I got fired by President Trump?
Equities start the day low…wait…what’s that? I got fired by President Trump? Come on, why would he fire some insignificant blogger who lives in the coldest city in the United States. I mean yea, sure, I miss a VWAP every now and then but there’s no better block trader than me, he must value that? Oh it was COMEY and not me? Thank God, I have some kind of Baird event tonight and was hoping to impress everyone with my brand new JCP shoes, whew that’s a relief. Other than “it was slow today because people love Vanguard” you can pretty much assume you’ll hear the phrase “strange thing happened in the Trump administration” a lot over the next few years. If you are making any broad based investment decisions based on tweets or personnel changes in Washington DC I’d suggest you take up gardening or macrame instead. Earnings are winding down and they were good, don’t let anyone tell you otherwise. Top line growth of nearly 9% and bottom line growth of 15%. It’s about darn time too, we need the denominator to start carrying its weight around here. I mean we can’t always rely on the numerator, the numerator eventually gets tired of its downstairs neighbor slacking off and decides to jumps out the window to show him who’s boss. Ok, let’s move onto the next paragraph where I regale you with tales from Disney and why video gaming might be a very lucrative career for your child. Investment Banking or Video Game programmer? Tough choice to be honest. One is full of boring spreadsheets, pitch decks, DCF analysis, soul crushing hours, and people taking credit for you work while you shower at a gas station and head back to the office. The other has Mario. (nuttin but love for my junior banker posse. Hollaaa at me while you drink your 15th red bull)
After the open we spent a little time below unchanged and a ton of time sitting on unchanged. So yea, exactly the same price action we’ve seen for weeks now. The only economic data point was Import Price Index but if I were to waste any time on that you’d tell me to remove you from the recap. Disney fell 2.5% after earnings and if I had to give you one guess why I’m pretty sure you’d come up with it. ESPN! Yay! That’s a fresh reason to sell the world’s premiere media conglomerate right? I can’t wait for the next 15 quarterly reports so someone else can say “wow, ESPN is really shrinking.” Iger is a hall of fame CEO, I guarantee his team is working on an OTT version of ESPN and when that happens we’ll never have to deal with the bundle ever again. EA ripped 13% after earnings. Video Games…so hot right now. In fact anything remotely “gamey” had a great day (NVDA, ATVI, AMZN, TTWO, AMD). Why? Because the amount of money spent by gamers on gaming type things is..…well…absurd. They’ll spend $50 on a game then they’ll spend countless more buying “horse armor” and “swords of soul stealing” that probably have 1000% margins on them. “DLC”…you’ve probably never heard of it but game companies sure have. Other winners were primarily energy related because oil had its first up day in about a year. Losers were PCLN, NWSA, PWR, VIAB, AGN, FOSL, and anyone trying to avoid political commentary. FOSL…when’s the last time you saw a FOSL watch? For me it was when I was shopping in Chess King for another bottle of Drakkar Noir ( I just alienated my entire millennial readership).
The back 9 saw a new high…by 0.25 pts. Comical. I don’t know, individual stocks seem to be moving but in aggregate we are going nowhere fast. What exactly is the next catalyst? I woulda said “tax reform” but what are the odds that happens anytime soon? 0 or 0? I’ll go with 0. Maybe the kick comes from abroad? Further strength in Europe and Asia? It’s their turn to lead this goat rodeo, the US has been outperforming the globe for years (see my news highlights) so maybe we give them a chance. Anyway, today’s lesson is that being a nerd might actually be a better path to wealth than being an athlete. If your son or daughter say to you “I wanna be a Youtuber or a Video Gamer” don’t dismiss it. Those two are growing way faster than the number of professional baseball or soccer players. Final Score: Dow -16bps, S&P500 +11bps, Nasdaq +14bps, Rus2k +56bps.
Volume was average. Our desk was better to buy. Buying in REITs and Retail. Selling in Media and Health Care. Shorting in Publishing. News Highlights:
- Succinct Summation of the Day’s Events: Couple of earnings reports and tons of talk about Watergate and FBI and POTUS and stuff the market doesn’t care about.
- How funny is it that I wrote about the Rock being President yesterday and then this article hits!! “One hundred percent, he would win, I have no doubt. His level of commitment and his care for people would translate immediately. If he looked me in the eyes and said, ‘I want to build a campaign. I want to run for the president of the United States,’ done, and you can lock it.” Honestly I’d vote for him
- London….tough town nowadays
- Great chart in this Marketwatch article. This is the reason so many people are bulled up abroad.
- How to survive insanely long flights. I swear I ALWAYS do this when I fly ORD – ZUR on Swiss. Works like magic: Reconsider the back row: Seeing seat 84A on your boarding pass isn’t as bad as it seems. According to Schlappig, you’re most likely to get an empty seat next to you by “picking a seat towards the very back of the cabin, in a row with at least three seats.”
- Anyone have these or know someone who’s tried them? I’d love to get a review
- There are a couple of things that would turn me bearish 1) massive wage growth and 2) a meaningful turn in weekly claims. @conosen talks about #1: “a peak in corporate profits brought about by full employment represents the beginning of the end of a business cycle. Starting from full employment, the longer a business cycle continues the more it's workers, rather than companies, who benefit from economic growth. Accelerating wage growth leads to higher inflation, putting pressure on the Federal Reserve to increase interest rates faster. Tightening credit conditions eventually slow down economic activity”.
- Fantastic question from the NYT. If you absolutely had to get rid of the following 5, what order would you remove them in? For me it would be: FB then MSFT then GOOGL then AMZN then AAPL. I could never give up my iphone. NEVER YOU HEAR ME.
- Hey man…..nice shot
- Nope, will never stand there.
- These were the inspiration for those floating things in Avatar. Speaking of Avatar, have you ever met anyone who genuinely raves about the movie? Can’t say I ever have. How is it the #1 top grossing movie of all time?
- You know what, I support this wholeheartedly. It’s important for millennials to feel random disappointment from time to time. Life sucks
- $SNAP missed their 1st quarter. Down 18% after hrs as of 4:05pm ET
We’ll end tonight with a simple .gif file. Ladies and Gentleman the future winner of the Darwin Award right here: