Economy:
The government reported that the economy added 103,000 jobs in March. The consensus estimate was for 170K. The numbers for January and February were revised down by a combined 50K. Average hourly earnings increased by $.08 per hour. The wage growth number for 12 months increased to 2.7% from 2.6%. Employment Situation Summary
The tax cuts became effective on 1/1/18.
The ISM March Non-Manufacturing PMI decreased to 58.8 from 59.5 in February. The new orders component fell to 59.5 from 64.8. This is a strong report. The decline is currently nothing to be worried about.
The government reported that the economy added 103,000 jobs in March. The consensus estimate was for 170K. The numbers for January and February were revised down by a combined 50K. Average hourly earnings increased by $.08 per hour. The wage growth number for 12 months increased to 2.7% from 2.6%. Employment Situation Summary
The tax cuts became effective on 1/1/18.
The ISM March Non-Manufacturing PMI decreased to 58.8 from 59.5 in February. The new orders component fell to 59.5 from 64.8. This is a strong report. The decline is currently nothing to be worried about.
+++++++++
Markets and Market Commentary:
Powell says Fed to continue with ‘patient’ path in lifting interest rates-MarketWatch
Powell's remarks probably contributed some to Friday's decline.
Closing Prices Friday 4/6/18:
S & P 500: 2,604.47 -58.37 -2.19%
IEF $102.92 +$0.45 +0.44%: iShares 7-10 Year Treasury Bond ETF
LQD $117.07 +$0.35 +0.30%: iShares Investment Grade Corporate Bond ETF
VIX 21.49 +2.55 +13.46%
GLD $126.40 +0.60 +0.48%: SPDR Gold Trust
FXF $98.10 +0.52 +0.53% : Guggenheim CurrencyShares Swiss
The preceding price movements fit together. My largest taxable account, which is bond heavy, was up $72 last Friday.
So far in 2018, bonds have not been a hedge for stock market declines. The 10 year treasury has risen 10 basis points in yield since the S&P 500 hit its peak closing price on 1/26/18 which was 2,872.87. LQD closed at $117.07 last Friday and at $119.54 on 1/26/18.
Total Returns Year to Date Through 4/6/18:
iShares 7-10 Year Treasury Bond ETF (IEF) Total Return = -2.03%
iShares 20+ Year Treasury Bond ETF (TLT) Total Return = -3.904%
iShare Investment Grade Corporate Bond ETF (LQD) = -2.88%
iShares TIPS Bond ETF (TIP) Total Return = -.79%
iShares National Muni Bond ETF (MUB) Total Return = -1.42%
PowerShares Taxable Municipal Bonds (BAB) Total Return = -1.23%
iShares 1-3 Year Treasury Bond ETF (SHY) Total Return = -.11%
SPDR® S&P 500 ETF (SPY) Total Return = -2.29%
Last Friday, the S & P 500 index did manage to stay above its 200 day SMA line which was at 2,593+: Chart
The main culprit for the stock market's decline was Trump who threatened China with $100B in tariffs in the event China imposes $50B in response to the proposed additional $50B in additional U.S. tariffs on China's exports to the U.S. Trump asks for $100 billion in additional tariffs on Chinese products: CNBC.
China's 2017 imports from the U.S. were valued at about $130.37B. Foreign Trade-U.S. Trade with China
Sounds like a kindergarten fight provoked by an incorrigible brat whose maturity progress was arrested at five.
Some pundits say that Donald is just negotiating, adding that he is a master at negotiations as proven by his six bankruptcies; his ability to cause others to suffer losses from his mistakes; the uncanny ability to receive huge benefits from NYC politicians; and his persistent and long standing abuse of the legal system to brow beat suppliers and workers into submission. (e.g. USA TODAY exclusive: Hundreds allege Donald Trump doesn’t pay his bills)
Another spark for the decline was the following statement made by Trump on Friday that seemed to indicate he was serious about imposing more tariffs on China:
"Now we could—the easiest thing for me to do would be just to close my eyes and forget it. If I did that, then I'm not doing my job. I'm not saying there won't be a little pain but the market's gone up 40 percent, 42 percent—so we might lose a little bit of it—but we're going to have a much stronger country when we're finished. And that's what I'm all about. We have to do things that other people wouldn't do."
When Trump mentioned that the market had gone up 40% or 42%, the actual number was 16.31% since Trump's inauguration and 24.5% since the election. Those calculations were made by Wilshire Associates before last Friday's decline.
It is possible that Donald's plan, whatever it may be at the moment, may eventually work with China to some meaningful degree.
I would caution, however, that China may view Donald as an unreliable and untrustworthy bully, which happens to be true. Consequently, giving Donald what China views as major concessions will only make him want more or what I call the "Munich Trap". Munich Agreement - Wikipedia
Even if China agrees to make major trade concessions, I doubt that the path to that resolution will be marked by a "little pain".
