Sunday, April 11, 2021

Corporate insider trading reported last week -- still bearish

 Prior Week:

I list ONLY 
LARGE trades:
which I define as
30 percent or more
of holdings,
$5 million or more. 
Insiders receive enough
"free" shares so that
three sales for each buy
is neutral. 
Data source:
RPLA    Replay Acquisition Corp.   
Safra Edmond          Co-CEO
Purchase       new position   +$10,000,000   

WEX    Wex Inc.   
Smith Melissa D     CEO, Pres, WEX Inc.
Sale     sold  -37%    for $9,584,960

MDB    Mongodb, Inc.   
Ittycheria Dev        Pres, CEO   
Sale      -49%      $65,188,242   

SBGI    Sinclair Broadcast Group Inc   
Smith J Duncan    Secretary
Sale    -100%    $6,457,830   

PLTR    Palantir Technologies Inc.   
Karp Alexander C.   
Sale    -29%    -$59,831,011   

ULCC    Frontier Group Holdings, Inc.   
Biffle Barry
Sale        -83%    -$6,084,674   

DDOG    Datadog, Inc.   
Le-Quoc Alexis    Pres, CTO   
Sale     -75%    -$29,295,973   

SBUX    Starbucks Corp   
Johnson Kevin R      Pres, CEO   
Sale   -33%    -$18,881,509   

DDOG    Datadog, Inc.   
Pomel Olivier      CEO
Sale    -67%    -$27,412,310   

GM    General Motors Co   
Carlisle Stephen K.        EVP   
Sale    -63%    -$6,103,778   

SQ    Square, Inc.   
Dorsey Jack    Pres,    CEO, COB
Sale   -100%    -$23,012,880   

ENPH    Enphase Energy, Inc.   
Branderiz Eric      EVP, CFO    S
 Sale    -30%    -$9,706,976       

ROKU    Roku, Inc   
Wood Anthony J.    CEO, COB
Sale     -42%    -$15,013,751   

Saturday, April 10, 2021

Bread: Socialism versus Capitalism

Financial data and economic news for the week ending Aoril 9, 2021


Credit Bubble Bulletin
by Doug Noland
Friday, April 9, 2021

This is my highly edited and
much easier to read version
of the original column.
   Ye  Editor

"U.S. Producer Prices
surged a full 1.0% in March,
double the estimate. 

This pushed y-o-y
Producer Price Inflation
to 4.2%, the strongest
advance since 2011.

The ISM Non-Manufacturing
(services) Index surged
to a record high 63.7,
with all 18 industry groups
reporting they’re paying
higher prices  (up from 67%
in December).

The Prices Index jumped to 74,
the high going back to July 2008."

For the week ending
April 9, 2021:

S&P500 jumped 2.7% (up 9.9% y-t-d)

The Dow rose 2.0% (up 10.4%)

Utilities gained 1.4% (up 3.1%)

Transports advanced 1.2% (up 19.3%)

S&P 400 Midcaps increased 0.9% (up 15.8%)

The small cap Russell 2000 
 slipped 0.5% (up 13.6%)

Nasdaq100 surged 3.9% (up 7.4%)

Semiconductors rose 1.7% (up 17.9%)

Biotechs fell 2.6% (down 5.4%).

With gold bullion rising $15,
 the HUI gold stock index gained 2.4%
     (down 5.5%).

U.K.'s FTSE jumped 2.6% (up 7.0% y-t-d).

Japan's Nikkei dipped 0.3% (up 8.5% y-t-d).

German DAX increased 0.8% (up 11.0%).

China's Shanghai fell 1.0% (down 0.6%).

Ten-year Treasury bond yields 
 fell six bps to 1.66% (up 74bps).

Federal Reserve Credit last week
gained $14.9bn to $7.657 TN.

Over the past 82 weeks,
Fed Credit expanded 105%.

Freddie Mac
30-year fixed mortgage rates
fell five bps to 3.13%
   (down 20bps y-o-y).

