As of 4:14 p.m.:

Low Volume

- NYSE volume 31% below its one-month average;

- NASDAQ volume 15% below its one-month average;

- VIX index: down 2.49% to 30.12

Breadth

S&P 500 Sectors

Percentage Movers

Nasdaq 100 Heat Map

Wolf Street howls about the Canadian real estate market. 

Yesterday's newest short, CoreWeave CRWV, is down another -$3 1/2 to $40.13.

From Monday:

Short to the Core(Weave)

I am short (CRWV) at $45.66

More later this week on the name.

Position: Short CRWV VS.

By Doug Kass Apr 14, 2025 9:51 AM EDT

FastEddie

Dougie - when you do your SPY straddles and strangles options am I right to assume you are buying calls and puts at the 540 strike price and selling the 530 puts and 550 calls?

Dougie Kass

yes... doing both straddles at $540 (selling calls and puts) and strangles (shorting 530 puts and 550 calls)

As of 1:47 p.m. ET

The "generational compounders" are no longer compounding:

The Key Takeaway Thus Far

So far the rotation out of large-cap technology is conspicuous.

Amazon (AMZN) , Alphabet (GOOGL) , Apple (AAPL) , Meta (META) and Microsoft (MSFT) are all down while the (RSP) (equal-weighted S&P ETF) is up on the day.

Position: Long AMZN (S), GOOGL (S), META (VS), MSFT (VS)

By Doug Kass Apr 15, 2025 12:58 PM EDT

* Same theme...

So far the rotation out of large-cap technology is conspicuous.

Amazon AMZN, Alphabet GOOGL, Apple AAPL, Meta META and Microsoft MSFT are all down while the RSP (equal-weighted S&P ETF) is up on the day.

I am putting on some May straddles and strangles now ($530 and $540 puts, $540 and $550 calls).

Coca-Cola KO is at day's lows off the PepsiCo PEP downgrade.

Now up on YouTube, MRKT CALL with my pals Guy and Dan.

These two "talking heads" differentiate themselves in their honesty (they take ownership for their mistakes), provide actionable trading ideas and are unassuming (a rare trait).

And it's free.

Let's go to the tape!

Investors Are The Most Bearish In 30 Years. Time To Buy Stocks? - YouTube

* I think Citi is still too high on their 2025 S&P EPS forecast...

The magnitude of this revision tells you more about the forecaster than their forecast:

Bret Jensen

STAFF

1 hour ago 

Citigroup reduces FY2025 earnings estimates for the S&P 500 to $255 to $270. This leaves the Index trading at 21.3 forward earnings with a paltry 1.33% dividend yield. Hardly screaming bargain territory imho.

From Peter Boockvar:

Old news on import prices/NY mfr'g outlook falls to 24 yr low

In what is now very old news, both because of the onslaught of tariffs and also the weaker US dollar, March import prices were benign, falling one tenth m/o/m headline, unchanged ex petroleum and and up one tenth ex food and energy fuels. This is all about to change. Transitory? Not? One time step up in price? Or not because of the multi year shifting around of global supply chains and likely shortages of certain things until they do? We’ll soon see.

The April NY manufacturing index, the first April figure to be released, was -8.1, though up from -20 in March and better than the estimate of -13.5. Prices paid rose 6 pts to 50.8, the highest since August 2022. Prices received were up by 6.3 pts to 28.7, also the most since August 2022. New orders remained negative though backlogs rose back above zero. Employment was negative for a 5th month in the past 6.

Of note, the 6 month business outlook fell to -7.4 from +12.7 and that is the weakest since 2001 and the 2nd lowest print in the history of this survey which runs about 25 years. Expectations for prices paid and those received both were higher at multi year highs. Capital spending plans weakened again for a 3rd straight month to just 1.6 vs the 6 month average of 10.3. Expectations for new orders went to -6.6 from +15.5 and the 6 month average of +20.9.

