At 4:19 p.m.

Low Volume

- NYSE volume 33% below its one-month average;

- NASDAQ volume 29% below its one-month average;

- VIX index: up 14.13% to 33.84

Closing Breadth

S&P Sectors

% Movers

Nasdaq 100 Heat Map

Here are today's "things":

* Adds to technology: 

AMZN 167.75

META 484.40

MSFT 362.28

NFLX 991.00 (covered short)

* I added to these financials: 

APO 123.15

BX 124.93

KKR 99.07

* Added to Cannabis:

GTBIF 5.21

MSOS 2.39

* These ETFS sere purchased:

IWM 181.62

QQQ 432.23

SPY 514.57

RSP 158.67

* I added to long

DKNG 32.27

At 2:18 p.m.:

Posted with no comment.

From Charlie:

The Week in Charts (4/21/25) - Charlie Bilello's Blog

Our office has lost power.

Hopefully back soon.

- NYSE volume is 42% below its one-month average;

- Nasdaq volume 26% below its one-month average;

- VIX index: up 12.65% to 33.40

Back to buying DKNG at $32.26 after having sold much higher earlier in the year:

Cashing in Some DraftKings

I am selling more (DKNG) over $46.

Position: Long DKNG (VS)

By Doug Kass

LONG DKNG S

Feb 13, 2025 3:45 PM EST

With S&P cash -107 handles, I have aggressively added to a number of individual names as well as the Indexes (SPY, QQQ, IWM and RSP).

There are too many to detail now (as I am trading actively) but will review prices in "Things Today."

This morning I am going back to an old theme of mine.

This is a chart of ground beef prices going back to 1984. They were pretty stabile over time. Over the 25 years between 1984-2009, they went from ~1.34 to ~2.15. That is a CAGR of almost exactly 2%, interestingly bang in line with the Fed's target of 2% inflation: 

In the 15 years since then, beef prices have gone from 2.15 to 5.8. That is a CAGR of ~7.5%.

Beef is one of the simplest of commodities, with substantial local production. We were a net exporter of beef as recently as 2022: 

U.S. total beef and veal imports and exports 2024| Statista

What happened since 2009 that caused the rate of inflation of ground beef to almost quadruple? The price of ground beef started to skyrocket in the 2009-2022 period when we were still largely in a net export position.

My guess, it was all the money printing that kicked in locally and globally post the 2008 Great Financial Crisis, when monetary authorities globally went drunk with monetary experimentation, thinking they were the Wizard of Oz and they had it all figured out and monetary heroin was the cure to all structural ills. I do not think there was a massive regulatory change or cattle flu, especially in the 2009-2020 period, when prices started gapping up, perfectly consistent with the money printing post the GFC.

In retrospect, all they did was turn the world into even bigger heroin addicts, where more bad policy and behavior worked its way into the system. Bad behavior is what one should expect when the world is high on drugs.

What percentage of people eat ground beef and eggs? What percentage own stocks? I guess he who is closest to the monetary spigot drinks the most, those that are furthest from it eat the least. And this is part of why we are where we are, and why society has become so divided.

I wish I was more tech savvy, but it would be interesting to see the price of equities (Dow and S&P) adjusted for the price of ground beef, and even gold, over the same time period.

Finally, here is what I wrote about the subject three years ago:

Two-year stacked inflation below.

Part of the bet those who were playing for a downside surprise in inflation was that the comps are getting harder now. Oops. Anyway although headline inflation looks to be hanging in around the neighborhood of 8.5%, the two year stack is still getting worse every month and has gone 8.9, 9.6, 11.1, 12.5, 13.6! Also beyond trading perturbations, it is a bit silly to play that game, because even if inflation printed a tad lower than expectations, the absolute level would still be grossly high, while being understated by 500bp plus due to OER and other issues. While this is going on, and the politicians are out producing prime time TV shows……

Upside:

-MLEC +14% (enters into transformational transaction expanding across multiple technology platforms)

-IVVD +9.5% (announces $30M non-dilutive Loan Facility with Silicon Valley Bank)

-DFS +6.5% (US regulators approve deal to be acquired by Capital One)

-COF +4.2% (Tier1 firm Maintains COF with Buy, price target: $232)

-NTLA +2.2% (Wolfe Research Raised NTLA to Outperform from Peer Perform, price target: $21)

-NFLX +1.9% (hearing Phillip Capital Raised NFLX to Neutral from Reduce, price target: $950)

Downside:

-HTZ -9.2% (profit-taking)

-TSLA -4.0% (reportedly to delay US launch of cheaper Model Y by months)

-NVDA -3.3% (downside momentum)

-ACLS -2.1% (B. Riley FBR, Inc. Cuts ACLS to Neutral from Buy, price target: $50)

-NNDM -2.0% (unit Desktop Metal has commenced a process to explore all available strategic alternatives to address its liabilities and liquidity needs)

-AMZN -1.8% (Raymond James Cuts AMZN to Outperform from Strong Buy, price target: $195)

I have to take a family member for a routine surgical procedure.