Fifteen-year rates
declined three bps to 2.42%
    (down 35bps).

Five-year hybrid ARM rates
jumped eight bps to 2.92%
   (down 48bps).

Jumbo mortgage 30-year fixed rates
down 11 bps to 3.18%
   (down 68bps).

Commodities  Watch:
Bloomberg Commodities Index
added 0.2% (up 7.7% y-t-d).

Spot Gold rallied 0.9% to $1,744
   (down 8.2%).

Silver gained 1.0% to $25.266
   (down 4.3%).

WTI crude fell $2.13 to $59.32
   (up 22%).

Gasoline dropped 3.0%
   (up 39%),

Natural Gas sank 4.3%
   (down 1%).

Copper rallied 1.2%
   (up 15%).

Wheat surged 4.5%

Corn rose 3.1%
    (up 19%).

Bitcoin declined $540, or 0.9%,
this week to $58,334
   (up 101%).

Coronavirus Watch:

April 7 – CNBC (Berkeley Lovelace Jr.):
“The highly contagious variant first identified in the U.K. is now the most common Covid strain circulating in the U.S., the head of the Centers for Disease Control and Prevention said… ‘The variant, known as B.1.1.7, is ‘now the most common lineage circulating in the United States.’ CDC Director Dr. Rachelle Walensky said… ‘Testing remains an important strategy to rapidly identify and isolate infectious individuals, including those with variants of concern,’ Walensky said.”

April 7 – CNBC (Rich Mendez):
“Hospitals are seeing more and more younger adults in their 30s and 40s admitted with severe cases of Covid-19, Centers for Disease Control and Prevention Director Dr. Rochelle Walensky said… ‘Data suggests this is all happening as we are seeing increasing prevalence of variants, with 52 jurisdictions now reporting cases of variants of concern,’ Walensky said…”

April 6 – Reuters (Pedro Fonseca):
“Brazil’s brutal surge in COVID-19 deaths will soon surpass the worst of a record January wave in the United States, scientists forecast, with fatalities climbing for the first time above 4,000 in a day on Tuesday as the outbreak overwhelms hospitals. Brazil’s overall death toll trails only the U.S. outbreak, with nearly 337,000 killed… But with Brazil’s healthcare system at the breaking point, the country could exceed total U.S. deaths, despite having a population two-thirds that of the United States… ‘It’s a nuclear reactor that has set off a chain reaction and is out of control. It’s a biological Fukushima,’ said Miguel Nicolelis, a Brazilian doctor and professor at Duke University…”

April 6 – Reuters (Steve Scherer, David Ljunggren and Moira Warburton): 
 “Toronto will cancel all in-person learning at elementary and secondary schools…, health authorities said as Canada deals with a variant-driven third wave of the coronavirus pandemic, which has hit the younger population hard.”

April 4 – Bloomberg (Debjit Chakraborty and Dhwani Pandya):
“India added more than 100,000 coronavirus infections over the last 24-hours, a record increase that pushed its richest state to order offices to work from home and shut malls and restaurants through April.”

April 8 – Reuters (Neha Arora and Francis Mascarenhas):
“India reported another record number of new COVID-19 infections on Friday and daily deaths hit their highest in more than five months, as it battles a second wave of infections and states complain of a persistent vaccine shortage. Evoking memories of the last national lockdown when tens of thousands of people walked on foot back to their homes, hundreds of migrants in badly affected Mumbai packed into trains as bars, malls and restaurants have again been forced to down shutters.”

Market Mania Watch:

April 7 – Wall Street Journal (Alexander Osipovich and David Benoit): “Investors are borrowing huge sums of money to buy stocks. Is that a problem? The ‘everything rally’ that started in stocks last year has been boosted by investors betting money they have borrowed. That includes both small players like the day traders on Robinhood Markets Inc. and heavyweights like Archegos Capital Management… As of late February, investors had borrowed a record $814 billion against their portfolios, according to data from the Financial Industry Regulatory Authority, Wall Street’s self-regulatory arm. That was up 49% from one year earlier, the fastest annual increase since 2007, during the frothy period before the 2008 financial crisis.”

