DHUnplugged #311: The Failure of Kitchen Sink Economics

Key economic leaders in Europe downgraded future growth expectations and lowered their outlook for inflation. This is in the as they have provided record stimulus and gone so far as applying negative rates.kitchensink

China is still slowing and earnings have been so-so at best. Where do we go from here?

In this episode we take a look at some  of the top business news as well as the DHUnplugged take on the media spin. What you should be looking for to make those all important investment decisions and what not to do – plus a few ideas from us to you…

Click HERE for Show Notes and Links

It was a tough ending for the week as some of the big, well known names dissapointed investors with weak earnings and guidance - with the exception of Facebook (FB) and Amazon (AMZN)...

Breaking news - Cruz suspends Presidential campaign

BOJ's Kuroda decides to do nothing in the most recent rate meeting and the Yen goes haywire! Yen moves UP by 4% and Nikkei moves down by ~ 8% in 2 sessions as investors were all set for another round of massive stimulus from the BOJ. So why isn't the Kitchen Sink approach to economics failing?

Yen Chart

If anyone thought that the global stimulus program may be over - look no futher that the surprise move by Australia last night - cut rates again - by 0.25%.

The default rate on energy H/Y bonds now at 13% - surpassing the previous record of 9.7% set in 1999. (Ultra Petroleum and Midstates petroleum are latest victims of low oil prices)

And... U.S. Steel: Moody's downgrades U.S. Steel's CFR to B3; assigns B1 rating to senior secured note offering; outlook negative.

In a "bold" move - Chipotle (CMG) is thinking about a breakfast burrito - Now where did they get that idea from?

Serepta Therapeutics - WOW - Upgraded as there is still hope - stock up 120% since 50% sell off..

Puerto Rico missed debt payment and likely default - will they be bailed out of this?

Now this is too much in every way: On Friday, Yahoo!  disclosed the packages that will be available to key executives if they are ousted in the event of a sale. Mayer will be paid $54.8 million in cash and stock if she's removed from her job within a year of a sale. [LINK]

DHUnplugged Closest to the Pin Contest for Gap

Currently week CTP = Domino's Pizza

Announcing new longer CTP ... Intel (INTC) - 5/27/16


Winners will be getting great stuff like the new DHUnplugged Shirts (Designed by Jimbo)dh_CTP2DHU's Official Model - Vivi Jugo

Starbucks iced coffee contains too much ice, not enough coffee, lawsuit claims - “Starbucks is misleading customers who expect to receive the advertised amount of fluid ounces,” states the class-action lawsuit, which was filed last week in federal court. “For example, if a gallon of gas is advertised as costing three dollars, and a customer pays three dollars and pumps gas, that customer is expecting to receive a gallon of gas — not approximately half a gallon.”  [LINK]

What is Dvorak writing about for PC Magazine?

I like this idea: A new crop of startups are trying to make gas stations obsolete. Tap an app, and they'll bring the gas to you, filling up your car while you're at work, eating breakfast, or watching Netflix. Filld, WeFuel, Yoshi, Purple and Booster Fuels have started operating in a few cities including San Francisco, Los Angeles, Palo Alto, Nashville, Tennessee, and Atlanta, Georgia. But officials in some of those cities say that driving around in a pickup truck with hundreds of gallons of gasoline might not be safe.

Interesting discussion about the real estate markets in areas heavy with tech and startups. Last week's TDI Podcast explored some of the recent trends and an alert to what properties to sell and where to redeploy the money [LINK]

Interesting headline on earnings tonight - Zillow (Z) reaffirms adjusted EBITA guidance for FY16 - Adjusted EBITA?

The island was unable to make a $422 million debt payment due Monday. It's another alarm bell of how bad the situation is getting on the island. Governor Alejandro Garcia Padilla calls it a "humanitarian crisis," which a step above an economic emergency. He claims he is prioritizing paying Puerto Rico's police and teachers over Wall Street. (Will there be another bailout coming?)

Stealing small amounts of food to stave off hunger is not a crime, Italy's highest court of appeal has ruled. Judges overturned a theft conviction against Roman Ostriakov after he stole cheese and sausages worth €4.07 (£3; $4.50) from a supermarket. Mr Ostriakov, a homeless man of Ukrainian background, had taken the food "in the face of the immediate and essential need for nourishment", the court of cassation decided. Therefore it was not a crime, it said.

Have not seen this in a while: Police said Tuesday that a body found in a plastic bag along the Brooklyn shoreline this week was "obviously" the victim of a homicide -- and that the man's feet were coated in cement.

Uber planning on eliminating surge pricing. That is the story early in the day - but Uber out with comments that is not happening. What to believe?

Here you go: According to the Dubai-based publication Arabian Business, the UAE is in the early stages of evaluating how a man-made mountain could help maximize rainfall in the country, consulting with experts from the U.S.-based National Center for Atmospheric Research (NCAR) to study the idea.

Venmo, which is owned by PayPal (PYPL) , said in a SEC filing posted Thursday that the Federal Trade Commission is investigating the service over possible deceptive or unfair practices. ( Venmo, the company's social payments platform, processed $3.2 billion of TPV, up 154% year-over-year.)

See this week’s stock picks HERE

Follow John C. Dvorak on Twitter

Follow Andrew Horowitz on Twitter


DHUnplugged #310: Is Apple (AAPL) Turning Into an IBM?

Not so great of a start for tech earnings. Apple (AAPL) is not keeping up with analyst’s expectations and shares are seeing a sharp move lower. Twitter (TWTR) also reports and disappoints as do other major names. Is this a trend or just a few hiccups?sourapples

Oil is climbing on speculation that inventory levels will finally start to drop – but is this something that is more of a pipe dream? Plenty of news and commentary on markets and other business news of interest.

Click HERE for Show Notes and Links

Oil continues to defy logic as it rises to $44.60 after hours today. Even with record production out of Iraq and news that inventories are expected to rise. The weak economic numbers today helped as the U.S. Dollar continues to lag.

