazon and Ford, is aiming for an I.P.O. valuation of roughly $70 billion. That would make Rivian, which is expected to deliver its first truck in the next month, worth more than Ford but less than Tesla.

In the French Quarter of New Orleans yesterday.Eric Gay/Associated Press​

[h=2]Hurricane Ida hits land[/h]

Hurricane Ida made landfall yesterday morning in Louisiana, 16 years to the day since another powerful storm, Hurricane Katrina, devastated New Orleans. Ida arrived as a Category 4 storm, before weakening to a tropical storm this morning. Sheets of rain, high winds and storm surges knocked out power in New Orleans and left more than a million people across Louisiana without electricity. One death has been reported.

The region’s energy infrastructure is taking a hit. Nearly all of the Gulf of Mexico’s oil rigs were shut down, fuel deliveries were halted and Louisiana’s many refineries prepared for possible flooding. Platts Analytics said about 25 percent of U.S. oil refining capacity was in the storm’s path.

The economic impact is not yet clear, though some anticipate the disruption to energy supplies to cause gas prices to spike. Gasoline and oil futures jumped at first, but they are now off their highs as rigs appeared to escape significant damage. Mark Zandi, the chief economist at Moody’s Analytics, told the AP that he expects any price increases to last a few weeks.

Read more:

How climate change helped Ida quickly strengthen into a monster storm. Where Ida goes next. For the latest updates, follow The Times’s live briefing.

[h=2]“I thought 1999 was peak insanity, but 2021 is 1000% more insane!”[/h]

— Elon Musk, Tesla’s C.E.O., tweeting his amazement about how much investors have bid up stock prices.

[h=2]The week ahead[/h]

Elizabeth Holmes goes on trial: Holmes, the founder of Theranos, promoted what she claimed was a simple blood test that would revolutionize health care, attracting prominent investors and landing a partnership with Walgreens. In reality, the tests had significant problems. Holmes has pleaded not guilty to allegations that she defrauded investors and patients. If convicted, she faces up to 20 years in prison.

OPEC+ meets: The oil cartel and its allies are expected to meet after the group agreed in July to increase production each month by 400,000 barrels a day beginning in August. Economists expect the coalition to ratify that schedule.

The latest jobs numbers are released: Last month, the report showed the largest gains in jobs in nearly a year, and the lowest unemployment rate since the pandemic began. Economists and investors will be looking for signs on how the resurgence of coronavirus cases has affected businesses.

The New York Times​

From The TimesMachine: On Sept. 4, 1882, Thomas Edison’s Pearl Street Station, the first commercial electrical power plant in the U.S., began generating electricity in Lower Manhattan. The electricity also illuminated The Times’s building. Describing the advent of electric lamps within its offices, The Times wrote: “It was a light that a man could sit down under and write for hours,” that proved “in every way satisfactory.”

[h=2]Meet you in the metaverse, maybe[/h]

Facebook’s virtual reality service Horizon Workrooms, announced last week, will allow users to don a VR headset, create an avatar and sit among colleagues in computer-generated corporate settings. It’s not the only company betting on enterprise VR. You can host virtual fireside chats (using Roomkey); navigate through a gamified office space (on Gather); or put on an entire virtual expo event (on MootUp).

The research firm ARtillery Intelligence expects the sector to be worth about $4 billion in 2023. But not all experts are convinced that meetings in the “metaverse” will catch on quickly. Here are three reasons:

Content is king, even in virtual reality. Florian Couret, the head of the immersive lab at the property broker BNP Paribas Real Estate, used VR headsets to hold some meetings with colleagues across five European countries last year. But the experiment petered out. “You can have the best tools in the world to meet in virtual reality, but if the content is not interesting, nobody cares,” he said.

Employee resistance will be a major obstacle, said Darrell West, a senior fellow at the Brookings Institution. Gamers might already be living in the metaverse, but workers are creatures of habit, he said. Virtual reality may be too “far afield from our regular forms of interaction” to make it into the workplace anytime soon, West said.

Better broadband infrastructure is needed. “Connectivity is actually still a big challenge,” West said. If companies want realistic virtual office spaces, they, and tech companies, are going to have to invest a lot more money in infrastructure, he added.

Despite the hurdles, some industries are already embracing the technology. Alexandros Sigaras, an assistant professor of research at Weill Cornell Medicine, said mixed-reality headsets were piloted in I.C.U.s during the pandemic to bring additional expertise into the room without risking exposure to the virus. He regularly hosts meetings in VR and believes there’s potential for the technology in all types of workplaces.

Want to share The New York Times with your friends and family? Invite them to enjoy unlimited digital access to our journalism with this special offer.

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

Deals

Robert Allbritton’s $1 billion sale of Politico to Axel Springer is one of the most successful media deals of all time. (NYT)

The Chinese A.I. company SenseTime filed for an I.P.O. in Hong Kong, brushing off concerns over China’s crackdown on tech companies. (CNBC) Amazon struck a deal with Affirm, a “buy now, pay later” provider, to add a new option at checkout for purchases of $50 or more. (NYT)

Policy

Some say that low interest rates cause inequality, but what if it’s the reverse? (NYT) A new rule in California to make new buildings greener could raise prices in an already expensive state. (NYT) U.S. officials have started to block solar panels from China that they believe could be products of forced labor. (WaPo)

Best of the rest

BCG will end flights to wine and dine potential recruits to help reduce its carbon footprint (FT) Just like the office, the future of gyms is hybrid. (WSJ) Ethan Brown, the founder and C.E.O. of Beyond Meat, on his moral and environmental priorities. (NYT) Meet the Covid commentariat: a group of scientists who went from relative obscurity to household names. (Vanity Fair) “The World Is Still Short of Everything. Get Used to It.” (NYT)

Anna Schaverien contributed reporting.

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

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

Jason Karaian, Editor, London @jkaraian

Sarah Kessler, Deputy Editor, Chicago @sarahfkessler

Stephen Gandel, News Editor, New York @stephengandel

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

Lauren Hirsch, Reporter, New York @LaurenSHirsch

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

 

[Bozzie]

Hey Boz. I came across an article that makes a compelling arguement for ZI. If you have read it can you share your thoughts?

Nice call on ZI Bruins....dated 4-17-21 UP 20%

https://www.cnbc.com/quotes/ZI

 

[Bozzie]

Spring loaded IMO.

https://www.cnbc.com/2021/08/30/china-tech-crackdown-experts-warn-on-the-risks-ahead-for-stocks.html

 

[Bozzie]

Global Market Comments
August 30, 2021
Fiat LuxFeatured Trade:(MARKET OUTLOOK FOR THE WEEK AHEAD,
or THE HIGHER WE GO THE CHEAPER WE GET),
(JPM), (BAC), (C), (GS), (MS), (BLK), (FCX), (X),
(WYNN), (MGM), (ALK), (LUV), (HAL), (SLB), (TLT)

​

​

The Market Outlook for the Week Ahead, or The Higher We Go the Cheaper We GetI am sitting here holed up in my office in San Francisco.