Bottom line, many manufacturers are flying blind right now, to state the obvious, especially if one is doing business with China, and/or anything with the auto industry and with anyone using steel and aluminum as in input. A 90 day pause on everything else is fine but what will come of the 90 days and we’re still left with a blanket 10% tariff on everything imported just because.

Prices Paid

6 month Business Outlook

EU announces little progress in U.S. tariff discussions.

S&P faded nearly 40 handles and I covered my SPY $539.53 and QQQ $458.32 shorts (for a small profit).

I am out of Index positions.

Adding to TerrAscend (TSNDF).

Today is a research day - I have three company telephone meetings

The only institution that doesn't appreciate the growing popularity of cannabis products is the U.S. government:

From Peter Boockvar:

Some perspective on manufacturing contribution to US employment/Other interesting things

Some perspective on the post WWII trend of manufacturing employment as a % of total US private sector employment was a great visual in the WSJ yesterday. Notice how the decline started well before NAFTA came into effect in 1994 and China entered the WTO in 2001. Also, below that chart is one of the exports of goods from the US since 1987 that I saw data on. Outside of recession, it's gone straight up. Important information on this whole debate as manufacturing productivity has surged for decades.

I'm most worried about small businesses that procure products from China and don't have the quick agility to line up factories in other countries. Many are not going to make it. To put a number around here, in yesterday's WSJ, "Small and midsize companies account for $868 billion, or roughly one-third, of annual US imports, according to the Census Bureau." The article also cited a particular business that sells seasonal fireworks that they get from China. They are not opening this year and "The whole decision was tariff-based."

Another was Nils Skiwear, a California based apparel company. The president said "I don't think they understand that a lot of little businesses are going to go away." The article said "His business isn't likely to have the cash needed to cover tariffs on orders placed in early February that are slated to arrive in mid-August for ski season."

Understand the major working capital challenges here. Importers have to pay the tariff upon shipment, now 145% more expensive from China, while it takes time to sell the goods. https://www.wsj.com/economy/trade/smallest-businesses-are-biggest-losers-in-global-tariff-war-f4df62d5

Boeing is losing a major export market, China, maybe temporarily, maybe not. US tech is about to lose China as an export market as we encouraged them to produce more of everything themselves. And not only are we losing them as customers, they will also be some of our biggest high-end product competitors in the years/decades to come.

In yesterday's FT, "Some Canadian funds are backing away from taking on more US private assets because of geopolitical concerns and fears they will lose tax breaks on their American investments. Canada Pension Plan Investment Board, which has C$699 billion ($504 billion) in assets, is among those considering its approach. Meanwhile, one of Denmark's biggest retirement funds has paused new investments in US private equity because of concerns over stability and Trump's threats to take over Greenland, an executive at the fund told the Financial Times."

The executive said, "If some private equity funds come by and say 'we have a great investment in the US', we will say 'no thank you, come back in half a year when things are more stable and foreseeable or we will have to take a big discount.' " 

I'll say again, about 75% of global GDP takes place outside the US and 96% of the world's population lives outside the US. We cannot take that for granted.

In yesterday's March NY Fed's Consumer Expectations survey, the one yr inflation guess rose 50 bps to 3.6% but were little changed past one year. Unemployment expectations "jumped 4.6 percentage points to 44%, the highest reading since April 2020. The increase was broad based across age, education, and income groups."

Also of note on the labor picture, "The mean perceived probability of losing one's job in the next 12 months increased by 1.6 percentage points to 15.7%, the highest level since March 2024. The increase was largest for respondents with annual household incomes below $50,000." In terms of quits, "The mean probability of leaving one's job voluntarily in the next 12 months increased by .4 percentage point to 18%, remaining far below the 12 month trailing average of 19.7%."

Spending intentions were little changed but "Perceptions of credit access compared to a year ago showed a larger share of households reporting it is harder to get credit. Expectations for future credit availability also deteriorated, with a larger share of respondents expecting it will be harder to obtain credit in the year ahead." Expectations of missing a debt payment dropped but is slightly above the one yr average.