Earnings shows that Tech may have come up a bit too far in the recent rally. Google (GOOG) missed and the stock slid from $750 to $708. Netflix also missed - now at $91.50. Microsoft (MSFT) off by 12% after its earnings outlook was rather disappointing. Apple (AAPL) down 9% as it missed both top and bottom line, guides revenues and margin below estimates - BUT raises dividend and raises buyback to $175 billion (this looks like a $50 billion increase)
- Total buyback of 30% of the company!!!!!

----- Is Apple turning into IBM?

Apple metrics:

  • Q2 iPhones 51.2 mln vs 51.5 mln ests vs 61.2 mln last year. (First ever iPhone sales drop)
  • Q2 iPads 10.2 mln vs 9.9 mln ests vs 12.6 mln last year.
  • Q2 Macs 4.0 mln vs 4.6 mln ests vs 4.5 mln last year.
  • China revenue fell 26% compared to a year ago

Apple suppliers seeing weakness following earnings include: SWKS -4.0%, QRVO -3.9%. CRUS -3.0% (also reported its own earnings), AVGO -2.2%, NXPI -2.0%, QCOM -1.1%, INVN -0.9%, TXN -0.6%.


Twitter (TWTR) beat by $0.05 on bottom line but missed on top and outlook was weak. However they did add 5 million users and MAU was up for the quarter (stock down 12% after hours)

This is big news: Exxon Mobil (XOM): S&P lowers credit rating to 'AA+' from 'AAA', Outlook 'Stable
- There are only 2 companies left in the U.S. that are AAA rated (MSFT and JNJ)

Baby boomers' long reign over the kingdom of American demographics has finally come to an end: Millennials have officially surpassed them as the largest living generation in the U.S. That's according to new population estimates released this month by the U.S. Census Bureau and analyzed by the Pew Research Center. (Millennials, defined by those born between 1981 and 1997, now number 75.4 million)

See this chart - What is Silent?

Population Chart

Guess what is coming tomorrow - Yes, Fed rate decision - what will they do? Stick save for failing earnings or more confusion?

DHUnplugged Closest to the Pin Contest for GoPro (GPRO)

Currently week CTP = Domino's Pizza (DPZ)

Will announce new longer CTP next week...


Winners will be getting great stuff like the new DHUnplugged Shirts (Designed by Jimbo)dh_CTP2DHU's Official Model - Vivi Jugo

How stupid is this? Snapchat has a filter that lets people share how fast they're traveling while they take selfies.
-- A car accident victim is blaming Snapchat's speed filter for a crash that left him with traumatic brain injuries, according to a new lawsuit.The plaintiff, Wentworth Maynard, was merging onto a four lane highway outside of Atlanta, Georgia when his car was struck "so violently it shot across the left lane into the left embankment," his lawyers contend. Christal McGee was allegedly driving the car that struck him. The lawsuit says that she was on her phone trying to use the Snapchat speed filter at the time of the accident.

Seems that Volkswagen was looking to cheat as far back as 2006 -  A presentation discovered as part of the investigations into Volkswagen provides a direct link to the genesis of the deception, involving vehicles equipped with software to cheat on the tests.

Thoughts on the current Presidential campaigns?

Is this a good thing? The Bank of Japan may become an even bigger shareholder of the nation’s equities if policy makers decide to boost stimulus this week. The central bank’s holdings have been rising since it began buying Japanese exchange traded funds at the start of the decade, and now account for more than half of those ETFs. (also now the largest shareholder in many of the stocks listed on the Nikkei 225)

BOJ Holdings

What is Dvorak writing about for PC Magazine?

Twist - Electric vehicles in Hong Kong may indirectly be the cause of almost 20 percent more carbon dioxide emissions than gasoline-fueled motors, undermining the city’s efforts to get ‘green’ cars on the road, according to Sanford C. Bernstein.

Last week's TDI Podcast - introduced a new way for investors to track their results and have opportunity to gain outside funds to manage with Jack Schwager. Pretty cool concept.

See this week’s stock picks HERE

Follow John C. Dvorak on Twitter

Follow Andrew Horowitz on Twitter


DHUnplugged #309: Deal or No Deal

No DEAL! Nothing was done at the bu Opec/Non-Opec gathering over the weekend, but oil continues to rise. dond

Earnings are starting to come in and so far there is nothing to get too excited about. Banks are beating estimates, but bad loans are growing and volumes of equity trading and fixed income are plummeting.


Click HERE for Show Notes and Links

Cue the Trumpets! DJIA over 18,000 and S&P 500 over 2100!

NADA in DOHA - No Deal on oil production freeze. Doomed from the start... However... Oil at $42
-- Kuwait strike takes 1.6m barrels/day offline
-- Nigeria has pipeline issue
-- IRAQ production interrupted

Crude Chart

Saudi Arabia - threatened to sell all their U.S. Treasury holdings - estimated at $750 billion my some if the 28 pages of redacted information on the 9/11 report is released. Also pending legistlation that would allow for victims of 9/11 to directly sue... (Not going to pass - or is it?)

IBM now racks up 16 consecutive quarters of declining revenue. EPS beat, but company is still suffering - Stock up near $143 (was $117 in February)

Yahoo! - Verizon still seems to be the front-runner in the "bidding" for Yahoo! assets/company. What does this do for them? Seems like the old Time Warner /AOL deal.

Seeing more sporting goods stores file for bankruptcy - The owner of Eastern Mountain Sports, which has 13 stores in Massachusetts, and Bob's Stores, which has 11 Bay State locations, has filed for Chapter 11 bankruptcy, with debts over $500 million.

Sport Chalet has announced the closure of all its stores in the next several weeks. The Southern California-based sporting goods company owns 47 stores in about 50 locations in California, Nevada, Utah and Arizona. The company issued an online statement saying that its stores have begun the process of closing on April 16, but it offered no explanation. The company stopped selling merchandise online but its retail stores will remain open for several weeks in order for customers to use their rewards and gift cards.
-- At the same time there is rumor that Bass Pro Shops is possibly looking to buyout Cabelas (CAB)

Goldman Sachs Group Inc., the worst performer in the Dow Jones Industrial Average this year, posted a 60 percent drop in profit as the firm reported its lowest revenue for a first quarter since Chief Executive Officer Lloyd Blankfein took the top post.