Lake Tahoe is being evacuated as the Caldor fire is only ten miles away and the winds are blowing towards it. The visibility there is no more than 500 yards. The ski resorts are pointing their snow cannons towards their buildings to ward off flames.

Conditions are not much better here in Fog City. We are under a “stay at home” order due to intense smoke and heat. Even here, the fire engines are patrolling by once an hour.

The Boy Scout trip got cancelled this weekend, so the girls are having a cooking competition, chocolate chip waffles versus a German chocolate cake.

To make matters worse, I have been typing with only one finger all week, thanks to the elbow surgery I had on Tuesday. Next time, I’ll think twice before taking down a 300-pound steer. When I told the doctor how I incurred this injury, he laughed. “At your age?”

Which leaves me to contemplate this squirrelly stock market of ours. I have always been a numbers guy. But the higher the indexes rise, the cheaper stocks get. That’s not supposed to happen, but that is the fact.

We started out 2021 with an S&P 500 price earnings multiple of 25X. Now, we are down to a lowly 21X and the (SPY) is 20% higher, rising from $360 to $450.25.

The analyst community, ever the lagging indicator that they are, had S&P forward earnings for 2022 all the way down to $175. They have been steadily climbing ever since and are now touching $200 a share.

This is what 20/20 hindsight gets you. That and $5 will get you a cup of coffee at Starbucks. It takes a madman like me to go out on a limb with high numbers and then be right.

So what follows an ever-cheaper market? A more expensive one. That means stocks will continue to my set-in-stone target of $475 for the (SPY) for yearend, and (SPY) earnings of over $200 per share.

It gets better.

(SPY) earnings should hit $300 a share by 2025 and $1,400 a share by 2030. That makes possible my (SPY) target of $1,800 and my Dow Average target of 240,000 in a decade.

What are markets getting right that analysts and bears are getting wrong?

The future has arrived.

The pandemic brought forward business models and profitability by a decade. Technology is hyper-accelerating on all fronts.

Cycles are temporary but adoption is permanent. We are never going back to the old pre-pandemic economy. As a result, stocks are now worth a lot more than they were only two years ago.

So what do we buy now? There is a second reopening trade at hand, the post-delta kind. That means buying banks (JPM), (BAC), (C), brokers (GS), (MS), money managers (BLK), commodities (FCX), (X), hotels (WYNN), (MGM), airlines (ALK), (LUV), and energy (HAL), (SLB).

And what do we avoid like the plague? Bonds (TLT), which offer only confiscatory yields in the face of rising inflation with gigantic negative interest rates.

As for technology stocks, they will go sideways to up small in the aftermath of their ballistic moves of the past three months.

You all know that I am a history buff and there are particular periods of history that are starting to disturb me.

In August, we saw ten new intraday highs for the S&P 500 (SPY). That has not happened since 1987. Remember what happened in 1987?

We have not seen 11 new highs in August since 1929. The only negative three months seen since 1929 are August, September, and October. Remember what happened in 1929?

If that doesn’t scare the living daylights out of you, then nothing will. So, it seems we are in for some kind of correction, even if it’s just the 5% kind.

As for me, I’m looking forward to 2030.

The “Everything” Rally is on, according to my friend, Strategas founder Tom Lee. You can see it in the recent strength of epicenter stocks like energy, hotels, airlines, and casinos. It could run into 2022.

The Taper is this year and interest rate rises are later, said Jay Powell at Jackson Hole last week. Markets will be jumpy, especially bonds. Fed governor Jay Powell’s every word was parsed for meaning. Dove all the way. The larger focus will be on the August Nonfarm Payroll report out this week.

Pfizer Covid vaccination gets full FDA approval, requiring millions more to get shots and bringing forward the end of the pandemic. All 5 million government employees will now get vaccinated, including the entire military. It’s the fastest drug approval in history. Some 37,000 new cases in one day. The stock market likes it. Take profits on (PFE)

Bitcoin tops $50,000 after breaking several key technical levels to the upside. Next stop is a double top at $66,000. It helps that Coinbase is buying $500 million worth of crypto for its own portfolio. Buy (COIN) on dips.

The US Dollar will crash in coming years, says Jeffry Gundlach and I think he is right. Emerging markets will become the next big play but not quite yet. Gold (GLD) will be a great hideout once it comes out of hibernation. China will soon return to outperforming the US. The dollars reserve currency status is at risk.

The lumber crash is saving $40,000 per home, says Toll Brothers (TOL) CEO, Doug Yearly. Last year, lumber prices surged from $300 per board foot to an insane $1,700, thanks to a Trump trade war with Canada and soaring demand. It all flows straight through the bottom line of the homebuilders which should rally from here. Buy (TOL) on dips.

China’s crackdown creates investment opportunities, says emerging investing legend Mark Mobius. He sees corporate governance improving over the long term. The gems are to be found among smaller companies not affected by Beijing’s hard-line. Mobius loves India too.

My Ten-Year View

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 800% to 240,000 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 240,000 here we come!

My Mad Hedge Global Trading Dispatch saw a healthy +7.62% gain in August. My 2021 year-to-date performance appreciated to 76.83%. The Dow Average was up 15.87% so far in 2021.

That leaves me 80% in cash at 20% in short (TLT) and long (SPY). I’m keeping positions small as long as we are at extreme overbought conditions.

That brings my 12-year total return to 499.38%, some 2.00 times the S&P 500 (SPX) over the same period. My 12-year average annualized return now stands at an unbelievable 42.80%, easily the highest in the industry.

My trailing one-year return popped back to positively eye-popping 116.67%. 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 39 million and rising quickly and deaths topping 638,000, which you can find here.

The coming week will bring our monthly blockbuster jobs reports on the data front.

On Monday, August 30 at 11:00 AM, Pending Home Sales are published. Zoom (ZM) reports.

On Tuesday, August 31, at 10:00 AM, S&P Case Shiller National Home Price Index for June is released. CrowdStrike (CRWD) reports.

On Wednesday, September 1 at 10:45 AM, the ADP Private Employment report is disclosed.

On Thursday, September 2 at 8:30 AM, Weekly Jobless Claims are announced. DocuSign (DOCU) reports.

On Friday, September 3 at 8:30 AM, the all-important August Nonfarm Payroll report is printed. At 2:00 PM, the Baker Hughes Oil Rig Count is disclosed.

Oh and the German chocolate cake won, but please don’t tell anyone.

As for me, given the losses in Afghanistan this week, I am reminded of my several attempts to get into this troubled country.