April 7 – Bloomberg (Paula Seligson):
“Money managers are once again piling into U.S. junk bonds with abandon, pushing risk premiums so low that some fear any stumble in the economic recovery could lead to bruising losses. The extra yield investors demand to own speculative-grade bonds instead of Treasuries fell below 3 percentage points this week for the first time since 2007… Yields are close to all time lows as well, fueling a surge in borrowing as companies look to lock in historic rates. The first quarter was the busiest ever for high-yield debt sales, while volumes for bonds and loans backing leveraged buyouts are on the upswing.”

April 5 – Reuters (Gertrude Chavez-Dreyfuss):
“The cryptocurrency market capitalization hit an all-time peak of $2 trillion on Monday, according to… CoinGecko and Blockfolio, as gains over the last several months attracted demand from both institutional and retail investors.”

Inflation Watch:

April 6 – Bloomberg (Michael Sasso and Leslie Patton):
“ ... Restaurants and hotels are raising wages, offering bonuses for worker referrals or luring people from other states to cope with the shortage…. Nonfarm payrolls rose by 916,000 last month, blowing away economists’ median estimate of a 660,000-job gain. Meanwhile, a measure of service-industry activity released this week saw the fastest growth on record in March…”

April 7 – Bloomberg (Isis Almeida, Rachel Graham and Annie Lee):
“ ... Rising demand for everything from soybeans to steel has sent the cost of hauling dry goods soaring more than 50% this year. Manufacturing… is now accelerating elsewhere, and countries are stepping up commodity purchases to rebuild stockpiles after running them down during lockdowns that slowed port operations and hit economic activity globally. Analysts say the rally isn’t over, with rates to carry unpacked commodities like grains, iron ore and coal -- known as dry bulk -- expected to remain high this year and possibly into 2022.”

April 8 – Bloomberg (Agnieszka de Sousa and Megan Durisin):
“ ... a United Nations gauge of global food costs rose for a 10th month in March to the highest since 2014… Food prices are in the longest rally in more than a decade amid China’s crop-buying spree and tightening supplies of many staple products, threatening faster inflation.”

Biden Administration Watch:

April 5 – Financial Times (Aziza Kasumov):
“ ... Goldman Sachs calculated that Biden’s tax plan would knock 9% off earnings per share for companies in the S&P 500 next year. Under Biden’s plans… the US corporate tax rate would rise from 21% to 28%, a sharp reversal from the cuts rolled out during Donald Trump’s presidency. The proposal would also add a global minimum tax of 21%, determined on a country-by-country basis, to target tax havens.”

April 7 – Reuters (David Lawder):
“U.S. Treasury Secretary Janet Yellen… fleshed out the details of a corporate tax hike plan linked to President Joe Biden’s infrastructure investment proposal, aiming to raise $2.5 trillion in new revenues over 15 years by deterring tax avoidance. Yellen’s plan relies on negotiating a 21% global minimum corporate tax rate with major economies and a separate 15% minimum tax on ‘booked’ income aimed at the largest U.S. corporations. Dozens of big U.S. companies use complex tax strategies to reduce their federal tax liabilities to zero. Yellen said that promises of increased U.S. investment by corporations under the 2017 Republican tax cuts failed to materialize.”

U.S. Bubble Watch:

April 7 – Bloomberg (Olivia Rockeman):
“The U.S. trade deficit widened in February to a record high… The gap in trade of both goods and services increased to $71.1 billion in February from a revised $67.8 billion a month earlier… A decline in exports exceeded a drop in the value of imports during the month as severe winter weather disrupted two-way trade. The U.S. deficit has been widening fairly consistently on a monthly basis since reaching a more than three-year low in February 2020.”