Goldman Sachs Chart

Netflix (NFLX) - earnings out and while the company beat expectations, the outlook was miserable - at best. Stock down 11% to $96 after saying that international growth will expand much less that expected and investors seeing more competition from Amazon and others.

Intel (INTC) earnings were messy. Overall not a good outlook for the next quarter or so. Reducing outlook, cutting 11% of workforce and announced restructuring. Shares slipping again down to the $30 support level.

DHUnplugged Closest to the Pin Contest for Transocean LTD

Currently week CTP = GoPro (GPRO)

ANNOUNCING - Domino's Pizza (DPZ)


Winners will be getting great stuff like the new DHUnplugged Shirts (Designed by Jimbo)

Sunglasses from Spitfire and more!dh_CTP2

DHU's Official Model - Vivi Jugo

Apple (AAPL) - announced last week that they will be slowing down production as inventory builds are seen. Same game plan as last quarter ? At that time suppliers tanked and then ramped higher when sales were not seen as soft as expected.

Back on the "no privacy" train: In its latest report on government requests for user information released Monday, Apple revealed U.S. law enforcement agencies lodged 1,015 requests for customer account information affecting 5,192 users in the second half of 2015. (Not time to be a criminal like the old days)

Smart mattress: Sleep tracking is nothing new, but one company wants to track when your mattress is being used, especially if you're not home. (WHY???)

And now - the Bloomberg Top 10 biz schools (under-grad)  [LINK]

Bloomberg Top 10 Undergrad Biz Schools

UnitedHealth Group (UNH) said it would remain in only a very small number of the Affordable Care Act’s marketplaces next year and suggested that it doesn’t currently see a way to run the business effectively.

Who should be on the $10 bill? Treasury Secretary Jacob Lew planned last year to announce a redesign of the $10 bill that would put Susan B. Anthony on the front, but he changed course and decided to ask the public which woman should go on the bill. (Is this a smack to the face of Hamilton? and is the only woman in history they can think of?)

Scam: Theranos...Federal prosecutors are investigating whether the blood-testing company misled investors about the state of its technology and operations.

In some cases in Denmark and Sweden, banks are paying the homeowners mortgage interest as negative rates hit hard.

Saw this while waiting in doctor's office...

  Adult Coloring

And to finish it off - Friday is Earth Day - what are we doing to celebrate?

See this week’s stock picks HERE

Follow John C. Dvorak on Twitter

Follow Andrew Horowitz on Twitter


DHUnplugged #308: Chatbots – Your New Best Friend

Earnings will be in the spotlight as the season has officially opened. It is time to find out if the fundamentals match the technical conditions.chatbots

Chatbots are the all the rage – Microsoft’s failure and Facebook’s foray are on the list of topics we discuss.

Crude surges as inventories see the biggest drawdown for 2016 and rumors are floating about regarding the potential for a production freeze by Russia and Saudi Arabia.

Click HERE for Show Notes and Links

Oil surges above $42 on hopes of a production freeze (again) and the 4+ million barrel drawdown we saw last week. Also, rig counts keep falling and short sellers of the commodity are getting squeezed. Equity markets were not that happy - losses of 1%+ across major indices.

Weekly Crude Inventories

Oil Price Surge Chart

NYC Birthday Update - JCD

-- News: Headlines today that Saudi Arabia and Russia have come to a consensus on an oil output freeze; Markets and oil spiking in reaction (WTI Crude spikes to $41.60+ or 3.5%)

Earnings season begins! Alcoa (AA) beat the $0.03 estimate by $0.04 but revenues missed and guided down aluminum production for the coming year. Many of the big banks start to report this week as well. (JPM) (BAC) (WFC)

Goldman Sachs (GS) finally has been forced to pay up for their part in deceiving investors about the mortgages that were sold leading up to and during the mortgage meltdown/crisis. $5 billion is the cost - stock was up on the news...

Tesla (TSLA) - Took deposits on more than 350,000 Model 3 the first week. Production problems? (Just announced, a recall of 2,700 Model X)

-- Base price of the Model 3 ~ $35,000. With a $7,000 tax credit, that makes cost of car very very cheap!

IMF Fund sees world GDP expanding 3.2% in 2016, 3.5% in 2017 (They have poor record of forecasting and usually err on the optimistic side)


DHUnplugged Closest to the Pin Contest for US Steel (X) and Michael Kors (KORS)

Currently week CTP = Transocean LTD




Winners will be getting great stuff like the new DHUnplugged Shirts (Designed by Jimbo)

Sunglasses from Spitfire and more!dh_CTP2

DHU's Official Model - Vivi Jugo

U.S. government putting together regulations to stop/inhibit inversions. Allergan/Pfizer deal is busted.
-- Obviously there is now the overhang that U.S. will be putting the clamps on corporate tax avoidance - what is next? Overseas profits?
-- U.S. citizens must pay tax on worldwide income - but U.S. corporations do not --- yet.

Panama papers - that is something that is going to be a thorn in the side of some politicians for some time. Iceland PM resigned last week after he was found to have secret offshore account.
-- HOW DID 1 million pages of documents get hacked/leaked?

Goodbye Privacy - Uber Technologies Inc released its first ever transparency report detailing the information requested by not only U.S. law enforcement agencies, but also by regulators. The ride-sharing company said that between July and December 2015, it had provided information on more than 12 million riders and drivers to various U.S. agencies.

Back to the negative rate fiasco - Japanese loan growth slowed to the weakest pace in three years in March, signaling the central bank’s introduction of negative interest rates has yet to spur credit in the world’s third-largest economy.

Technology research and advisory company Gartner released data pertaining to first-quarter PC shipments. The report showed a continuation of a downtrend as quarterly shipments fell 9.6%, representing the sixth consecutive quarterly decline.

WSJ: When big banks announce earnings starting on Wednesday, the spotlight will be on massive unfunded energy loans that most investors didn’t know much about until recently.