During the 1970s, Afghanistan was the place to go for hippies, adventurers, and world travelers, so of course, I made a beeline for straight for it.

It was the poorest country in the world, their only exports being heroin and the blue semiprecious stone lapis lazuli, and illegal export of lapis carried a death penalty.

Towns like Herat and Kandahar had colonies of westerners who spent their days high on hash and living life in the 14[SUP]th[/SUP] century. The one cultural goal was to visit the giant 6[SUP]th[/SUP] century stone Buddhas of Bamiyan 80 miles northwest of Kabul.

I made it as far as New Delhi in 1976 and was booked on the bus for Islamabad and Kabul ($25 one-way). Before I could leave, I was hit with amoebic dysentery.

Instead of Afghanistan, I flew to Sydney, Australia where I had friends and knew Medicare would take care of me for free. I spent two months in the Royal North Shore Hospital where I dropped 50 pounds, ending up at 125 pounds.

I tried to go to Afghanistan again in 2010 when I had a large number of followers of the Mad Hedge Fund Trader stationed there, thanks to the generous military high-speed broadband. The CIA waved me off, saying I wouldn’t last a day as I was such an obvious target.

So, alas, given the recent regime change, it looks like I’ll never make it to Afghanistan. I won’t live long enough to make it to the next regime change. It’s just one more concession I’ll have to make to my age. I’ll just have to content myself reading A One Thousand and One Nights at home instead. The Taliban blew up the stone Buddhas of Bamiyan in 2001.

In the meantime, I am on call for grief counseling for the Marine Corps for widows and survivors. Business has been thankfully slow for the last several years. But I’ll be staying close to the phone this weekend just in case.
Good luck and good trading.

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

India in 1976

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Quote of the Day“20 years ago, I could read the Wall Street Journal every morning and feel that I knew enough to at least start my day. That is no longer true,” said technology guru and venture capital investor, Roger McNamee.

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

The "Diary of a Mad Hedge Fund Trader"(TM)
and the "Mad Hedge Fund Trader" (TM)
are protected by the United States Patent and Trademark Office
The "Diary of the Mad Hedge Fund Trader" (C)
is protected by the United States Copyright Office​

 

[Ricboff]

Yesterday was my birthday....and this happened:

I went to the gym this afternoon. While I was working out I got a text from Chase saying there was a possible fraudulent charge on my credit card (this has happened to me before while at the same gym). I walk to the locker room...and my locker is busted open, gym bag stolen - which contained my wallet. Inside the wallet: 2 credit cards, 2 debit cards, Florida DL, military ID, concealed carry permit, and $330 cash (I was supposed to go visit a cousin tomorrow, so I took out $200 today, and I always carry a "emergency hundy" in the back of the wallet). They stole my car keys....and my spare key is in the safe....in Florida. Wife is overnighting my spare key tomorrow along w/ my passport. I'm going to try to get a new military ID tomorrow. Citi is overnighting a new credit card. I have to call the bank tomorrow to get a new debit card. What a sh*tshow! Great f*cking birthday!!

I was able to get a new retired military ID today, but I have to go in-person to get a new Florida DL. I just hope I don't get pulled over anytime soon. Hopefully the cop is understanding. I have a picture of my DL saved on my phone. I get one of the credit cards fedex'd tonight, but the debit cards aren't here until next week.

insane, sorry to hear


i'm with you guys on Chinese stocks. Im on a 1.5 mths journey with fxi and kweb. Sold puts at the price i wanted, premiums were crazy, over 4% for kweb. Blew through it, sold more puts on KWEB (as on the weekly Stoichastics was below 30!, never been as such the last 3 yrs , even 2020 start of covid. money).Inflows into KWEB have been huge while the price has tanked. Sold calls on kweb/fxi, two expire spet 17, another this friday. I have received just over $6 k total with the put/call selling. FINALLY kweb had a green candle on the weekly last week, had EIGHT red candles on the weekly !!insane. Has a gap to fill at $56 on the weekly. Im indifferent as to having my shares called away or not. If they do i'll net $6ish , if not, i plan on selling more calls

crazy ..... Long term i think this level is steal terrtory...jmo

 

[Ricboff]

KWEB

2 yr weekly

this week's call is @ $49.50. IF i'm called away , i'll liekly use the capital in selling a put @ $46, gap fill area (depending on chart and premium %)

i have no idea what tomorrow brings, lol , just working on probablities . Can it break the low of 3 weeks ago? sure it can ...can do whatever it wants. Some large money flow, once again, is going into kweb .

 

[Ricboff]

to add;

selling puts is a great way to generate income AND get an underlying at the price YOU WANT. I actually DONT want to be assigned in any of the puts i sell, but i sell them based on the underlying being fundamentally strong (be it xlf, kweb etc) AND the technicals, already oversold when i sell them . I wanted KWEB at the 200 sma AND it was oversold on the daily , but it blew through it. Shit happens. Could have bitten the bullet and taken the loss, but again i wanted to own it for longer term. Took advantage of crazy fear and sold more. I'll full now, not adding . If all 3 seperate call options are called away (unlikely as one is a Sept$55) i net $6k. Kinda show us the power of being a seller of options.

just sharing


note- if anyone holds a lot of a stock and etf and gets concerned as the market may look toppy? u can generate income from it by selling an ITM call with downside protection. Kinda like renting your stock out

food for thought

 

[Ricboff]

i'd b remiss -- one last note, to be crystal clear ;

the weekly chart on kweb above does NOT show a bottom has been reached- no higher low, no break of the diagonal line from Feb 2021. Ideally? it double bottoms OR forms a higher low. the higher time frames carry more weight, that's why i posted the weekly chart--clear clear downtrend . Kweb has retraced over 50%

 

[Bozzie]

Great info Ricoff...I've wondered your view on China.
KWEB Nice net asset bounce over the past week.. If you like ETFs this one looks safe IMO given the recent CPP beat down on tech.
This has low 70's written all over it although I'm not much of a chartist

 

[Bozzie]

August 31, 2021

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

Elizabeth Holmes faces multiple counts of fraud.Carlos Chavarria for The New York Times

[h=2]The reckoning begins[/h]

Jury selection begins today in the federal criminal case against Elizabeth Holmes, the founder of the blood-testing tech start-up Theranos. Indicted in 2018, she faces a dozen counts of fraud and conspiracy to commit wire fraud for making false claims about Theranos’s blood tests and business prospects. She has pleaded not guilty. If convicted, Holmes, 37, faces up to 20 years in prison.

Opening arguments in the trial, which is expected to last three to four months, begin next week. At the heart of the proceedings, The Times’s Erin Griffith and Erin Woo write, is whether Holmes intentionally misled investors about her company’s technology or believed her own lies and was manipulated by others.