I suspect that the S & P 500 will be significantly below where it was on election day if: (1) the U.S. does another $50B on China's exports to the U.S.; (2) China responds with $50B on U.S. exports, (3) Trump levies another $100B on China's exports to the U.S. and (4) China slaps tariffs on the remaining U.S. exports to China which would be less than $100B. At the moment, I do not view all of those events as likely, though the odds of another round of tit for tat tariffs in the $50B range is more probable than not.
China's tariffs would hit American farmers hard. If that happens, it will be Trump's payback for their overwhelming support in the last election. China’s tariffs test the political patience of farm country - POLITICO
Trump ordered the Secretary of Agriculture, Sonny Perdue, to do something unspecified to protect farmers impacted by China's proposed tariff.
Maybe Sonny can have the federal government pay China's 25% tariff on U.S. soybean exports and then borrow the funds for those payments from China. Just a suggestion. Perhaps my suggestion needs some PR work which is a category where republican politicians excel (e.g. Death Panels, Death Tax; Better healthcare at Cheaper Prices).
Rather than the federal government paying the tariff directly, which may be a bridge too far, the government could "subsidize" the soybean farmers by 25% and then borrow the money to pay for the subsidy from China.
Trump says everything is going to work out great:
Trump predicts trade concessions from China despite rising tensions: Reuters
Within 60 to 90 days from now, soothing words and rosy predictions will need to be either confirmed or rejected by actual events. Millions of investors are Trump supporters and will turn Trump's B.S. into reality before the B.S. has had time to dry.
Trump Vows China ‘Will Take Down Its Trade Barriers’ - Bloomberg
Kudlow says China has not wanted to 'talk in earnest' amid tariff threats - CNN
++
Why stocks could fall nearly 40% over the coming 18 months - MarketWatch
Powell says Fed to continue with ‘patient’ path in lifting interest rates-MarketWatch
Powell's remarks probably contributed some to Friday's decline.
Closing Prices Friday 4/6/18:
S & P 500: 2,604.47 -58.37 -2.19%
IEF $102.92 +$0.45 +0.44%: iShares 7-10 Year Treasury Bond ETF
LQD $117.07 +$0.35 +0.30%: iShares Investment Grade Corporate Bond ETF
VIX 21.49 +2.55 +13.46%
GLD $126.40 +0.60 +0.48%: SPDR Gold Trust
FXF $98.10 +0.52 +0.53% : Guggenheim CurrencyShares Swiss
The preceding price movements fit together. My largest taxable account, which is bond heavy, was up $72 last Friday.
So far in 2018, bonds have not been a hedge for stock market declines. The 10 year treasury has risen 10 basis points in yield since the S&P 500 hit its peak closing price on 1/26/18 which was 2,872.87. LQD closed at $117.07 last Friday and at $119.54 on 1/26/18.
Total Returns Year to Date Through 4/6/18:
iShares 7-10 Year Treasury Bond ETF (IEF) Total Return = -2.03%
iShares 20+ Year Treasury Bond ETF (TLT) Total Return = -3.904%
iShare Investment Grade Corporate Bond ETF (LQD) = -2.88%
iShares TIPS Bond ETF (TIP) Total Return = -.79%
iShares National Muni Bond ETF (MUB) Total Return = -1.42%
PowerShares Taxable Municipal Bonds (BAB) Total Return = -1.23%
iShares 1-3 Year Treasury Bond ETF (SHY) Total Return = -.11%
SPDR® S&P 500 ETF (SPY) Total Return = -2.29%
Last Friday, the S & P 500 index did manage to stay above its 200 day SMA line which was at 2,593+: Chart
The main culprit for the stock market's decline was Trump who threatened China with $100B in tariffs in the event China imposes $50B in response to the proposed additional $50B in additional U.S. tariffs on China's exports to the U.S. Trump asks for $100 billion in additional tariffs on Chinese products: CNBC.
China's 2017 imports from the U.S. were valued at about $130.37B. Foreign Trade-U.S. Trade with China
Sounds like a kindergarten fight provoked by an incorrigible brat whose maturity progress was arrested at five.
Some pundits say that Donald is just negotiating, adding that he is a master at negotiations as proven by his six bankruptcies; his ability to cause others to suffer losses from his mistakes; the uncanny ability to receive huge benefits from NYC politicians; and his persistent and long standing abuse of the legal system to brow beat suppliers and workers into submission. (e.g. USA TODAY exclusive: Hundreds allege Donald Trump doesn’t pay his bills)
Another spark for the decline was the following statement made by Trump on Friday that seemed to indicate he was serious about imposing more tariffs on China:
"Now we could—the easiest thing for me to do would be just to close my eyes and forget it. If I did that, then I'm not doing my job. I'm not saying there won't be a little pain but the market's gone up 40 percent, 42 percent—so we might lose a little bit of it—but we're going to have a much stronger country when we're finished. And that's what I'm all about. We have to do things that other people wouldn't do."