-- These unfunded loans have been promised to energy companies that haven’t yet tapped the money. Many banks historically haven’t disclosed these loans but have begun to recently following the extended slide in oil and gas prices.
-- $147 billion in unfunded loans have been disclosed by 10 of the largest U.S. banks

Unfunded Energy Loans

Brazil - A congressional impeachment committee voted to recommend a Senate trial for President Dilma Rousseff on charges of manipulating public finances.

What is wrong with people? An airliner flying from Hawaii to Japan was forced to turn back and land in Honolulu after a passenger insisted on doing yoga in the galley in defiance of the crew, an FBI spokesman said on Thursday.

New craze? Coloring books, once seen only as a pastime for children, have become a growing craze for American adults looking to unwind or test their creativity with coloring pencils.

Microsoft's BadBot: Almost a week after being shut down for spewing racist and sexist comments on Twitter, Microsoft Corp's artificial intelligence 'chatbot' called Tay briefly rejoined Twitter on Wednesday only to launch a spam attack on its followers.
-- (JUST IN - Facebook is building a chatbot) - what is this all about?

New York - potential legislation to have roadside checks after accidents to see if driver was texting. Under the first-of-its-kind legislation proposed in New York, drivers involved in accidents would have to submit their phone to roadside testing from a textalyzer to determine whether the driver was using a mobile phone ahead of a crash.

See this week’s stock picks HERE

Follow John C. Dvorak on Twitter

Follow Andrew Horowitz on Twitter


DHUnplugged # 307: The Soft Dove Does it Again!

Another day, another speech. This time from Chairman Yellen who now says that inflation readings are transitory and the Fed has more scope for further accommodative actions. In other words : MORE STIMULUS as their outlook is looking wrong again. So, if at first (or second, third etc) you don’t succeed, try try again.yellen1

Whether or not markets continue to hold on to the notion that a carrot dangle will magically propel the economy is uncertain, but what other choices are there?

GDP revisions, employment report on the horizon and plenty of news you need to know…. All packed into this episode.

Click HERE for Show Notes and Links

Markets have been trading sideways - up to resistance and then slowly stagnating. Volume has been anemic. Monday volume lowest of the year. Then....

Yellen speaking today in NY - dovish as can be... Here are a few of the highlights

  • Importantly, this forecast is not a plan set in stone that will be carried out regardless of economic developments. Instead, monetary policy will, as always, respond to the economy's twists and turns so as to promote, as best as we can in an uncertain economic environment, the employment and inflation goals assigned to us by the Congress.
  • Looking forward however, we have to take into account the potential fallout from recent global economic and financial developments, which have been marked by bouts of turbulence since the turn of the year.
  • The Committee continues to expect moderate economic growth over the medium term accompanied by further labor market improvement.
  • There is a consensus that China's economy will slow in the coming years...
  • The inflation outlook has also become somewhat more uncertain since the turn of the year, in part for reasons related to risks to the outlook for economic growth.
  • Given the risks to the outlook, I consider it appropriate for the Committee to proceed cautiously in adjusting policy. This caution is especially warranted because, with the federal funds rate so low, the FOMC's ability to use conventional monetary policy to respond to economic disturbances is asymmetric. If economic conditions were to strengthen considerably more than currently expected, the FOMC could readily raise its target range for the federal funds rate to stabilize the economy. By contrast, if the expansion was to falter or if inflation was to remain stubbornly low, the FOMC would be able to provide only a modest degree of additional stimulus by cutting the federal funds rate back to near zero.

Naturally, post comments markets shot higher - except banks

Bank Stocks

What the Yellen commentary is saying is that there is a lot more to fear about the global economy than we think... Her speech had plenty to say about it and it is not usual that the Fed discusses things so overtly if they are not big issues.

Another example: Japan’s industrial production dropped the most since 2011 in February, as falling exports sapped demand and a steel-mill explosion halted domestic car production at Toyota Motor Corp. Output slumped 6.2 percent after rising 3.7 percent in January, the trade ministry said on Wednesday. Economists surveyed by Bloomberg had forecast a 5.9 percent drop.

Small business hiring hot spots. See chart below...

Small Biz Hiring in USA

Crafty plan: Canadian energy companies with surplus cash are buying back bonds on the cheap to help shore up balance sheets amid the worst oil downturn in decades. “If they can go out and spend $100 in cash and buy their bonds at 60 cents on the dollar, it’s a reduction in net leverage,” said Nicholas Leach, a high-yield portfolio manager at CIBC Asset Management Inc.

Virgin America (VA) — The airline's stock continues to be on watch today, after multiple reports Monday said JetBlue and Alaska Air were planning bids for their rival airline. Reuters is also reporting that various Asian airlines may also be interested in Virgin America.

The FBI caved - now THEY have the means to unlock the iPhone...

*** Is there growing apathy about terrorist acts? Quite the week we have had... Brussels, Iraq and a passenger falsely claiming he was armed with explosives hijacked an EgyptAir plane carrying 71 other people and forced it to land in Cyprus.

  • Limited response from markets on any of the latest events.


DHUnplugged Closest to the Pin Contest for Ford (F)

US Steel (X) and Michael Kors (KORS) announced as well... Coming up end of this week -Transocean LTD


Winners will be getting great stuff like the new DHUnplugged Shirts (Designed by Jimbo),
Sunglasses from Spitfire and more!

DHU's Official Model - Vivi Jugo

Well known hedge fund manager Kyle Bass - reportedly owns $20 million of nickles and has advocated owning physical gold and platinum rather than financial instruments tied to the precious metals. (where do you keep all those nickles?)
*-*-*- Bonus Question: How much does $20 million of nickles weigh?   4,464,285.71 pounds

Nippon Telegraph & Telephone Corp., the former telephone monopoly in Japan, agreed to buy technology services businesses from Dell for $3.055 billion as the company seeks to expand overseas to counter an aging domestic market.

Last week we discuss how Lumber Liquidators (LL) shot up on report of settlements that appeared fishy. Since then stock retraced all of the move.

SunEdison (SUNE) - In real trouble now - SEC investigation about their recent report on company liquidity in question. Stock down 50% on the news.

