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Hot Tips

  • October 21, 2020

    1. The Google Antitrust Suit is on,

      with the Department of Justice and ten republican states bringing their action today. It will last for years and the DOJ will lose, as they did with the AT&T merger. Coming two weeks before the election it reeks of politics. Google thinks the suite is “deeply flawed.” It’s the first time in history antitrust suit was brought where consumers get the service for free. How much have you paid Google lately? If Google were based in Texas, Florida, or Kansas, this suit would never be happening.

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    2. US Housing Permits Blow the Roof Off

      at 1.553 million, up a staggering 22% YOY and a 13-year high.  I wondered why I was suddenly getting a lot of flat tires on the freeway. They’re caused by nails and screws falling off the back of pickup trucks on the way to jobs. The long-term structural housing shortage continues. 30-year money at 2.75% makes a big difference.

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    3. Netflix Gets Crushed,

      missing subscriber growth targets by a wide margin. The salad days of the “stay at home” boom are now firmly in the rearview mirror. Nearly half of their subscriber growth came from Asia, especially South Korea. The US is already (NFLX) saturated. I’ll keep watching Schitt’s Creek anyway, the top Emmy earner. The company now has over 1,000 shows in production after a long content drought.

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    4. Snap Explodes,

      with the shares up a stunning 18% off blockbuster earnings. The multimedia messaging and photo-sharing app, home of Snapchat, lost only $200 million in Q3, down 12% YOY. Daily users jumped from 238 to 249 million on the quarter. The app is a favorite of the under 16 crowd.

       

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    5. Goldman Sachs Agrees to $2 Billion Fine,

      the bitter fruit of its misadventure in Malaysia. The case from the DOJ has been a drag on the stock for years where claims went as high as $5 billion. Helping foreign despots launder money has never been a profitable business model.

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  • October 20, 2020

    1. China’s Economy Soars by 4.9%,

      in Q3 YOY with the pandemic in the rear-view mirror. First into the Coronavirus brings first out. Retail sales are through the roof and industrial production and business investment are accelerating.

       

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    2. NAHB Index Soars to 85,

      from 82 in August to an all-time high. The housing market is the hottest it has ever been. All the action is in single-family homes, material costs are through the roof, and labor shortages are severe. Good luck finding a handyman these days. The big question is whether the boom will spread to the rest of the economy. I think it will.

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    3. Biden Tax Plan Could Raise California Max Tax Rate to 62%.

      Ah yes, but we’ll be allowed an extra $100,000 in deductions after state and local tax deductions are restored and the limit on home mortgage deductions is lifted. Sounds like a win to me. This is why real estate prices in the Golden State went nowhere for three years until Biden started to pull ahead in the polls.

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    4. Goldman Sachs Says a Blue Wave Will Increase Spending

      and boost the stock market. Total one-party control of the government eliminates the haggling that we are currently seeing in Washington and will deliver more Covid-19 aid faster. It should more than offset the ill effects of tax increases on the economy. This is now the conventional view.
        

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    5. IBM Bombs,

      delivering a third consecutive quarter of losses when the rest of tech is making money hand over fist. It’s so last century. That’s why the company is breaking itself up. Avoid (IBM) like last week’s fish.

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  • October 19, 2020

    1. Pelosi Gives Trump 48-Hour Deadline

      to reach a stimulus deal. If not, the country is going to have to wait until January. The House clearly has the strong cards. The House passed its bill in March. No deal could bring the pre-election selloff I have been expecting. Stay short the (SPY).

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    2. US Corona Cases Approach 70,000

      as the US epidemic takes a run at a third peak. Any higher and markets will start to notice….to the downside. The disease is rampant in the upper Midwest and several battleground states. Europe is looking bad too, with the Czech Republic showing the greatest per capita infection rate. Where can you walk around Corona-free? China, which moved the soonest, and the harshest against the virus.

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    3. Solar ETFs are Tracking Biden Poll Numbers

      to the upside. The Invesco Solar ETF (TAN) is up an eye-popping 212% since April. The expectation is that the former vice president will deliver a new golden age of alternative energy subsidies. Has anyone wondered by Tesla (TSLA) is going up? Its last round of subsidies ran out five years ago.

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    4. Baby Boomers are Unloading Stocks,

      to Gen Xers mostly, but Millennials as well. Of course, they have all the money, with a 53% ownership of all stocks, compared to 27% for Gen Xer’s and a mere 3% for Millennials. The Greatest Generation, born before 1946, have been shrinking their share ownership since 1990 and own only 17% of the total now. A coming jump in capital gains taxes will accelerate the process.

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    5. American Air to Return 737 MAX to Service

      by yearend. Possibly, maybe. Hopefully, the FAA will sign off on all the sensors and software fixed by then. If so, Boeing is about to take off into orbit. Buy (BA) on dips.

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  • October 16, 2020

    1. Weekly Jobless Claims Balloon to 898,000,

      now that California is reporting again. Not what you want to see going into an election. A slowing economy and spreading virus don’t help either. Some 25.5 million Americans are out of work.

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    2. Morgan Stanley Blows it Away,

      cashing in on this year’s frenetic trading. Picking up E*TRADE for $13 Billion and Eaton Vance for $7 billion will further add to the bottom line. Profits from wealth management jumped to $4.7 billion. I remember when total assets under management were $4.7 billion. Buy (MS) on dips. It will be a great “roaring twenties” stock.

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    3. Tesla Cuts Model S Prices,

      to under $70,000. The game here is market share, not profits. The Model S only accounts for 5% of Tesla’s total sales. Don’t waste time looking at any other electric car maker. Tesla is too far ahead.

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    4. US Producer Prices Pop

      in September, bring the first YOY gain since March. They were up 0.4% following a 0.3% gain in August. Another sign of a recovering economy.  

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    5. GM to Offer Electric Hummer,

      at the Tuesday World Series opener. I thought this was a joke when I first saw it. An hour late and a dollar short. Never find that the car doesn’t exist yet. Production doesn’t begin for a year. Avoid (GM) like last year’s clunker.

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  • October 15, 2020

    1. Wall Street Dives on Mnuchin Pessimism

      over getting a stimulus package through before the election. It was never going to happen. Trump wants to hand the democrats an economy laid waste. Stimulus has been the main support for the stock market for the past month. Sell rallies.

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    2. United Loses $1.8 Billion,

       in Q3, one of the worst airline losses in history. And with Washington gridlocked on more aid, there is no light at the end of the tunnel. Tens of thousands of furloughs to follow. Avoid (UA).

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    3. Goldman Sachs Profit Doubles,

      or some $3.62 billion on $10.78 billion in revenues, thanks to exploding bond trading. It helps to have a government running the printing presses like crazy. Buy (MS) instead.

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    4. Ships are Backed up in Los Angeles

      waiting to unload. America’s import boom and soaring trade deficit with China leaves no available dock space on the west coast. It’s another sign of a recovering economy.

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    5. 2020 Boeing Orders are Negative 996,

      most due to cancellations of the grounded Boeing 737 MAX. (BA) really saved the bacon of most of the world’s airlines by failing to deliver right before the pandemic hit and global airline demand collapsed. Still, it’s a record you don’t want to hold. Buy (BA) on dips.

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