I will be gone between 9 a.m. and 11 a.m.

Radio silence.

Most active premarket ETFs as of 8:14 a.m.:

Premarket percentage movers at 8:33 a.m. ET:

From Peter Boockvar:

Weak dollar, higher gold, higher yields, lower stock trade is on again/Covid 2.0 with global trade flows/Interesting earnings and tariff comments

Another day of a weaker dollar, higher gold prices, higher bond yields and lower stocks. While some might say that a weaker U.S. dollar could be a lift to U.S. exporters, the problem with that is about 40% of goods imports are intermediate goods that end up in the finished product. That is now getting more expensive instead on top of the 10% global tariff and other tariffs like autos, steel, and aluminum. Will this quicken reshoring? Unlikely as the cost of construction has now jumped again and where do you think much of the equipment needed to build out a facility comes from? China. And, the weaker the dollar gets, the more expensive these tariffs also become for the US consumer.

DXY

With respect to trade, from everything I'm hearing and reading, we are experiencing a Covid 19 type shutdown of global supply chains in response to the tariffs, particularly on China, except we don't have to wear masks nor social distance. Lori Ann LaRocco wrote on CNBC.com last Wednesday that "Cancellations of Chinese freight ships begin as bookings plummet." In the piece, "A total of 80 blank, or canceled, sailings out of China have been recorded by freight company HLS Group. It wrote in a recent note to clients that with the trade war between China and the US leading to a demand plummet, carriers have started to suspend or adjust transpacific services."

More, "Major ocean freight alliance ONE has 'suspended until further notice' a route it had previously been planning to bring back in May, which would have included ports of Qingdao, Ningbo, Shanghai, Pusan, Vancouver, and Tacoma. Meanwhile, an existing route is planning to cancel its port call at Wilmington, North Carolina."

"If each sailing was carrying 8,000 to 10,000 TEUs (twenty-foot equivalent units), that would equal a decline in freight traffic of between 640,000-800,000 containers, and lead to decreased crane operations at the ports, lower fees that could be collected, and declines in container pick-ups and transports by trucks, rails, and to warehouses for storage." Thus, the impact is broad and deep. 

A real mess I say and I fear the large number of small businesses that are not going to make it through this. I'd argue that the extreme tariffs on China, and those on us, are going to hurt the US more than China. And I'll say again, expect empty shelves of certain things in the next 30-60 days.

I saw a story today on Bloomberg News, "China slashes US commodities purchases as trade tensions worsen." In it, "China's imports of many US commodities decreased sharply last month, with some falling to zero." There were NO purchases of US LNG and wheat in March.

In an early sign of the collapse in global trade, South Korea's exports in the first 20 days of April fell 5.2% y/o/y while imports dropped by 11.8%.

With the shakiness in the stock market, I'm looking for any clues on whether it's impacting upper income spending as we know without them, we can guarantee ourselves a recession. If you didn't see this article last week in the WSJ, "Wealthy Buyers are Backing Out of Multimillion Dollar Home Deals." It said, "market gyrations and tariffs, both current and pending, are casting a shadow on high-end property as buyers pull out of deals or tap the brakes amid global economic uncertainty." The article reminded us that the top 10% of wealth holders have 36% of their total assets in stocks and mutual funds citing new data from Realtor.com. 

On to some earnings calls.

From AmEx:

"In T&E (travel and entertainment), while we saw a sequential slowdown in airline billings growth, billings in restaurants and lodging remained strong in the quarter, and overall T&E growth was in line with the steady levels we saw through most of last year."

"While it's still very early in the 2nd quarter, through the first week and a half in April, overall spending levels have remained consistent with what we saw in the first quarter in both goods and services and T&E, and across all customer segments."

"We also continued to grow our customer base, adding 3.4 million new cards in the quarter. As in past quarters, Millennial and Gen-Z consumers made up over 60% of new customer accounts acquired globally in Q1."

"our credit performance continues to be very strong. Both delinquency and write-off rates were below pre-pandemic levels and flat to the prior year. The profile of the portfolio has strengthened over the past few years."

To a question on whether the strength in spend they are seeing is the result of consumers and businesses pulling forward purchases ahead of the tariffs, they said "So, look, we really haven't seen any pull-forward at all...We see a little bit in small business and a little bit in wholesale pull-forward, but I mean, you're talking a couple of points here. You're not talking about anything significant. So, I don't think that's been a phenomenon. Having said that, it's still early in the game, right? I mean, we're early innings here, and we'll just have to see how it all plays out. But just to be clear, from a consumer perspective, we see no pull-forward at all."