Yahoo — Yahoo has given possible suitors until Apr. 11 to submit bids for its assets, according to the Wall Street Journal. Yahoo is said to be shopping both the core web business and its stakes in Alibaba and Yahoo Japan.(Will MSFT be in the deal?)

A California judge ordered a now-defunct for-profit college chain to pay more than $1 billion Wednesday over claims the company misled students and investors. (How are they going to pay that?)


See this week’s stock picks HERE

Follow John C. Dvorak on Twitter

Follow Andrew Horowitz on Twitter


DHUnplugged #306: The Blackout Looms Large

As earnings season approaches, companies will be in their blackout periods, unable to buy their stocks through certain repurchase plans. Without that added liquidity, what will result?blackout

U.S. markets are flirting with unchanged for the year as the massive rally  over the past few weeks has pushed valuations back into the danger zone, but with central banks showing more desire to stimulate, it may not matter… or will it?

Just last week, the Fed sent a confusing message to markets, now we are “only” to expect 2 rate hikes this year – so much for following the economic indicators.

All this and the winners of the latest Closest to the Pin…..

Click HERE for Show Notes and Links

Terrorists hit Belgium... Once again Europe is the center of attention - just days after the capture of the Paris bombings "mastermind". Two separate attacks, ISIS claims responsibility. U.S. Markets shrug off - Europe modestly lower.  (Recall that the last couple of attacks saw massive market rallies)
-- Of course the usual rumors of other potential acts circulated today as shorts/bears try to push on the news - none were confirmed.

Global Economics - Take a look at the stats for Manufacturing..

Markit PMI Table

Valaent Pharma (VRX) - Remember last week, we questioned whether the CEO's 2-month leave for "pneumonia" was for real? Well... Monday it was announced that CEO Pearson will be leaving the company. Ackman was appointed to board. Stock up 15% in reaction. (Note: CEO leaving does not seem to be good news as it may lead to more revelations about some of the internal issues with the company...)

VRX Chart

Nike (NKE) has announced that a self-tying ( or self adjusting) shoe will be out by the end of the year. Now that seems to be progress!
-- Nike earnings released today  (stock down 5%++ after hours...)
- NIKE Q3 EPS $0.55 vs. $0.48 Capital IQ Consensus; rev $8.032 vs. $8.2 bln consensus
- NIKE Futures Orders +12%; +17% in constant currency vs. estimates in the mid to high teens ex-FX
-- Futures as reported (ex-FX): North America +10%, W. Eur +16% (+23%), C & Eur +5% (+14%), China +28% (+36%), Japan +23% (+24%), Emerging -3% (+14%).

IMPORTANT: Sales will increase by a high-single-digit percentage during the next fiscal year, the company said on a conference call Tuesday. Analysts had projected a rate of about 10 percent for that period. Earnings will rise in the low teens, Nike said, compared with an estimate for growth of about 15 percent.

Nike's "Back to the Future" Shoe

Will liquidity dry up like it did the first quarter before and during earnings season? Retail still pulling out of equities?
Deutsche Bank reports:

Buyback blackout period starts Monday. An increasing number of S&P 500 companies will enter into their blackout period starting next week, about a month before the earnings season kicks into high gear in the third week of April.

If there is any truth to the notion that much of the recent rally was due share repurchase programs, liquidity will start to dry up starting today and we may see some additional volatility and downside potential for markets. Depending on how many institutional investors positioned for the ramp higher, it may create an interesting environment over the next few weeks.


dh_CTP** ANNOUNCING THE WINNER of the DHUnplugged Closest to the Pin Contest **
Tesla (TSLA)

John C. Dvorak !!!!!

Ford (F) and US Steel (X) announced as well... Coming up end of this week - Michael Kors (KORS)


Chirag G. $ 224.21 Winner $ 2.17 0.96%
Charles F. $ 229.07 Runner up $ 2.69 1.19%

Winners will be getting great stuff like the new DHUnplugged Shirts (Designed by Jimbo),
Sunglasses from Spitfire and more!

Markets closed Friday in observance of Good Friday

Thinking about Twitter (TWTR) - some recent changes makes it a more viable platform. Videos, gifs and other feature enhancements... Worth a look?

Some Apple news: (Smaller is better??? - Seems that size is the company's only innovation)

Apple at event unveils new bands for the Apple Watch; says Apple Watch will now start at $299 starting today (prior price was $399)

New iPhone released - 4 inch model

  • iPhone SE will feature 'hands free Siri' and improved battery life.
  • iPhone SE will start at $399; will start shipping on March 31
  • iPhone will feature the 64-bit A9 chip, introduced in iPhone 6s and iPhone 6s Plus, offers iPhone SE customers two times faster CPU and three times faster GPU performance compared to iPhone 5s.

Unveils iOS 9.3 - Software will feature light and dark mode, new enhancements to notes and news applications, and new educational applications.  iOS 9.3 will be available immediately.

Apple confirms ResearchKit advancements; also confirms new healthcare application 'CareKit' - Available April 2016

Apple at event unveils 9.7 inch iPad Pro (current iPad Pro is 12.9 inches)

--- FBI/Justice dept drops their calls for Apple to create a backdoor - they say they have another solution. Really?

Interesting news. SunEdison (SUNE) rumors are that the company is looking for debtor-in-possession financing. This is a tactic used by distressed and bankrupt companies that need financing. This type of debt is AHEAD of all other debt, equity or other assets that can be claimed. How great is that?

Lumber Liquidators Holdings Inc.'s stock soared 14% in midday trade Tuesday, after the wood flooring maker announced an agreement with the California Air Resources Board that "fully" resolves previous inquiries into its laminate flooring products sourced from China. As part of the agreement, Lumber Liquidators will pay CARB $2.5 million, and will implement voluntary compliance procedures to ensure all of its flooring products comply with CARB's formaldehyde standards.(Didn't they have 3X the expected amount of carcinogens?)

Kazakh officials and their visitors will have to leave their smartphones at the door of government buildings from March 24 in line with a new policy aimed at preventing leaks of sensitive documents, a leaked document showed on last Thursday.