Court filings recently unsealed provided a preview of what Holmes’s lawyers may say, and whom they could present in her defense.

Holmes may point the finger at others, judging from a request her lawyers made last year that was just made public. She will be tried alone, but is not the only one accused of fraud. Ramesh “Sunny” Balwani, her former boyfriend and the former president and C.O.O. of Theranos, also faces charges. (His trial will begin early next year; he also pleaded not guilty.)

Continue reading the main story

[h=3]ADVERTISEMENT[/h]

Holmes told the court she could introduce an expert to discuss “a mental condition bearing on guilt,” namely that her relationship with Balwani had a “pattern of abuse and coercive control.” Balwani’s lawyers denied the accusation in a filing.

The tech industry’s “fake it till you make it” culture is also on trial. Holmes was 19 when she started Theranos in 2003. After dropping out of Stanford, she raised $700 million from investors and became the world’s youngest billionaire, as Theranos soared to $9 billion in value.

Holmes carefully cultivated her image, delivering eye-catching promises about Theranos’s revolutionary technology with an unusually deep voice, an intense stare and a uniform of black turtlenecks meant to evoke Steve Jobs. In her heyday, she presented herself as the ultimate ambitious, self-assured entrepreneur out to change the world, a common archetype in the tech industry, which has helped propel start-ups to riches and power. (Her high profile may pose a challenge for jury selection, which is expected to extend into tomorrow, or possibly longer.)

A refresher on who’s who in the rise and fall of Theranos. In addition to Holmes and Balwani, some of the other key figures in the saga include:

Continue reading the main story

[h=3]ADVERTISEMENT[/h]

Tyler Shultz and Erica Chung, the former Theranos employees who blew the whistle on the company’s false claims. David Boies, the litigator who served on the company’s board and tried to shut down whistle-blowers and reporters who questioned the company’s business practices. Former members of Theranos’s star-studded board, including the former secretaries of defense James Mattis and William Perry, as well as the former secretaries of state Henry Kissinger and George Shultz (the grandfather of Tyler, the whistle-blower mentioned above). John Carreyrou, the journalist who wrote the definitive account of fraudulent practices at the company.

[h=3]HERE’S WHAT’S HAPPENING[/h]

America ends its 20-year military occupation of Afghanistan. The last U.S. forces flew out late yesterday, beginning what Secretary of State Antony Blinken called “a new chapter” of engagement. The political implications for President Biden at home are now the subject of scrutiny, as he tries to get infrastructure and other spending plans passed.

Hurricane Ida raises questions about the concentration of America’s oil industry. While early reports suggested most oil facilities escaped major damage, environmentalists said the storm highlighted how much critical energy infrastructure lies in an area exposed to increasingly extreme weather. Power outages raised particular concerns about the resilience of a new natural gas plant in New Orleans.

The F.T.C. cracks down on gas station mergers to lower prices at the pump. A letter from the commission’s chair, Lina Khan, argued for a change in approach to merger reviews in the industry, which she said enabled consolidation that led to “price coordination and other collusive practices.”

China tightens restrictions on video games. For young people, no online gaming is allowed on school days, and it’s limited to an hour a day on weekend and holiday evenings, under new government rules responding to parents’ complaints that prior limits weren’t tough enough.

Continue reading the main story

[h=3]ADVERTISEMENT[/h]

Starbucks faces one of the most serious efforts to unionize its workers in its history. Workers at three locations in the Buffalo region filed petitions to hold union votes, which could happen in a few weeks. The effort, which challenges Starbucks’ progressive image, follows a similar drive at an Amazonwarehouse in Alabama and a strike by workers at food plants in five states.

[h=2]AT&T pitches 5G as climate friendly[/h]

AT&T is unveiling a new climate initiative today that it claims will provide companies with tangible ways to use 5G and other technologies to drive down carbon emissions.

The telecom giant will join forces with Microsoft, Equinix, Duke Energy and others to create the Connected Climate Initiative. AT&T says it and its partners plan to develop and deploy tech products that companies in the energy, transport and manufacturing industries — which include many of the worst culprits for emissions — can use to reduce their carbon footprint. AT&T has set a target for the group to help businesses collectively eliminate a gigaton of greenhouse gas emissions by 2035. (A gigaton is a billion metric tons, or about 15 percent of the total greenhouse gases emitted each year in the U.S.)

AT&T’s initiative addresses rising concerns that 5G is bad for the environment. 5G requires more transmission towers than previous wireless technologies, which critics say will cause more environmental harm. Also, faster wireless data speeds will lead to even more energy-sapping data usage. Supporters, though, say 5G is more energy efficient at transferring data, and will enable new tracking technologies so companies and individuals can monitor and curtail their use of energy.

But talk is cheap. Michael Brune, the executive director of the Sierra Club, the environmental organization, told DealBook that “setting goals is important, but it’s the results that we need to see more than anything else.” A major scientific report from the U.N. recently concluded that a hotter future is now unavoidable, but there is a chance to slow further warming with a rapid shift away from fossil fuels and a drastic cut to emissions. AT&T said it will be tracking how it measures up to its gigaton target and will publish quantitative progress reports.

Do businesses need new technologies to shrink their carbon footprints? While AT&T’s initiative rests on companies implementing 5G, along with artificial intelligence and other future technologies, Brune said that he believes companies already have enough tools to halt fossil fuel usage. “We shouldn’t use fears about technological availability to slow us down,” he said, though “we should look forward to continuing innovation to make this easier and more equitable.”

[h=2]“They get the data, they get the first look, they get to match off buyers and sellers out of that order flow. That may not be the most efficient markets for the 2020s.”[/h]

—Gary Gensler, the S.E.C. chair, on payment for order flow, a contentious practice on Wall Street. Gensler’s comment that a ban was “on the table,” made in an interview with Barron’s, caused shares of Robinhood, which relies heavily on those payments, to fall 7 percent yesterday.

[h=2]The great British buyout[/h]

Private equity firms are snapping up companies in Britain at their fastest pace in years, engaging in bidding wars for companies like Morrisons, the country’s fourth-largest supermarket chain, The Times’s Eshe Nelson reports.

So far this year, private equity firms have bid a collective $63.5 billion to acquire British companies, according to Dealogic. That’s more than what they offered for British buyouts, at this stage in the year, in the previous 10 years combined.

Blackstone, KKR and other large U.S. private equity firms are bulking up their London offices, drawn across the Atlantic by relatively low prices for buyout targets:

The average stock in Britain’s FTSE 100 trades at 16 times its reported earnings, versus 27 times for the S&P 500. The British pound hasn’t fully recovered from its post-Brexit drop. A general wariness of American-style buyouts in Britain has kept private equity firms away, but now, with investors flush with cash and seeking places to put it, that seems to be changing.