Finally, and I guess a bottom line on all of this, "The share of households expecting a worse financial situation in one year from now rose to 30%, the highest since October 2023." With their outlook for stocks, maybe a good contrarian indicator that expectations of higher prices over the coming 12 months fell to 33.8%, the lowest since June 2022.

From the LVMH call yesterday and whose stock is down 7% after disappointing numbers, dragging down other luxury goods makers:

"First on Chinese demand. On the domestic market, trends were consistent with the end of last year. The main swing factor year-to-date is Chinese demand in Japan, as you can imagine. It remains strong in absolute terms, but recycled last year's sharp increase and therefore no longer contributes to growth in percentage points."

"Second comment, despite the contexts of uncertainty preceding tariffs announcement, American demand for fashion and leather goods and watches and jewelry remained well oriented and accelerated modestly compared to the 2nd half of last year. Sephora on the other hand faced very challenging comps after going double-digit last year and this explained the sequential deceleration of the US market at group level." Their liquor business was soft.

"Third comment is that Europe continues to grow."

Overall, "We continue to face macro uncertainties and lack of visibility on external factors, and in that context, we remain confident while staying, of course, alert and vigilant. The cycle continues its normalization phase after years of exceptional growth."

The tariff/trade war weighed on the German ZEW investor confidence index on the German economy. This plunged to -14 in April from +51.6 in March when everyone was excited about the new government and all the fiscal spend to come. The estimate was +10. The Current Situation did improve though to -81.2 from -87.6 obviously still very negative. ZEW said, "The erratic changes in the US trade policy are weighing heavily on expectations in Germany, which have sharply declined. It is not only the consequences the announced reciprocal tariffs may have on global trade, but also the dynamics of their changes, that have massively increased global uncertainty. The economic expectations for Germany and the Eurozone reflect this development."

This is not a market moving figure but an initial sense of how foreigners feel about what's going on. The euro is taking a breather after its sharp rally, German bunds are weaker with yields higher and stocks there continue to trade well, higher by 1% today and by 6.3% ytd.

ZEW

The UK reported an unexpected drop of 78k in the March payroll monthly change, well more than the estimate of a fall of 15k. This comes right before a rise in payroll taxes implemented by the new government. That's the biggest one month drop since early 2020. Through February, wage growth remained strong, rising by 5.9% y/o/y ex bonuses, continuing to run above the rate of inflation. Notwithstanding the March jobs figure, the pound is rising to the best level vs the US dollar since October.

The UK stock market remains a place of a lot of cheap stocks with solid dividend yields and is flat year to date. On a valuation basis, the FTSE 100 that is heavy with commodity and financial exposure is trading at 12x expected earnings this year with a dividend yield of 3.9%. The FTSE 250 with more domestically oriented businesses is trading at just 8.5x earnings expectations with a 4.4% dividend yield.

British Pound

I have a scale higher into index shorts now.

I reshorted SPY $540.51 and QQQ $459.67

douglas cassel

3 minutes ago

Many have been perplexed by the simultaneous fall of the stock markets, US treasuries and the dollar, as this is pretty rare. Zero Hedge, for what that is worth, is all over this unusual combination as being the result of China selling treasuries to support the Yuan and give them capital to buy into their stock markets.

So an alternative explanation to the loss of US safe haven status is available. We shall see how this ends up.

This morning Pepsico PEP has been downgraded to neutral from buy at Bank of America BAC:



As previously reported, BofA analyst Bryan Spillane downgraded PepsiCo to Neutral from Buy with a price target of $155, down from $185. Frito-Lay North America's growth is likely to remain below long-term trendline this year and while international segments are scaling and making large contributions to sales and profit growth, it's not enough at this point to make up for slower growth at the North American snacks segment, the analyst tells investors. Given this, the firm expects limited opportunity for either topline outperformance or for better than low single-digit EPS growth in 2025 and 2026, the analyst tells investors.