Minnesota officials seized a "FMUSLMS" license plate and apologized for issuing it at a driver's request, saying on Wednesday that approval procedures for so-called vanity plates were under review.

Cuba is gaining opportunities for travelers - Carnival Cruise line wins approval to sail to Cuba. We going? DHU Trip?

Poor Elon Musk - He an wife are divorcing for 2nd time. Why marry again after divorce in the first place?

See this week’s stock picks HERE

Follow John C. Dvorak on Twitter

Follow Andrew Horowitz on Twitter


DHUnplugged #305: From Unicorn to UniCorpse

It has been a busy couple of weeks while DHunplugged was on a short vacation. Markets rally, oil climbs and central banks are getting more aggressive.unicorpse

China is still in terrible shape, but investors are still looking for more stimulative actions to come to the rescue.

It will be a big week upcoming with a busy economic calendar and the Fed’s rate decision on Wednesday…

And.. What is with the Unicorns? Write-downs happening quickly as there is a sense that valuations are way to rich for many of these names.

Click HERE for Show Notes and Links

Trip to Panama - had some interesting foods and experiences. (Plenty of Ceviche, Cow Foot Soup, Tripe and more...)
- Panama casinos... 5.5% cash check out charge!
- Diving 2 oceans on one day!

Daylight Savings Time is here! Happy? - Plenty of stories about problems related to the time change... More accidents, less productivity. Really? LINK

Prem Watsa, the investor who heads Fairfax Financial Holdings Ltd. and foretold a drop in technology company shares two years ago, is now saying “I told you so.” In his annual letter to shareholders, Watsa said he expects tech stocks from Twitter Inc. to Yelp Inc. to fall even further -- as much as 90 percent from their peak in the last two years. Now calling former UNICORNS = UNICORPSES

Weird story - A day after indited on violations of Sherman Act, U.S. shale pioneer Aubrey McClendon dies in suspicious auto accident.
-- Data shows he hit speeds of 89 miles an hour seconds before his Chevy Tahoe slammed into a concrete bridge earlier this month in a fatal crash, according to a report issued Monday afternoon by the Oklahoma City Police Dept. McClendon’s SUV, which was fitted to run on compressed natural gas instead of gasoline, crossed the center lane more than 60 yards before the crash. He wasn’t wearing a seat belt, the Oklahoma City Police said. Data recovered from the vehicle’s black box showed that McClendon tapped his brakes several times before the crash, but didn’t truly brake hard. His Tahoe hit the bridge at roughly 78 miles an hour.

Just as the markets turn, several big brokerages are slashing the year-end price target for S&P 500. Morgan Stanley is the latest with a price target of 2,050. Do we view this as a contrary indicator?

OOFAH - The massive rise for some energy and materials companies over the past couple of weeks has been amazing. (and the fall this week)

-- Past 30 days: Halliburton +22% , Helmrich & Payne +29%,  Chesapeake Energy +176%, Marathon Oil +49%, Linn Energy +157%,  Continental Resources +43%.... (Some relief as companies get reprieve with advancing oil prices and secondary offerings)

Politics: Trump rallies cancelled as violent protests have begun. This is going to be a nightmare... What happened today? Who will drop out?

TwitterheroTwitter and social media - how to make sense of the financial world? So many players trying to advance their own agendas...
-- Afterthefact'ers, toldyouso'ers, vague range gang, complainers, pumpanddump'ers, pompous parade, clickandsell'ers, negative nellies, positive posse...

Auto-Upgrade? As Microsoft auto-upgrades more PCs to Windows 10, some users are complaining that they weren't adequately notified. Reports of unwanted Windows 10 upgrades have been circulating for the past few days on Reddit and Twitter, etc.

New trend? After years of relying on the Amazon cloud to store its users' files, Dropbox has shifted gears and begun using primarily its own technology instead.

Japan's central bank issues statements during their two-day meeting that was a bit of a surprise. While many did not expect any further stimulus actions this meeting, there was also thoughts that there would at least be a some commentary about the potential for something in the future. Not only did they have nothing to say on that matter, there was a clear omission about the negative interest rate policy that led some to believe that they may actually be rethinking the tool. In response, the Yen climbed sharply and that created a negative bias for equities.

Yen Rises on Comments


dh_CTP** ANNOUNCING THE FIRST WINNER of the  DHUnplugged Closest to the Pin Contest **
Walt Disney (DIS)

Tesla (TSLA) and Ford (F) announced as well.


Busy couple of weeks - Central banks ! Europe went more negative on deposit rates, ramped up asset purchases and now including some corporate debt. What next?

HOOSICK FALLS, NY: More than six weeks after declaring an environmental emergency in this upstate village, Gov. Andrew M. Cuomo made his first visit here on Sunday, announcing that a new filter system had successfully cleared a toxic chemical known as PFOA from the municipal water supply.

Valeant (VRX) - Stock got crushed after earnings report. While company had a good quarter as compared to analyst estimates, the outlook was very poor - showing a sharp reduction in revenue and earnings. Plus a big write-down of the Philador unit.
-- How did smart guy like Ackman get bamboozled with this name? (Akman's Hedge fund estimates are showing a loss of $1 billion+ on today's plunge)
-- CEO Pearson is now back after months of "pneumonia"  (who has pneumonia for months?)

VRX Chart

Anyone see the video with the guy urinating into the Rice Crispies?

Not a surprise - Chipotle (CMG) posted some nasty numbers - sales down 25%+

See this week’s stock picks HERE

Follow John C. Dvorak on Twitter

Follow Andrew Horowitz on Twitter


DHUnplugged #304: An Infestation of Raccoons and Bears

The debate over the effectiveness of central bank actions is raging on. Once an investor’s best friend, confidence is waning and markets are reacting. Following the best week of 2016, equities are once again seeing weakness as oil falls on OPEC comments.meancoon

The bearish position is strengthening, but should this be a sign to start to nibble again on stocks? Is this a contrary indication or something that we should heed?