April 6 – Reuters (Hilary Russ):
“Taco Bell wants to hire at least 5,000 employees in one day, it said…, and is adding benefits for some general managers to sweeten the pot as restaurants struggle to hire enough workers to keep up with a surge in sales amid a broader U.S. economic recovery… ‘It is no secret that the labor market is tight’ now, Kelly McCulloch, Taco Bell’s chief people officer, said… ‘Total nightmare’ is the way FAT Brands Inc CEO Andy Wiederhorn describes the staffing situation for franchisees of his company’s restaurants, which include Johnny Rockets and Fatburger.”

April 5 – Wall Street Journal (AnnaMaria Andriotis and Ben Eisen):
“A greater share of people with low credit scores has been falling behind on their car payments in recent months… Some 10.9% of subprime borrowers with outstanding auto loans or leases were more than 60 days past due in February, up from 10.7% in January and 8.7% a year prior, according to… TransUnion. It marked the sixth consecutive month-over-month increase and the highest level in monthly data going back to January 2019. More than 9% of subprime auto borrowers were more than 60 days past due in the fourth quarter, the highest quarterly figure in data going back to 2005.”

Fixed Income Watch:

April 5 – Bloomberg (Lisa Lee):
“Wall Street buyout barons are rushing to the leveraged loan market to finance takeovers and dividends as they dial up risk-taking amid a brightening economic outlook. Loan launches that back mergers and leveraged buyouts spiked to $70 billion in the first quarter of 2021, the most since 2018 and a 60% jump from a year ago. Those that have a dividend component surged to $13.4 billion, the most since 2014…”

April 9 – Wall Street Journal (Matt Wirz):
“No earnings? No problem. Investors are funneling money to unprofitable software companies through a new type of debt deal. Nonbank lenders like Golub Capital, AllianceBernstein Holdings LP and Owl Rock Capital Partners LP have issued asset-backed bonds to help finance about $2 billion of loans to such companies since November… Many of the loans are to fast-growing, but still unprofitable, software enterprises. The rash of recent deals is the latest indicator that large investors have resumed their hunt for high-yielding debt to offset low interest rates in safer government and corporate bonds. It also highlights the growing reach of private debt funds, which have replaced banks in many deals and weathered Covid-19 despite fears that they would suffer from a spike in loan defaults.”

China Watch:

April 6 – Bloomberg: 
 “China’s central bank asked the nation’s major lenders to curtail loan growth for the rest of this year after a surge in the first two months stoked bubble risks, according to people familiar with the matter. At a meeting with the People’s Bank of China on March 22, banks were told to keep new advances in 2021 at roughly the same level as last year… Some foreign banks were also urged to rein in additional lending through so-called window guidance recently after ramping up their balance sheets in 2020…”

Global Bubble Watch:

April 7 – Bloomberg (Alessandra Migliaccio, Yoshiaki Nohara and William Horobin):
“The drive to overhaul global taxes for companies gathered more steam… after Group of 20 finance chiefs, encouraged by new U.S. proposals, pledged to reach a consensus on new rules by mid-year. The finance ministers and central bank governors said they’re committed to ‘reaching a global and consensus-based solution’ on a minimum global corporate rates and how to levy the profits of multinational technology giants. An agreement could have significant ramifications for the world, bolstering incomes for many governments as they try to rebuild their economies after the pandemic. Others may balk though, as Ireland signaled.”

April 6 – Bloomberg (Ari Altstedter):
“Toronto home values continued to swell in March, bringing annual average price gains to more than 20% and adding fuel to a raging debate about whether policy makers should try to cool the market. New listings were up 57% from March 2020, when the onset of the pandemic temporarily caused a freeze in… activity. But the new supply was not able to keep up with demand spurred by low borrowing costs and demand for bigger homes, especially in the suburbs…”

Japan Watch:
April 6 – Bloomberg (Isabel Reynolds): 
 “China urged Japan to steer clear of ‘internal issues’ including Hong Kong and Xinjiang as Japanese Prime Minister Yoshihide Suga prepares to meet U.S. President Joe Biden later this month. Chinese Foreign Minister Wang Yi told his counterpart Toshimitsu Motegi that he hoped Japan could treat China’s development from an ‘objective and rational’ perspective, rather than be led by the rhythm of countries that are biased against China…”