Coca cola KO, shorted yesterday, could suffer collaterally.

Most active prearket ETFs as of 8:34 a.m. ET:

Upside:

-TMC +13% (momentum)

-DTIL +9.9% (receives U.S. FDA Fast Track Designation for PBGENE-HBV, a first-iIn-class gene editing therapy designed to eliminate the root cause of Chronic Hepatitis B)

-ERIC +7.0% (earnings, guidance)

-STRL +4.3% (to replace PDCO in S&P SmallCap 600 Index, effective Apr 17th)

-RKLB +3.8% (selected for potential multi-billion dollar U.S. and U.K. defense contracts to expand Hypersonic Technology Development with HASTE)

-NFLX +1.8% (targets $1T market cap, doubling revenue by 2030; Targets 2030 global ad revenue of $9B)

Downside:

-SPRB -17% (announces New Corporate Strategy and Acquisition of Tralesinidase Alfa for Treatment of Sanfilippo Syndrome Type B (MPS IIIB)

-RENT -13% (earnings, guidance)

-APLD -9.9% (earnings)

-ALGM -9.2% (onsemi withdraws proposal to acquire Allegro MicroSystem)

-ACI -7.7% (earnings, guidance)

-BCDA -5.5% (announces DSMB Review of CardiALLO Allogeneic Cell Therapy for Heart Failure Phase 1/2 Clinical Trial; Recommends study proceeds as designed based on 30-day data safety assessment of participants treated in low dosage group)

-DOW -5.0% (multiple broker downgrades)

-COTY -4.6% (Tier1 firm Cuts COTY to Underperform from Buy, price target: $4.50 from $9)

-HWM -3.8% (Wells Fargo Cuts HWM to Equal Weight from Overweight, price target: $118)

-CYTK -3.7% (Phase 3 ODYSSEY-HCM Trial did Not meet dual primary endpoints of changes from baseline to Week 48 compared to placebo in the Kansas City Cardiomyopathy Questionnaire)

-BA -3.3% (China reportedly orders halt to Boeing jet deliveries)

-SKIL -2.6% (earnings, guidance)

-MBLY -2.5% (Barclays Cuts MBLY to Equal Weight from Overweight, price target: $14)

-JNJ -2.3% (earnings, guidance)

Premarket percentage movers as of 8:50 a.m. ET:

* Sorry, Tom Lee...

Paul Singer joins Ray Dalio, Howard Marks, Stan Druckenmiller, Lee Cooperman and some other very smart observers with expanding market concerns:

I just covered my premarket Index shorts for a +$4/share profit (in only 3 hours) in SPY $536.23 and QQQ $455.14.From this morning:

Premarket Trading

* At 5:28 a.m.

I am back shorting the indices (but in "baby steps"):

* (SPY) $540.52

* (QQQ) $459.54

Position: Short SPY (VS), QQQ (VS)

By Doug Kass

NONE

Apr 15, 2025 5:45 AM EDT

Sorry Dan Ives and Tom Lee, but AI is stupid beyond belief. Potentially sub-kindergarten!

Yesterday the Boston Red Sox lost 16-1 (Here are the game highlights for Bloomberg's Tom Keene!)

When I heard the score, I thought it might have been a football game, although it is impossible to score just one point. I started thinking about the possible ways to score 16 points in a football game, and came up with a few combinations that work:

2 TDs and a safety

1 TD and 3 FGs

2TDs, 1 missed XP and a FG

2 TDs, 2 2 point conversions

4 FGs and 2 safeties

Then I decided to ask the AI (Perplexity to do it for me). What it returned is below. Not one thing adds to 16!

The first adds to 18, and it doesn’t even realize that is the case. The second scenario also adds to 18, but it is incomplete. On one of the TDs, the XP would have been kicked (99% make probability) so that is 1 more point. It really adds to 19. Unless the XP was missed, but that is not stated in the scenario it spat out.