Click HERE for Show Notes and Links

Markets moved out of the correction as of Monday, only to slump again on Tuesday. Oil to blame? Iran essentially saying that they think price freeze is stupid/Saudi Arabia won't cut production. Oil got smoked on that news as well as fact that yesterday's rally was not what it seemed....

Market Update Midday 2/23

Coming into the last few days of the month - do you think that the markets will be able to turn green? Most major indices are off slightly...
- Indices are trading very technical, the 2,050 level was key resistance and that was hit with selling. Today, markets stopped on daily   support and held

Not surprised: Consumer confidence falls in latest reading. Middle income confidence fell the most since October 2008.
- Still, Fed officials are talking up more rate hikes for this year.

Listening to the news, TV, reading... Bearish commentary is everywhere.... What does that mean?

Fitbit (FIT) announced earnings. Stock down 19%on weak guidance. (Looks like same game-plan as GoPro)
- Look for these one-hit-wonders as potential rally and fade candidates in the future.

Politics - Jeb Bush is out!

Lumber Liquidators (LL) Unbelievable: The U.S. Centers for Disease Control and Prevention said earlier this month that tests on the company’s products showed minimal health risks, which renewed confidence in the chain as the stock rebounded. Now the agency has corrected those findings because of the math error (used feet instead of meters?) , saying formaldehyde exposure is three times higher than previously projected, although the risk of cancer remains low. Stock was crushed on Monday.

Home Depot (HD) out with earnings - company still looking good. Lowes (LOW) out tomorrow... Which do we prefer?

Do we want to chime in about the Apple/Feds rigmarole?

Oil plunge is starting to hit banks and energy sector companies. While stocks were suffering,  not much in the way of bankruptcy or otherwise. Now starting to see headlines about sales, div reductions, massive earnings shortfalls... (Massive build after the close tonight)

JP Morgan investor day - investment banking fees down 25% over year and sees some need to add to the reserves for bad debt related to oil related debt. Stock down 4% on the negative commentary from company


dh_CTP** ANNOUNCING THE FIRST (new and improved)  DHUnplugged Closest to the Pin Contest **
Walt Disney (DIS) ...  Listeners will be  completing against John and Andrew

Now Open for entries through March 2nd (Final Price Date: March 11)

Some oddball Andrew stories:

Saw a raccoon in front of my house last night - called wildlife control and they gave me a sure fire way to get ride of it.

Had a very nice Uber driver. Woman driver had to take me to a boat ramp to pick up my car. She had no idea where she was and told me: " I got to tell you, you are taking me to places that no one has ever taken me before... "   NICE!

Quick update - bought the exercise bike from Sears (bought online then picked up for better price)

Macy's reported a better quarter - Stock up 3% and into a "hole" that could see it break to $50. So much bad news was already priced in to these big-box retail stores.

Don Matingly (Coach of Miami Marlins) enforces no-facial hair rule. What is that? What about ridiculous hair in the NFL?

Yahoo! - more layoffs and now looking to sell itself. Mayer clearly looking to get big payday before the ship goes down. (also closing divisions)

- Time Inc is looking into possible bid.

Google is closing Google Compare - what was that anyway?

China government is "telling" media only to write financial stories that play within their rules. They want to stop any negative views or there will be consequences. (Some on Twitter seemed surprised)

On China - devalue of the Yuan - how to play?  (China started to devalue again Monday... Looks like they are setting the Yuan fix lower again)

Yuan Creeping Lower

Tesla - Musk finally gets the Tesla.com url after years of fighting for it. (now redirects to www.teslamotors.com)

There has been some murmurs from big institutional investors saying that now may be the time to start buying emerging market debt again (PCY, EMB)

Time to go to the U.K. for a little vacation? The Pound is down 18% against the USD since July 2015. Hitting 1.40 for the first time since 2009 on Brexit fears. Is this possible?

UK Pound Plunge Chart

See this week’s stock picks HERE

Follow John C. Dvorak on Twitter

Follow Andrew Horowitz on Twitter


DHUnplugged #303: Waiting on China’s Left Hook

Oil soars on news that there will be a production cut, then sours after the announcement of a production freeze. Waiting on the “left-hook” devaluation from China after they pledged to keep the Yuan strong.dh_lefthookb

Draghi promises the world that more stimulus is on tap and Japan continues to believe that negative rates are the answer to their economic woes. Meanwhile, there is some chatter that the Presidential candidates are the reason that markets have been in a downward spiral. More on this and other important topics.

Click HERE for Show Notes and Links

Good is bad, Bad is good - Japan markets finished last week down 14.5% after the Yen rallies to 111/USD. GDP drops 1.4% YoY and that was enough to drop the Yen back to 114/USD and markets rally 5%.

Japan GDP Chart

U.S Markets finished lower for the week, even with the Friday surge of 2%. This week starts off on a different note as central bankers are jawboning the markets. ECB's Draghi once again stating that he may add stimulus in March and Japan's Kuroda talking up the benefits of negative deposit rates.

The 2-Speed economy - Manufacturing related continues to suffer:February Empire Manufacturing -16.6 vs -9.9 consensus; January -19.4

Meanwhile.... China is out with commentary that the RMB (YUAN) should not weaken from here. Yuan had one of its best rallies (strengthen) on record after markets re-opened from the New year holiday. Waiting for the left-hook devaluation... (Skeptical?)

Yuan Fizzle Chart

China loves the movies.... China’s retail sales over the Spring Festival holiday rose 11.2 percent from the same vacation period a year earlier, with cinemas posting sharp increases in box-office sales, the country’s Ministry of Commerce said in a statement Saturday.

** More info and an Update... Announcing the DHUnplugged Closest to the Pin Contest -
The first CTP will start in March... 
Listeners will be  completing against John and Andrew **


The ECB Council voted today to scrap the €500 note. They say that they are doing this to counter black market and nefarious uses for higher denomination bills. The reality is that taking it out of the system will effectively reduce the cash in circulation by upwards of 30%. (Will this help gold, metals and alternatives like Bitcoin?) *** Larry Summers floating the idea of scrapping the $100 bill.