The takeover battle over Morrisons, which traces its roots to the late 1800s, is a sign of the times. Two private equity firms, Fortress and Clayton, Dubilier & Rice, have traded bids for the retailer. At the same time, British politicians and some investors have tried to block the deal, arguing that buyout firms are bad owners. (Buyout interest in the defense industry has also raised concerns about national security.)

Morrisons seems poised to accept Clayton Dubiliers’s nearly $10 billion offer. That is driving up the value of other potential private-equity targets, which reportedly could include Sainsbury’s, Morrisons’ retail rival. It is also stoking a debate among lawmakers about whether Britain’s buyout boom is a good thing.

Want to share The New York Times with your friends and family? Invite them to enjoy unlimited digital access to our journalism with this special offer.

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

Deals

Companies that have made their stock exchange debuts via direct listing have, on average, outperformed other I.P.O.s. (WSJ) The Russian internet giant Yandex is buying out Uber’s stake in its food tech, delivery and self-driving ventures in a $1 billion deal. (Bloomberg) The Treasury Department said a Chinese private equity firm’s acquisition of chip manufacturer Magnachip poses “risks to national security.” (Reuters) Apple has acquired Primephonic, a classical music streaming service, ahead of the launch of an Apple-branded music app focused on that genre next year. (CNBC) Brilliant Earth, the online jewelry retailer, filed for an I.P.O., looking to tap rising interest in direct-to-consumer brands. (Bloomberg)

Policy

A C.D.C. panel unanimously backed the Pfizer coronavirus vaccine for 16-year-olds, and a member of Pfizer’s board said he expects the company’s shot for children aged 5 to 11 to be ready by winter. (Reuters, CNBC) The Education Department is investigating five states over their bans on mask mandates, which may run afoul of civil rights laws. (NYT) President Xi Jinping of China said his government’s campaign to address the “barbarous growth” of the tech sector was beginning to make progress. (SCMP) California lawmakers voted to expand a ban on employers gagging workers with nondisclosure agreements to include most harassment and discrimination cases. (AP)

Best of the rest

Wall Street bankers are combing Reddit and other online forums for investment advice. (WSJ) At 91, Warren Buffett is showing signs of shifting away from old-economy investments. (CNBC) Mars, the candy giant, aims to cut corporate travel to half its prepandemic levels, telling staff to get on a plane for “purpose, rather than presence.” (The Times of London) The gains of remote work are captured by the few and not the many. (NYT) “How to Solve Any Problem Using Just Common Sense” (NYT)

Anna Schaverien contributed reporting.

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

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

Jason Karaian, Editor, London @jkaraian

Sarah Kessler, Deputy Editor, Chicago @sarahfkessler

Stephen Gandel, News Editor, New York @stephengandel

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

Lauren Hirsch, Reporter, New York @LaurenSHirsch

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

 

[Ricboff]

$70 would be cool Boz, but the rate its going all my shares will be called away, lol. all good. China BMI came out yesterday, contraction, under 50! 47. Not seen since early 2020. Will see.

from Thomas report u kindly shared a page ago;

The US Dollar will crash in coming years, says Jeffry Gundlach and I think he is right. Emerging markets will become the next big play but not quite yet. Gold (GLD) will be a great hideout once it comes out of hibernation. China will soon return to outperforming the US. The dollars reserve currency status is at risk

yikes. lose its reserve currency status? dont think that happens in my lifetime but could b wrong. Would not be good for USA, no way. Certainly a depressed USD will be good for EM. India's chart is a solid uptrend

 

[Bozzie]