Social, Political, Watch:

April 6 – Reuters (Sheila Dang):
“Forbes' annual world’s billionaires list includes a record-breaking 2,755 billionaires, with Inc founder Jeff Bezos topping it for the fourth consecutive year… The ranks of the ultra-wealthy are expanding after a year in which the coronavirus pandemic upended world economies and threatened the livelihoods of people across the globe. This year's billionaires are worth a combined $13.1 trillion, up from $8 trillion last year, Forbes said. ‘The very, very rich got very, very richer,’ said Forbes' Chief Content Officer Randall Lane…”

Geopolitical Watch:

April 7 – Associated Press (Robert Burns):
“The American military is warning that China is probably accelerating its timetable for capturing control of Taiwan, the island democracy that has been the chief source of tension between Washington and Beijing for decades and is widely seen as the most likely trigger for a potentially catastrophic U.S.-China war. The worry about Taiwan comes as China wields new strength from years of military buildup. It has become more aggressive with Taiwan and more assertive in sovereignty disputes in the South China Sea. Beijing also has become more confrontational with Washington; senior Chinese officials traded sharp and unusually public barbs with Secretary of State Antony Blinken in talks in Alaska last month.”

April 6 – Bloomberg (Henry Meyer, Daryna Krasnolutska and Kateryna Choursina):
“Russia announced the start of mass military drills, ratcheting up tensions with neighboring Ukraine amid Western concerns about the risk of renewed fighting. More than 4,000 training exercises will be held in military districts across Russia in April, Defense Minister Sergei Shoigu said…”

April 6 – Reuters (Gertrude Chavez-Dreyfuss):
“President Volodymyr Zelenskiy called on NATO… to lay out a path for Ukraine to join the Western military alliance, after days in which Russia has massed troops near the conflict-hit Donbass region. Zelenskiy’s comments drew an immediate rebuke from Moscow, which said Kyiv’s approach to NATO could further inflame the situation in Donbass, where violence has increased in recent days.”

Thursday, April 8, 2021

AAII Sentiment remains Neutral (barely) -- 74% cash is recommended for traders

 Data Source:
This is a short term
contrary opinion
market timing indicator:
-- It is bullish
when AAII individual
investors are bearish,
and vice versa.
This indicator 
had recommended  
between 0% and 8% cash,
from March 18, 2020, 
until October 28, 2020

The Week Ending on April 7, 2021:
73.6% of AAII Investors were bullish
(was 66.4%
last week)

Four  Week  Moving  Average: 
69.7% of AAII Investors were bullish
was 68.2%
= NEUTRAL last week)

Recommended Portfolio Cash
percentage for short term traders: 
 = 74%
(was 71% cash last week)

For the WEEK
ending 4/7/21: 
56.9% were Bullish 
   (was 45.8% last week)
22.7% were Neutral 
    (was 31.0%)
20.4% were Bearish 
    (was 23/2%)

AAII  Indicator Analysis:
    ( over 80% is Bearish )
( 71% to 80% is Moderately Bearish )
( 50% to 70% is Neutral )
( 40% to 49% is Moderately Bullish )
  ( under 40% is Bullish )
This short term
indicator recommends
from 0% to 100% cash
in a stock portfolio,
based on an online survey
of individual investors.
The four-week
moving average,
has much less
volatility than
weekly data.
Active traders
may prefer
the weekly data.

Wednesday, April 7, 2021

"Nine Crazy Examples of Unrelated Waste and Partisan Spending in Biden’s $2 Trillion ‘Infrastructure’ Proposal"


... "A glance at the proposal reveals many items that appear only tenuously related to infrastructure.

... Here are nine of the most suspect items in Biden’s “infrastructure” proposal, taken directly from a fact-sheet on the plan the White House released.