Oil... Check out inventories: (note - Saudi Arabia and Russia met and implemented a FREEZE rather than production cuts)

Crude Inventory Chart

Chatter that current Pres candidates are the reason that markets are acting poorly. Now on the front cover of Barrons this week...

Barron's Cover

Here we go... Apple (AAPL) planing massive bond sale. 30-year bond may yield 2.15 percentage points more than similar-maturity Treasuries (To benefit shareholder return plan) - $10 - $12 billion

At the same time: Carl Icahn reduced his stake in Apple by 7 million shares to 45.7 million shares in latest quarterly release.

Splinters: Acting on a tip, agents of the U.S. Food and Drug Administration paid a surprise visit to a cheese factory in rural Pennsylvania on a cold November day in 2012. They found what they were looking for: evidence that Castle Cheese Inc. was doctoring its 100 percent real parmesan with cut-rate substitutes and such fillers as wood pulp and distributing it to some of the country’s biggest grocery chains.

And so it begins:  The US Marshals Service in Houston is arresting people for not paying their outstanding federal student loans. Paul Aker says he was arrested at his home last week for a $1500 federal student loan he received in 1987. He says seven deputy US Marshals showed up at his home with guns and took him to federal court where he had to sign a payment plan for the 29-year-old school loan.

Comcast outage - massive system failure on Monday. Still not sure if all fixed and how many affected.

Comcast Outage Map

**Extra - Just got the Sony 65" Bravia 4k - Android TV - NICE! (AMAZON Prime 4k and Netflix 4k movies!)

See this week’s stock picks HERE

Follow John C. Dvorak on Twitter

Follow Andrew Horowitz on Twitter


DHUnplugged #302: Take a Ride on the Titanic II?

CDS – Credit Defaults Swaps blowing out in Europe as negative deposit rates are having a terrible impact. Tech stocks blowing up as earnings and outlook are really concerning investors.titanic

Oil continues to get hammered and now below $30 per barrel – even with the rumors flying around that there will be a special/emergency meeting with OPEC/Non-OPEC countries in an effort to stabilize prices.

Japan market crumble, bond yields are dropping and all eyes are on the Fed’s next move. Listen in as we dive deep into the real news that matters most for investors.

Click HERE for Show Notes and Links

Japan reeling after the BOJ implements negative rate policy - Yen up 5% since 1/29/16 and markets tanking (Nikkei dropped 5.5% last night) -- Japan 10-year falls below 0% for first time

FACT - Negative rates are not good for markets - Central Banks are now tinkering with tools they have no idea what outcome will be. (Yen rallying again tonight - now at 114.31)

Yen Chart

The biggest concern right now may be that  China devalues the Yuan after the Chinese New year Holiday.

The global financial situation is getting worse as seen by the Contingent Default Swaps (CDS) - remember those?

CDS Spreads Chart

Interesting: Last year, the number of dividend reductions far surpassed 2008.

Dividend Reduction Trend

Goldman Sachs Abandons Five of Six 'Top Trade' Calls for 2016 - Inflation, dollar bullish call, Emerging market stocks, U.S. banks and a few others. So much for the big boy's being right...

There has been a lots of talk about a potential U.S. recession. There are lots of voices that are protesting that concept. There are some areas that are clearly in recession.

ISM Composite Chart

Oil at $30 a barrel is blowing a hole in the insurance that U.S. shale drillers bought to protect themselves against a crash. Companies including Marathon Oil Corp., Noble Energy Inc., Callon Petroleum Inc., Pioneer Natural Resources Co., Rex Energy Corp. and Bonanza Creek Energy Inc. used a strategy known as a three-way collar that doesn’t guarantee a minimum price if oil falls below a certain level, company records show. While three-ways can be cheaper than other hedges, they leave drillers exposed to sharp declines.

May be some market moving potential as Janet Yellen is giving testimony to congress over the next few days. Will the Fed dare to hike rates again anytime soon? (U.S. yields have slid since the rate hike)

What is this all about? A record 4,279 individuals renounced their U.S. citizenship or long-term residency in 2015, according to data released by the Treasury Department.

LinkedIn (LNKD) stock tumbles 50% after earnings release. Are advertisers feeling the pinch and finally giving up on some social media? (FB, TWTR follow lower after report) - We should have seen this coming - we knew Facebook had a new business service that was competition to LinkedIn.

SolarCity (SCTY) comes in way ahead of estimates, but the outlook is awful - stock down 25%   -31%  -35%  -37%

Disney (DIS) beats on both earnings and revenues...Stock slumps after hours.

** Announcing the DHUnplugged Closest to the Pin Contest - The first CTP will start in March...
Listeners will be  completing against John and Andrew *****

WHILE in attendance at the Super Bowl, Apple chief executive Tim Cook snapped a photo of the post-game festivities and shared it to his almost two million Twitter followers. BLURRY photo and followers gave him lots of crap about it.

Cook's Blurry Photo

India’s telecom regulator said Monday that service providers cannot charge discriminatory prices for Internet services, a blow to Facebook’s global effort to provide low-cost Internet to developing countries. Facebook’s “Free Basics” program provides a pared-down version of Facebook and weather and job listings to some 15 million mobile-phone users in 37 countries around the world. When it debuted in India in April, however, Free Basics immediately ran afoul of Internet activists who said it violated the principle of “net neutrality,” which holds that consumers should be able to access the entire Internet unfettered by price or speed. (LINK)

Daimler recalls 840,000 cars - potentially due to Takata Air bags ---- When will someone put an end to this company manufacturing bad airbags?

Deutsche Bank (DB)doing a massive bond repurchase program - stock up a bit on the announcement. What does this mean? (I think they are eating their own cancerous debt)

Is this a good idea? The Titanic II, an exact replica of the original is being built and will be ready to sail (or sink) in 2018. (LINK)

Sanders and Trump will New Hampshire - oh my (possible markets don't like any of the candidates?)

Results from the DHFed - WE HAVE A WINNER! - Max Humphreys guessed $4,650.00 (Within $3)

See this week’s stock picks HERE

Follow John C. Dvorak on Twitter

Follow Andrew Horowitz on Twitter