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Top News KaPow! Shutterstock​ Jay Powell is clearly the front-runner for another stint as chairman of the Federal Reserve, but he is not assured of a second term. While Powell has the reported support of Janet Yellen and White House aides, President Biden may choose to make his mark on the Fed, especially with the progressive wing of his party demanding a more inclusive American capitalism. Reappointments are also not awarded for past performance in a president's first term as the focus shifts to electoral prospects, policy goals and perceptions about the economy. Snapshot: Fed chairs serve a four-year term after being nominated by the president and confirmed by the Senate. They may serve multiple terms (consecutively or non-consecutively), with William McChesney Martin notching the record as longest serving chair from 1951 to 1970 and Alan Greenspan as a close second. Powell was nominated by President Trump on November 2, 2017, and was sworn in on February 5, 2018. While Powell's term ends in February 2022, Biden is expected to make his decision as early as next month. The Squad takes aim: Some powerful progressives in Congress already don't like Powell's track record on deregulation and weaker bank rules, like Sens. Sherrod Brown of Ohio and Elizabeth Warren of Massachusetts. As members of the Banking, Housing, and Urban Affairs Committee, both have a vote on whoever is nominated as the next Fed chair. Other progressive Democrats even went as far as calling on him to be replaced overnight, saying he has "taken very little action to mitigate the risk climate change poses to our financial system." Quote: "As news of the possible reappointment of Federal Reserve Chair Jerome Powell circulates, we urge President Biden to re-imagine a Federal Reserve focused on eliminating climate risk and advancing racial and economic justice," Reps. Alexandria Ocasio-Cortez, Rashida Tlaib and Ayanna Pressley said in a joint statement. "We urge the Biden Administration to use this opportunity to appoint a new Federal Reserve Chair." All three sit on the House Financial Services Committee, while another committee member Chuy Garcia, as well as Mondaire Jones, also signed on to the letter. "At a time when the Intergovernmental Panel on Climate Change is warning of the potential catastrophic and irreversible damage inflicted by a changing climate, we need a leader at the helm that will take bold and decisive action to eliminate climate risk," they continued. Powell's leadership has "substantially weakened many of the reforms enacted in the wake of the Great Recession regulating the largest banks, including capital and liquidity requirements, stress tests, the Volcker Rule, and living will requirements." Who is the alternative? Many are pointing to Lael Brainard, the one Democrat on the Fed's Board of Governors and the only non-Trump appointee. Brainard has opposed Powell on numerous occasions, including on matters of big bank oversight, and has found a path to address climate change through the Fed's financial stability mission. She has also advocated for making the financial system more inclusive and is seen as a safe bet that would continue Powell's interest rate policy. (39 comments) Stocks A winning August The calls of a stock market melt-up are getting louder as the major averages posted another round of solid gains on Monday. The S&P 500 has rallied more than 20% this year after scoring its 53rd record close in Monday's session and is set to close out its seventh consecutive winning month later today. In fact, the benchmark index has scaled the big wall of worry without seeing a 5% pullback for all of 2021. Adding to the sentiment, U.S. stock index futures climbed higher overnight: Dow +0.2%; S&P 500 +0.2%; Nasdaq +0.4%. Many are banking on an economic recovery, low rates through 2022 and stellar corporate earnings to continue to support the bull market. As earnings season winds down, the S&P 500 is on track to post a Q2 earnings growth rate of 95.4% (compared to the pandemic year in 2020), which would be the fastest pace since Q4 of 2009. Analyst commentary: "Despite rising geopolitical risks, peak economic growth concerns, and the Federal Reserve moving closer to tapering its asset purchase program, the steady ascent of stocks continues," said Keith Lerner, chief market strategist at Truist. The market has also been impervious to other bad news, like the Delta variant, higher inflation, Hurricane Ida and the U.S. withdrawal from Afghanistan, which just wrapped up evacuation efforts from Kabul and effectively ended America's longest war. Alarm bells? "Be very much aware of the fact that if and when it reverses, the consequences could be severe," warned long-term bull and BTIG equity and derivatives strategist Julian Emanuel. The market's record price action is mimicking late 1999, he adds, and could spark a 10% to 20% correction within the next month. "If we had said inflation would be at 30-year highs and [10-year Treasury note] yields would be at 1.3% while the S&P would be at this level a year ago, no one would have believed you, me or anyone else." (5 comments) Sponsored By Fidelity Turbo Charge Your Portfolio with Decision Tech SM Wondering when to buy or sell? Fidelity’s real-time trading insights keep you in sync with the markets. Create custom watch lists to track stocks that interest you. Set email and mobile alerts to receive trade notifications, market news and tailored content that will allow you to capitalize on market movements as they are happening throughout the day. And when you trade online U.S. Stocks and ETFs with us, it’s commission free. For smarter trading decisions, get Decision Tech SM from Fidelity. Trending Indoor dining at risk The rise in COVID-19 Delta variant cases, combined with a shortage of workers, is putting pressure on restaurant operators at a time when the recovery is supposed to be gearing up. McDonald's (NYSE:MCD) is advising that franchisees in certain areas close indoor seating, reverting to the drive-thru/pick-up model that nearly all restaurants had adopted earlier this year. On a conference call last week, executives reportedly said franchisees should consider shutting indoor dining in counties where COVID cases are 250 per 100K people - based on a three-week rolling average. Quote: "We have a much deeper sense of what actions make a difference for the safety of our restaurant teams and crew," McDonald's USA President Joe Erlinger said at the meeting, according to materials prepared by the fast-food giant for Delta variant safety and obtained by Reuters. If other individual and chain restaurants follow suit, it would raise the issue of vaccination policy for customers again. New York City requires all diners to show proof of vaccination (but as discussed on the last Alpha Talks Editors Roundtable podcast, it's questionable how operators can really verify status). Filling positions: Restaurants are also having trouble finding staff, with many former workers looking for other opportunities. Health concerns about COVID remain a top reason for that. While the economy keeps adding jobs, the latest JOLTS report showed 10.1M open positions in June, with leisure and hospitality by far the biggest sector needing workers. If the problems with indoor seating persist, the fast-food sector could see an acceleration in building delivery kitchens, a move Wendy's (NASDAQ:WEN) recently embraced. (38 comments) Financials Payment for order flow Shares of Robinhood Markets (HOOD) stumbled 7% on Monday, and are down 2% premarket, after SEC Chairman Gary Gensler said a full ban of payment for order flows is "on the table." The controversial practice sends customer orders to wholesale brokers rather than exchanges, which then execute those trades in return for a portion of the profits. It's one of the main ways Robinhood makes money (80% of its revenue) and was flagged in disclosures when the stock-trading app went public last month. Bigger picture: The system, which results in a handful of financial firms buying most of the retail flow in America, has "an inherent conflict of interest," according to Gensler. "They get the data, they get the first look, they get to match off buyers and sellers out of that order flow. That may not be the most efficient markets for the 2020s." Proponents of PFOF maintain that it is a way for brokers to make money that doesn't really hurt consumers, and allows apps to charge zero commissions. "Never before has investing in this country been cheaper," said Robinhood CFO Jason Warnick. "We'll be definitely defending our customers and making sure that we don’t put up barriers that have been taken down and kept people out." More trouble on the horizon? Reports yesterday suggested that ****** (PYPL) was exploring a possible stock-trading platform. The payments giant also recently hired Co-founder of online brokerage TradeKing, Rich Hagen, who is now the CEO of Invest at ******, which allows him to explore opportunities in the consumer investment business, according to his LinkedIn page. Keep in mind that ****** has 400M accounts worldwide, implying plenty of demand to meet if the company were to launch the interface. (41 comments) Today's Markets In Asia, Japan +1.1%. Hong Kong +1.3%. China +0.5%. India +0.8%. In Europe, at midday, London -0.1%. Paris +0.3%. Frankfurt +0.7%. Futures at 6:20, Dow +0.2%. S&P +0.2%. Nasdaq +0.4%. Crude -0.9% at $68.56. Gold +0.3% at $1817.40. Bitcoin -1.2% at $47486. Ten-year Treasury Yield unchanged at 1.28% Today's Economic Calendar 8:55 Redbook Chain Store Sales 9:00 S&P CoreLogic Case-Shiller Home Price Index 9:00 FHFA House Price Index 9:45 Chicago PMI 10:00 Consumer Confidence 3:00 PM Farm Prices Companies reporting earnings today » ​ What else is happening... Hurricane Ida knocks out 2,000 miles of Entergy's (NYSE:ETR) high-voltage lines. Refineries assessing damage; Exxon (NYSE:XOM) shuts Baton Rouge units. Apple (NASDAQ:AAPL) shares reach all-time high on busy day for tech titan. Warren Buffett turns 91, prepares Berkshire (NYSE:BRK.B) for tech-driven economy. COVID-19 booster shots get support from CDC expert panel. Contamination... Japan suspends another 1M jabs from Moderna (NASDAQ:MRNA). Zoom Video (NASDAQ:ZM) drops 12% after-hours as soft outlook disappoints. China's video game restrictions are "non-event" for U.S. stocks - Jefferies. U.S. begins blocking solar panel imports over forced labor concerns. New iPhone (AAPL) satellite features to focus on emergencies only - Bloomberg. Seeking Alpha’s Wall Street Breakfast Podcast Seeking Alpha's Wall Street Breakfast podcast brings you all the news you need to know for your market day. Released by 8:00 AM ET each morning, it is a quick listen that you can put on as you get ready to start your working day.​

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[Bozzie]

Global Market Comments August 31, 2021 Fiat Lux Featured Trade: (WHY YOU MUST AVOID ALL EV PLAYS EXCEPT TESLA), (TSLA), (GM)