Then cases 3 and 4 it cites as invalid, but addressing common misperceptions, but there are no common misperceptions about scoring in football. In scenario 4, they also left out the XP.

Then it concludes by saying the first two combinations are valid, when they are not valid.

This is probably first grade math? Kindergarten maybe? Nursery school? I cannot remember back that far. 12+4+2 does not equal 16. There is billions of dollars of capital, and who knows what in terms of R&D, and power, and it cannot add 12+4+2!

The whole problem is LLMs/Generative AI do not and cannot think. Apparently, there was no pre-existing article on the web that addressed the different permutations in football that result in a score of 16 points. So the LLM was left to its own devices, and this is what it hallucinated. And since it cannot think, it cannot check its own math or its own work.

Forget giving the LLMs more complex equations to test them, they cannot even do 12+4+2!!!!!

Perplexity query:

List all the ways of scoring 16 points in an NFL game

Perplexity answer:

In the NFL, there are several combinations of scoring plays that can result in 16 points. Here are the possible ways:

1. Two Touchdowns + Two Two-Point Conversions + One Safety

• 2 touchdowns (6 points each) = 12 points
• 2 two-point conversions (2 points each) = 4 points
• 1 safety (2 points)
  
  Total: 12 + 4 + 2 = 16 points

2. Two Touchdowns + One Two-Point Conversion + Two Safeties

• 2 touchdowns (6 points each) = 12 points
• 1 two-point conversion (2 points)
• 2 safeties (2 points each) = 4 points
  
  Total: 12 + 2 + 4 = 16 points

3. One Touchdown + Six Field Goals

• 1 touchdown (6 points)
• 6 field goals (3 points each) = 18 points
  
  This combination exceeds 16 points and is invalid.

4. One Touchdown + Three Field Goals + One Safety

• 1 touchdown (6 points)
• 3 field goals (3 points each) = 9 points
• 1 safety (2 points)
  
  Total: 6 + 9 + 2 = 17 points (invalid)

Note: The third and fourth combinations are included to address common misconceptions but do not yield 16 points. Only the first two combinations are valid.

Game on (and continue to avoid NVDA).

I never understood Jim's conspiracy theories expressed on CNBC's Mad Money (and on Twitter) which he invariably reveals and conjures up in bear markets (but never in bull markets).

Case in point:

After all, when passive accounts took an indexed Nvidia NVDA up to elevated/absurd share price levels (before the recent fall from grace) and CNBC's airwaves were non-stop talk of the merits of the company's future, Jim never complained nor cited a conspiracy or an artificial catalyst.

Now, Nvidia's underperformance (see my 83rd More Tales of Nvidia coming up!).

Jim, unfortunately, remains too close to certain managements (e.g., CRM and NVDA) and, as a result, becomes conflicted and is forced to make up this pablum when one of his most favorite stocks is under pressure (for bonafide reasons).

I am just writing honestly and not ad hominem.

From JPMorgan:

US: Futs are higher, led by Tech, as the market completed its first 2-day rally since Liberation Day. Pre-mkt, Mag7 and Semis are leading TMT higher with Fins higher into earnings. Other Cyclicals like Energy/Industrials are mixed with Materials higher led by gold miners. Bond yields are +/- 1bp as the curve twists flatter; USD is flat as it looks to ease 5 consecutive days of losses. The cmdty complex is weaker with crude and base weaker, gold up, and Ags mixed. The macro data focus is on import/export prices and Empire Mfg plus earnings from GSIB Banks, transports, and a HC (and Defensives factor) bellwether, JNJ.

and...