From Ally Financial who does a lot of auto lending:

"the favorable trends in the credit quality were partially offset by elevated levels of overall delinquency and ongoing macroeconomic uncertainty. As we have said before, we do not forecast reserve releases and they are not incorporated into our mid-teens return guidance, but we continue to be encouraged by the trends of the overall portfolio."

They are seeing some pull-forward of auto purchases ahead of the tariffs. "There may be a pull forward in demand. I will say the recent volume numbers that we've been seeing have been quite strong and there's a thesis floating around that some pull forward. There's probably some truth to that. It's hard to be really precise. But that's what we see in the near term."

Manpower stock fell 19% on Thursday and they said this:

"We began the year with a sense of optimism for economic growth in the US particularly and a greater acknowledgement among EU policymakers that Europe needed to do more to remain competitive. The last several weeks have impacted this sense of confidence and the mood is significantly more uncertain and cautious as a result of recent trade policy announcements in the US with ripple effects far beyond. At this stage, most of our clients are adopting a wait-and-see approach and it is difficult to provide any concrete assessment of how significantly this might affect demand from our customers in our major markets around the world."

"In the first quarter, we saw the continuation of a challenging environment in Europe and North America, while demand for our services in LATAM and APME remained good...permanent recruitment softened further and we saw reduced outplacement volumes which impacted our margins."

"Based on what we see today, we expect employers to continue to cautiously look at hiring select talent, particularly those with in-demand skills that will enable their business to transform."

From Snap-On, a company that sells equipment to auto repair technicians and shops:

After highlighting the big picture positives of aging cars that need fixing, "the technicians are among those who are daunted by the current turbulence. Many of them believe we're going to a more positive place, but they fear the economy will careen off the rails before we get there. Those people who work are part of the broad group driving the drop in consumer sentiment, but even though they're now cash rich, they fear they don't have the financial cushion for an off the rails event as such. And as such, they're reluctant to embrace finance products, items like tool storage boxes or top of the line diagnostics. We can see it clearly in the double-digit drop in our credit company originations."

From the Fifth Third Bank CEO and what he is hearing from their customers having to manage their a trade war:

"So I had the opportunity to speak with something on the order of 50 different business owners, most of which ironically were in materials, manufacturing, transportation, logistics, energy and a few folks in automotive and healthcare and other sectors. And I would say that magnitude of the tariff announcement caught them all by surprise, the base level, 10% reciprocal - the 10% in port tariff wasn't surprising. It was all of the other activity. The magnitude probably split basically 50-50 between those who interpreted the announcements as a negotiating tactic and believe that we're going to settle out in a much more reasonable place that may actually give American producers better access to foreign markets and the 50% who are really nervous that the tariff in particular, the tariffs that impact major supply chain countries, China, Vietnam, the Pacific Rim and otherwise are going to stick at more elevated levels."

And how will they respond? "And I would say universally, their belief is that what the only way they really have to respond in the near to medium term is to push prices. So folks with international supply chains will need to push prices to cover tariffs, they can absorb it in margins. Many of them are tussling with retail distribution partners who are pressuring to absorb some or all of the costs. But they believe that because these are structural changes that manufacturers really do believe they're going to be able to push the price."

This was of note too, "What was maybe a little bit interesting to me is that the folks that have domestic supply chains were also saying they have to move prices in the US, because they're expecting that if the tariffs hold, they're going to experience volume losses in foreign markets and they're going to need to make up, they require a certain amount of gross margin dollars just to be able to cover overheads and run their businesses. And the other thing I would say is most of them are not waiting for the tariff rates to be finalized to start work on pricing."

From L'Oreal:

"The US were more challenging than anticipated, and China was slightly less bad than expected. Europe was once again our single best growth contributor. Emerging markets remain dynamic."

As we expected, Netflix NFLX has given back most of its post EPS gains.

I covered the balance of my NFLX short at $987.50 for a profit.

I added to my Index trading long rentals:

* SPY $519.79

* QQQ $437.14

I took a very small trading short rental in Netfix NFLX (initially at $977.94) right before the earnings release.

After the gap following the better results I tripled down at about $116 (reported in Comments Section).

I just covered about 3/4 of my NFLX short in the premarket at $994.50 for a small gain.

From Neil The Real Deal:

I added to Amazon AMZN at $169.96.

* As seen below, many technical analysts are now all over the outperformance of the world indices vs. U.S. - caution is suggested by this observor!

Bonus — Here are some great links:

Global Markets Wake Up

Defense Holds Strong

Bull Market, Bear Market or Something in the Middle

Investors Should Sell Strength

The S&P Short Range Oscillator slipped from -5.51% to -2.43%.

It is less oversold.

I have taken a long trading rental in the indices (at 5:25 a.m.):

*SPY $520.73

* QQQ $438.55