​ Why You Must Avoid All EV Plays Except TeslaMarkets live on fads. Once a certain investment theme takes hold, the imitators start coming out of the woodwork in droves. In 1989, all of the largest Japanese banks stampeded to issue naked short put options on the Nikkei Average by the billions of dollars when the index was at an all-time high. It then fell by 85%. I remember signing the paperwork on a $3 billion deal for the Industrial Bank of Japan on behalf of Morgan Stanley. It’s been 31 years, but I’m still waiting for those investors to come after me. Then there was the peak of the Dotcom Bubble in 2000 and no less than five online pet food delivery companies raised billions. (remember those cute sock puppets?) Every one of them went under. So, what has been one of the biggest fads of 2020? That would be electric vehicles. You no longer have to wear Birkenstocks, grow your hair long, and smoke pot to drive an electric car. They are about to become a major part of the American economy. According to Adam Jonas at Morgan Stanley, EVs account for 1.3% of the total car market today and will grow to 10% by 2025 and 25% by 2030. I have been involved in Tesla since its earliest days back in 2003. Then it was one rich man’s hobby, with technology that was a reach at best, and unlikely to ever see the light of day as a public company. There it remained for seven years. Then they brought out the Model S in 2010, which I snapped up as fast as I could, picking up chassis no. 125 at the Fremont factory. My signature is still on the wall there. If it worked this had the potential to be a real car. If it didn’t, I would wind up with $100,000 worth of inert aluminum, steel, silicon, rubber, and copper. The trials were then only just beginning for Musk. He faced nervous breakdowns, sleeping in factories, and SEC prosecutions. After a decade of abuse, suddenly everything clicked. Total Tesla production soared to over one million units and the shares leaped 150-fold to $500 from their post IPO low of $3.30. That move financed a lot of retirements among my readers. I remember what Steve Jobs once told me; “Like many overnight successes, this one took decades to pull off.” Suddenly, making electric cars looked easy. Raising money to finance them looked even easier. Enter the hoards, which I list below, a roll call of the shameless: Nikola Badger – Roll out is expected in 2021 and has a hydrogen fuel cell power source that hasn’t a hope in hell of ever becoming economic. As I never tire of explaining to investors, while electric power is digital and scalable, hydrogen is analog and isn’t. Maybe that’s why the stock is down 83% since June. Too many unbelievable promises and no actual functioning model. Gravity was their only actual power source. Fisker – If at first, you don’t succeed, why not fail again? This had double the number of parts of a conventional international combustion engine. Its chief claim to fame was that it got a free factory from the government in Joe Biden’s home state and the fact that Justin Bieber drives one. More flailing at the wind. Aspark Owl – A $3.2 niche supercar with appeal to maybe three car collecting Saudi princes. Bollinger B1 – Is a $125,000 SUV expected from a Michigan startup with only a 200-mile range. Why not pay nearly double the cost of a Tesla Model X and get half the performance? The Byton M-Byte – Is a $45,000 crossover car from a Chinese start-up. China has actually been building electric cars longer than Tesla, but they have a tendency to break down or catch on fire. Quality and safety problems have until now kept them out of the US, and probably always will. Genesis Essentia – A Croatian-based startup with a major investment from South Korea’s Hyundai. It will most likely never get off the drawing board. The last time Croatia built cars was for the Austria-Hungarian Empire during WWI. Rivian R1T – A startup with a reasonably priced truck and up to 400 miles of range that will only make it because they have a 100,000-unit order from the largest shareholder, Amazon (AMZ). It’s perfect for local deliveries. By now, virtually every major car manufacturer has or is about to roll out its own entry in the electric car race. I list them below, skipping those that are more than two years out over the horizon. Notice the profusion of the letter “e” in the names. They include the Porsche Taycan, Audi eTron, Jaguar I-Pace, Austin Mini Electric, Fiat 500e, Kia Niro EV, BMW i3, Chevy Bolt EV, Hyundai Kona Electric, and the Hyundai Ioniq Electric, Ford F-150 Electric, Ford Mustang Mach-E, and Nissan Ariya. Not one of these comes even close to the price/performance and battery density of the Tesla cars. Tesla is a decade ahead of the competition and is accelerating its lead. At best, they will sell a few electric cars to those who are intensely loyal to their brands and lose money doing it. In the meantime, Tesla hasn’t been sitting on its hands. Elon Musk plans to bring out a $25,000 model in two years that will bar entry to the field any other competitor. It is bringing out its own $250,000 supercar, the Tesla Plaid, which will go zero to 60 MPH in 1.9 seconds and have a 600-mile range. The Tesla Cyber Truck at $40,000 has the specs to take on the enormous US pickup market. Did I mention that the company is on the verge of developing technology that will improve battery performance by a staggering 20-fold? So Tesla is branching out to suck up every profit in every branch of the entire global auto industry. And this is what most traders, especially the short-sellers, got wrong about Tesla. The data is worth more than the car. The miles driven provide a springboard from which the company can offer very high value-added and profitable services, like autonomous driving. Not even Alphabet (GOOGL) can replicate this. When I bought my first Tesla more than a decade ago, I knew I was betting on the company. The big risk was that General Motors (GM) would step in with their own cheap electric car and drive Tesla out of business. In the end (GM) did that, but too little, too late. Its Chevy Bolt EV didn’t hit the market until the end of 2016. Today, it offers a boring design, lacks autonomous driving, possesses only a 259-mile range for $36,620, and is subject to recall, thanks to recurring battery fires (click here for the link). The quality is, well, Chevy quality. This year, Chevy will sell under 20,000 Bolts. Tesla is approaching 500,000. It’s too late to close the barn door after the horse has “bolted,” as GM is earning. Over the past decade, Tesla shares are up 150 times. GM shares are nearly unchanged during the greatest bull market of all times. It is competing against Teslas that are 20 years from the future, are fully autonomous, goes to street-to-street autonomous driving next year, and upgrades itself once or twice a month. Make mine Tesla, please, which will soon become the world’s first trillion-dollar car company. Don’t waste your time or money on the others, either as a driver or investor. ​ ​ ​ ​

Quote of the Day“The car business is hell,” said founder Elon Musk, when announcing he would sleep in the Fremont Tesla factory until Model S production reached 2,500 units a week. [FONT=Arial, Helvetica, sans-serif][/FONT][FONT=Arial, Helvetica, sans-serif] [/FONT]

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[Bozzie]

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Global Market Comments
September 1, 2021
Fiat LuxFeatured Trade:(HOW TO RELIABLY PICK A WINNING OPTIONS TRADE)

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How to Reliably Pick a Winning Options TradeYou’ve spent vast amounts of time, money, and effort to become options trading experts. You know the difference between bids and offers, puts and calls, exercise prices, and expiration dates.

And you still can’t make any money.

Now What?

Where do you apply your newfound expertise? How do you maximize your reward versus your risk?