Volumes were light in this holiday-shortened week but there were some tidbits that continue to point toward a further Trump Pivot and some eventual support from the Fed. Details are below:

· TRUMP & TARIFFS – he mentioned potential relief for automakers from the 25% sectoral tariff. GM reversed higher by ~4.5% and F by ~5.4%. TSLA finished the session flat. Separately, he reiterated his intention to roll out tariffs on Pharmaceuticals.

o CNBC is reporting that a new lawsuit was filed by a group of small businesses, seeking to block new tariffs. The suit says that Trump’s claims of a national emergency, which allows him to implement tariffs without Congressional approval, are baseless. The group backing the lawsuit, the Liberty Justice Center, is a right-leaning group. This is the second lawsuit filed against Trump’s action, the other being a Charles Koch-backed lawsuit declaring Trump’s actions unconstitutional. In both cases the plaintiff is a small business with a supply chain that runs through China/APAC.

o US starts its Semis/Pharma probe ahead of the promised sectoral tariffs. The timeline to complete and then implement tariffs may be 1-2 months based on Lutnick comments.

· TRADE DEALS – WSJ is reporting that Bessent will prioritize UK, Australia, South Korea, India, and Japan as top targets for new trade deals. It is unclear if the order listed is the negotiating order. Further, Bessent said that there is a first mover advantage to these trade deals. Hassett mentioned that more than 10 countries have made ‘amazing’ trade deal offers but he did not indicate which countries or if they include the 5 mentioned by Bessent.

· FED’S WALLER – his comments highlight that the Fed is shifting towards one-sided risks, that being economic growth rather than inflation as the more important variable. This is partially driven by his view that tariff inflation will be transitory.

· NY FED INFLATION EXPECTATIONS – For 1-year expectations, yesterday’s print was 3.58% vs. 3.26% survey; 3.13% prior. 3-year stayed flat MoM at 3.00% and 5-year fell from 2.98% to 2.86%.

China orders its airlines to suspend Boeing BA jet deliveries.

China orders carriers to suspend Boeing jet deliveries amid trade war, Bloomberg News reports

Boeing's shares fall -$5 in premarket trading to about $154.

I would be a sub-$150 buyer.

A long-standing concern of mine — S&P consensus estimates remains too high:

Bonus — Here are some great links:

S&P Enters 'The Dreaded Death Cross'

A View From the Floor

Easter Seasonality

Two Crypto Non-Tops

* Death crosses on S&P and Nasdaq

Subscribers often ask about my (sometimes) frenetic trading of the indices.

Let me explain.

This is a strategy (of buying the dips and selling the rips) that I employ in an attempt to "ring the register" and complement my longer-term investing during periods in which the indices are in a "defined" trading range.

It is also a strategy I execute during volatile trading periods — much like we have faced in the last few months.

It is done dispassionately and with a sense of the S&P Index's "intrinsic value" calculation.

Yesterday's execution was a good example of profitably employing a trading strategy in a volatile backdrop.

From Monday:

It Was a Good Day Trading

* Home, home on the range

* Out of indices now

I just took off my last (SPY) and (QQQ) shorts at $537.63 and $456.14, respectively, for $3-$4 gains in less than an hour. (Add on the +$5 gain in SPY and +$7 gain in QQQ previously (a few hours ago) makes for +$8 and +$10 index wins in a matter of hours. (That's good enough for government work!))

From 3:10 p.m. sales

Selling the Rips, Buying the Dips

You can tell from my actions that I am selling the rips and buying the dips.

I am back shorting the indices:

* (SPY) $541.10

* (QQQ) $459.65

Position: Short SPY (VS), QQQ (VS)

By Doug Kass Apr 14, 2025 3:10 PM EDT

Note: I am now out of all Index positions.

Position: None

By Doug Kass Apr 14, 2025 5:00 PM EDT

The S&P Short Range Oscillator dropped for the second day in a row. It is standing at a still oversold -4.17% vs. -6.42%. It was an elevated -9.55% the previous day, so its come in a ton.

* At 5:28 a.m.

I am back shorting the indices (but in "baby steps"):

* SPY $540.52

* QQQ $459.54