1. $10 Billion to Create a ‘Civilian Climate Corp’

...  The White House claims that “This $10 billion investment will put a new, diverse generation of Americans to work conserving our public lands and waters, bolstering community resilience, and advancing environmental justice through a new Civilian Climate Corps.”

2. $20 Billion to ‘Advance Racial Equity and Environmental Justice’

... more than the latest COVID package spent on vaccines—for “a new program that will reconnect neighborhoods cut off by historic investments and ensure new projects increase opportunity, advance racial equity and environmental justice, and promote affordable access.”

3. $175 Billion in Subsidies for Electric Vehicles

... A technological novelty so good it won’t catch on without hundreds of billions in subsidies. ...

The spending will take the form of manufacturing subsidies and consumer tax credits, which historically have benefitted wealthy families most.

... the proposal carves out more for green energy goodies than it does on the total $115 billion to “modernize the bridges, highways, roads, and main streets that are in most critical need of repair.”

4. $213 Billion to Build/Retrofit 2 Million Houses & Buildings

... Apparently, the president considers it “infrastructure spending” to allocate $213 billion to build or retrofit 2 million “sustainable” houses and buildings.

They also slip in $40 billion for public housing, stating this will “disproportionately benefit women, people of color, and people with disabilities.”

5. $100 Billion for New Public Schools and Making School Lunches ‘Greener’

... the last “COVID” legislation had $128.5 billion in taxpayer dole-outs for public schools;

much of the money will be spent years after the pandemic and there was no requirement that schools actually open.

... The Biden “infrastructure” plan includes another “$100 billion to upgrade and build new public schools.”

“Funds also will be provided to improve our school kitchens, so they can be used to better prepare nutritious meals for our students and go green by reducing or eliminating the use of paper plates and other disposable materials,” the proposal reads.

6. $12 Billion for Community Colleges

...  the Biden “infrastructure” plan slips in $12 billion for states to spend on community colleges.

7. Billions to Eliminate ‘Racial and Gender Inequities’ in STEM

... several billion dollars allocated to reduce supposed “racial and gender inequities” in Science, Technology, Engineering, and Math (STEM) research and development.

8. $100 Billion to Expand Broadband Internet (And Government Control of It)

... $100 billion to “bring affordable, reliable, high-speed broadband to every American.”

Interestingly, the proposal openly states that it wishes to promote government and NGO control of broadband and push out private sector providers:

It “prioritizes support for broadband networks owned, operated by, or affiliated with local governments, non-profits, and co-operatives—providers with less pressure to turn profits.”

9. $25 Billion for Government Childcare Programs

... $25 billion “to help upgrade child care facilities and increase the supply of child care in areas that need it most.”

According to the White House, “funding would be provided through a Child Care Growth and Innovation Fund for states to build a supply of infant and toddler care in high-need areas.”

... The above list totals hundreds of billions in waste and unrelated partisan spending slipped into the Biden administration’s expensive “infrastructure” plan.

But it should be stressed that this list is far from exhaustive; it’s what one reporter was able to find in a few hours of research.

By the time this proposal is translated into hundreds of pages of legislation (if not thousands) and subjected to Congress’s (and lobbyists’) influence, there will no doubt be even more waste and partisan policies slipped into it.

... of this plan’s more than $2 trillion in proposed spending, just $621 billion goes to “transportation infrastructure and resilience.”

... roughly one-third of the money goes to the kinds of spending people would usually associate with infrastructure, like repairing roads and bridges and modernizing public transit.

... remember that only 10 percent of the Biden administration’s $1.9 trillion in "COVID relief" spending was actually directly related to COVID-19, with much of it going to waste, politician pet projects, and partisan priorities. The president appears to have taken a similar approach to infrastructure spending.

... As the American journalist and satirist PJ O’Rourke once said, “Giving money and power to government is like giving whiskey and car keys to teenage boys.” "

Energy Poverty -- probably the most important energy article you will ever read

All time record high stock valuations -- Here are sereral metrics