Journal Thur Nov 18


Trades

  • Going to load up on Snapchat. Capitulation on Baltic Dry index combined with monster guidance out of Macys makes me sympathetic to supply chain issues highlighted on their quarter being fixed
  • Capitulation move in Turkish equities makes me favor a long Japan position hedged with EM debt. The risk premium should be compelling.
  • Taking down some of the oil risk with a GBPCAD short as European problems/ destabilization / weak hand in brexit negotiatinos make that appealing

General Summary

  • Numbers out of Baba and Baidu make it look like China is actually going into a recession.

Substantial overnight moves

  • Macy’s and Kohl’s aggressive pre market – nearly 8-10%. Huge guide up, gross margin beat
  • Christ
  • Nvidia huge run pre market, 8.3%. ASML shrugging off European headlines +2%, AMD +2.6%
  • Chinternet implosion – looks like China is slowing down economically with even Bidu missing on ad revenue. Yikes. Somewhat notable JD looks to be share gainer from Baba

Today lots of fed speeches

7:30 Fed’s Bostic Speech 8:30 Initial Jobless Claims 8:30 Philly Fed Business Outlook 9:30 Fed’s William Speech 10:00 E-Commerce Retail Sales 10:00 Leading Indicators 10:30 EIA Natural Gas Inventory 11:00 Kansas City Fed Mfg Survey 2:00 PM Fed’s Evans Speech 3:30 PM Fed’s Daly Speech 4:30 PM Fed Balance Sheet Think need to read all of these given rates volatility

Overnight News

  • Holy fck Macy’s The company is narrowing and raising FY2021 outlook and now expects net sales of $24.12B-$24.28B vs. consensus of $23.88B and prior guidance of $23.55B-$23.95B; Adjusted diluted EPS of $4.57-$4.76 vs. consensus of $3.91 and prior outlook of $3.41-$3.75.
  • Initial jobless claims decently higher than expectations. Philly manufacturing index offsets, aggressively high
  • American consumers are showing little sign of returning yet to their normal balance of spending on services over goods, with a heavy reliance on imported products, according to two indicators based on shipping data. Flexport’s Post-Covid Indicator shows a reading of 123 for December, up from 122 in November and the 11th straight month above 100 — the baseline set in mid-2020 to show how consumer spending patterns shifted after the initial coronavirus outbreaks and lockdowns. -The risk of a trade war between the European Union and the U.K. may be receding, with the bloc suggesting its forceful negotiating stance led to a softening in London’s position.
  • Surging European inflation will be transitory and there’s limited risk of contagion from the even higher rates seen in the U.S., French Finance Minister Bruno Le Maire said.
  • The current squeeze on low-income households “is a very serious issue,” said Holger Schmieding, chief economist at Berenberg. While taming inflation is typically up to central banks, he said “this isn’t a matter for the ECB to do anything about at the moment – it’s a matter for governments to offer relief.”
  • Snapchat next week will launch an augmented-reality powered Snap Holiday Market to coincide with Black Friday. The market will feature immersive virtual stores, where users will be able to browse products and deals from six retailers including Coca-Cola, Hollister, Under Armour, Amazon Prime Video, Verizon and Walmart. Other brands such as American Eagle, Fendi and Kaja Beauty are also launching virtual try-on experiences through augmented reality technology, according to Snap Inc.
  • The Baltic Dry index has dropped another 6.2% - this is very extreme, now down more than 50% off its highs
  • Bill Gates now echoing Benioff’s “Virus Cancelled” narrative for mid 2022
  • New Economy forum shilling US/ China peace (Hank Pauslon)
  • Tony blair went a bit harder “On Taiwan, “it’s important that we understand what China’s position is in relation to Taiwan, how deep this ‘One China’ policy is,” Blair said. “They have to understand that Taiwan is not the same as Hong Kong. And there are very strong views on this in the West.”
  • Food prices will likely stay elevated in 2022 as disruptions to the global supply chain persist, according to Cargill Inc. CEO David MacLennan said, citing labor shortages. “I thought inflation in ags and food was transitory. I feel less so now because of continued shortages in labor markets,” MacLennan said in an interview at the forum. “That’s one of the inputs to the supply chain that we’re watching most carefully.”
  • China announced it was set to tap stockpiles, with the announcement sending the price of crude lower. -Biden is also focused on gasoline prices for consumers, urging the Federal Trade Commission to probe possible illegal conduct in the market saying there is “mounting evidence of anti-consumer behavior.” Some U.S. lawmakers are seizing on the high price of crude to revive legislation that would subject the OPEC cartel to antitrust laws. -JPMorgan Chase & Co. became the latest big bank to jettison their call that the central bank would remain on hold through 2022, with economists there now predicting a hike in September of next year -Alibaba posted a less-than-expected 29% rise in revenue for the September quarter to 200.7 billion yuan ($31.4 billion). It forecast 20% to 23% growth in fiscal 2022 revenue, short of the 27% that analysts were projecting. Net income plummeted 81% to 5.4 billion yuan, lagging estimates after the internet giant marked down the value of equity investments. Pinduoduo this year surpassed Alibaba as the largest Chinese e-commerce platform by annual active shoppers, reaching 849.9 million users in the 12 months to June. Meanwhile, JD.com has been attracting new and returning brands like Starbucks and Estee Lauder to its platforms, taking advantage of Beijing’s edict to end exclusivity arrangements previously imposed upon merchants. -“The commission will consider approving support to fill possible funding gaps in the semiconductor ecosystem, in particular for European first-of-a-kind facilities” that can cover chips and other processes in producing them, she added. “We cannot rely on one country or one company.”
  • Baidu Inc. reported a 13% jump in sales after growth in newer businesses such as the cloud helped offset a slowdown in its main internet advertising division. Unlike Tencent Holdings Ltd. and Alibaba Group Holding Ltd., Baidu isn’t a major target of China’s big tech crackdown, which is centered on rooting out market monopolies. Stock tanking pre market