It is all very simple. Stick to five simple disciplines that I am about to teach you and you will suddenly find that the number of your new trades that are winners takes a quantum leap, and the money will start pouring into your trading account.

It’s really not all that hard to do. So here we go!

1) Know the Macro Picture

If you have a handle on whether the economy is growing or shrinking, you have a major advantage in the options market.

In a growing economy, you only want to employ bullish strategies, like calls, call spreads, and short volatility plays.

In a shrinking economy, you want to executive bearish plays, like puts, put spreads, and long volatility plays.

Remember the only thing that is useful is a view on what the economy is going to do NEXT. The government only publishes historical economic data, which is for the most part useless in predicting what is going to happen in the future.

Remember, the options market is all about discounting what is going to happen next.

And how do you find that out? Well, you could hire your own in-house staff economist. Or, you could rely on economic research from the largest brokerage houses that all have their own economist.

Even the Federal Reserve puts out its own forecasts for economic growth prospects. However, all of these sources have notoriously poor track records. Listening to them and placing bets on their advice CAN get you into a world of trouble.

For the best possible read on the future of the US and the global economy, there is no better place to go than Global Trading Dispatch, published by me, John Thomas, the Mad Hedge Fund Trader.

This is where the largest hedge funds, brokers, and yes, even the US government goes to find out what really is going to happen to the economy.
2) Looking for great industry fundamentals

Do you want to give yourself another edge?

There are over 100 different industries listed on US stock markets. However, only about 5 or 10 are really growing decisively at any particular time. The rest are either going nowhere or are shrinking.

In fact, you can find a handful of sectors that are booming while others are in outright recession.

If you are a major hedge fund, institution, or government, you may want to cover all 100 of those industries. Good luck with that.

If you are a small hedge fund, or an individual working from home, you will want to conserve your time and resources, skip most of US industry, and only focus on a handful.

Some traders take this a step further and only concentrate on a single high growing, volatile industry, like technology or biotech, or a single name, like Neflix (NFLX), Tesla (TSLA), or Amazon (AMZN).

How do you decide which industry to trade?

Brokerage houses pump out more free research than you could ever read in a lifetime. Government reports tend to be stodgy, boring, and out of date. Big hedge funds keep their in-house research confidential (although some of it leaks out to me).

The Mad Hedge Fund Trader solves this problem for you by limiting its scope to a small number of benchmark, pathfinder industries, like technology, banks, energy, consumer cyclicals, biotech, and cybersecurity .

In this way, we gain a handle on what is happening in the economy as a whole, while lining up rifle shots on the best options trades out there.

We want to direct you where the action is, and where we have a good handle on future earnings prospects.

It doesn’t hurt that we live in the edge if Silicon Valley and get invited to test out many technologies before they are made public.

3) The Micro Picture is Ideal

Once you have a handle on the economy and the best industries, it’s time to zero in on the best company to trade in, or the “MICRO” selection.

It’s always great to find a good target to trade in because positions in single companies deliver double or triple the returns compared to stock indexes.

That is because the market will pay a far higher implied volatility for a single company than a large basket of companies.

Remember also that you are taking greater risk in trading individual companies. One single stock is subject to far greater even risk than a basket.

If the earnings come through as expected, everything is hunky-dory. If they don’t, the shares can drop by half in a heartbeat. Large indexes buffer this effect.

Of course, there are gobs of market research out there from brokers about individual companies. Some of it is right, some of it is wrong, but all of it is conflicted. Recommendations are either “BUY” or “HOLD”.

Brokers are loath to issue a “SELL” recommendation for a stock because it will eliminate any chance of that firm obtaining new issue business. Who wants to hire a broker to sell new stock with a “SELL” recommendation on their stock?

And brokerage firms don’t make their bread and butter on those piddling little discount commissions you have been paying them. They make it on new issues business. In fact, a new issue can earn as much as $100 million for one firm.

I have been following about 100 companies in the leading market sectors for nearly half a century. Some of the management of these firms have become close friends over the decades. So, I get some really first class information.

When markets rotate to sectors and companies that I already know, I have a huge advantage. Needless to say, this gives me a massive head start when selecting individual names for options Trade Alerts.
4) The Technicals Line Up

I have never been a huge fan of technical analysis.

Most technical advice boils down to “if it’s gone up, it will go up more” or “If it’s gone down, it will go down more.”

Over time, the recommendations are accurate 50% of the time or about equal with a coin toss.

However, the shorter the time frame, the more useful technical analysis becomes. If you analyze intraday trading, almost all very short-term movements can be explained in technical terms. This is entirely how day traders make their livings.

It’s a classic case of if enough people believe something, it becomes true, no matter how dubious the underlying facts may be.

So it does behoove us to pay some attention to the charts when executing your trades.

Talk to old-time investors and you will fund that they use fundamentals for long term stock selection and technicals for short term order execution.

Talk to them some more and you find the best fundamentalists sound like technicians, while savvy technicians refer to underlying fundamentals.

Get the technicals right, and you can provide one additional reason for your trade to work.

5) The calendar is favorable

There is one more means of assuring your trades turn into winners.
According to the data in the Stock Trader’s Almanac, $10,000 invested at the beginning of May and sold at the end of October every year since 1950 would be showing a loss today.

Amazingly, $10,000 invested every November 1 and sold at the end of April would today be worth $702,000, giving you a compound annual return of 7.10%.
Of the 62 years under study, the market was down in 25 May-October periods, but negative in only 13 of the November-April periods, and down only three times in the last 20 years!

There have been just three times when the "good 6 months" have lost more than 10% (1969, 1973 and 2008), but with the "bad six month" time period there have been 11 losing efforts of 10% or more.
Yes, it may be disturbing to learn that we ardent stock market practitioners might in fact be the high priests of a strange set of beliefs. But hey, some people will do anything to outperform the market.
It is important to remember that this cyclicality is not 100% accurate, and you know the one time you bet the ranch, it won’t work.

So there we have it.

Adopt these five simple disciplines and you will find your success rate on trades jumps from a coin toss to 70%, 80%, or even 90%.

In other words, you convert your trading from an endless series of frustrations to a reliable source of income.

If a potential trade meets only four of these five criteria, please do it with your money and not mine. Your chances of making money have just declined.

And I bet a lot of you poor souls execute trades all the time that meet NONE of these criteria.

Get the tailwinds of the economy, your industrial call, your company pick, the technicals, and the calendar working for you, and all of a sudden you’re a trading genius.

It only took me a half a century to pull all this together. Hopefully, you can learn a little bit faster than that.

I hope it all works for you.
This is John Thomas signing off saying good luck and good trading.

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Quote of the Day“You don’t make poor people rich by making rich people poor,” said Winston Churchill.

This is not a solicitation to buy or sell securities​