When Trump mentioned that the market had gone up 40% or 42%, the actual number was 16.31% since Trump's inauguration and 24.5% since the election. Those calculations were made by Wilshire Associates before last Friday's decline.
It is possible that Donald's plan, whatever it may be at the moment, may eventually work with China to some meaningful degree.
I would caution, however, that China may view Donald as an unreliable and untrustworthy bully, which happens to be true. Consequently, giving Donald what China views as major concessions will only make him want more or what I call the "Munich Trap". Munich Agreement - Wikipedia
Even if China agrees to make major trade concessions, I doubt that the path to that resolution will be marked by a "little pain".
I suspect that the S & P 500 will be significantly below where it was on election day if: (1) the U.S. does another $50B on China's exports to the U.S.; (2) China responds with $50B on U.S. exports, (3) Trump levies another $100B on China's exports to the U.S. and (4) China slaps tariffs on the remaining U.S. exports to China which would be less than $100B. At the moment, I do not view all of those events as likely, though the odds of another round of tit for tat tariffs in the $50B range is more probable than not.
China's tariffs would hit American farmers hard. If that happens, it will be Trump's payback for their overwhelming support in the last election. China’s tariffs test the political patience of farm country - POLITICO
Trump ordered the Secretary of Agriculture, Sonny Perdue, to do something unspecified to protect farmers impacted by China's proposed tariff.
Maybe Sonny can have the federal government pay China's 25% tariff on U.S. soybean exports and then borrow the funds for those payments from China. Just a suggestion. Perhaps my suggestion needs some PR work which is a category where republican politicians excel (e.g. Death Panels, Death Tax; Better healthcare at Cheaper Prices).
Rather than the federal government paying the tariff directly, which may be a bridge too far, the government could "subsidize" the soybean farmers by 25% and then borrow the money to pay for the subsidy from China.
Trump says everything is going to work out great:
Within 60 to 90 days from now, soothing words and rosy predictions will need to be either confirmed or rejected by actual events. Millions of investors are Trump supporters and will turn Trump's B.S. into reality before the B.S. has had time to dry.
Trump Vows China ‘Will Take Down Its Trade Barriers’ - Bloomberg
Kudlow says China has not wanted to 'talk in earnest' amid tariff threats - CNN
++
Why stocks could fall nearly 40% over the coming 18 months - MarketWatch
Fed’s Bullard sees no reason to hike interest rates further - MarketWatch. There are a number of potential adverse economic scenarios, including a trade war and/or termination of the NAFTA trade agreement, that could cause the FED to stop raising the FF rate.
Atlanta Fed’s Bostic calls rate hikes a ‘priority’ until they’re neutral - MarketWatch
Atlanta Fed’s Bostic calls rate hikes a ‘priority’ until they’re neutral - MarketWatch
+++++++++++++
Trump:
In a soon to be published book written by 3 political scientist, titled “Remaking Partisan Politics through Authoritarian Sorting,” the authors found that "in 1992, 62 percent of white voters who ranked highest on the authoritarian scale supported George H.W. Bush. In 2016, 86 percent of the most authoritarian white voters backed Trump, an increase of 24 percentage points." According to the authors, authoritarianism has become "part and parcel of Republican identity among non-Hispanic white Americans." Republicans will reject those findings, viewing themselves as the party for individual responsibility and personal freedoms.
Opinion | The Contract With Authoritarianism - The New York Times
Madeleine Albright made the following comments about Trump in this NYT opinion article:
"At one time or another, Mr. Trump has attacked the judiciary, ridiculed the media, defended torture, condoned police brutality, urged supporters to rough up hecklers and — jokingly or not — equated mere policy disagreements with treason. He tried to undermine faith in America’s electoral process through a bogus advisory commission on voter integrity. He routinely vilifies federal law enforcement institutions. He libels immigrants and the countries from which they come. His words are so often at odds with the truth that they can appear ignorant, yet are in fact calculated to exacerbate religious, social and racial divisions. Overseas, rather than stand up to bullies, Mr. Trump appears to like bullies, and they are delighted to have him represent the American brand. If one were to draft a script chronicling fascism’s resurrection, the abdication of America’s moral leadership would make a credible first scene." Will We Stop Trump Before It’s Too Late? - The New York Times
Authoritarianism is not defined by political ideology. Authoritarian policies can be imposed by leaders who are properly classified across the political and ideological spectrum. Trump admires authoritarian leaders far more than those who lead Western democracies who he frequently derides as weak. Authoritarian leaders, like Putin or Xi Jinping, are strong and good leaders in Trump's opinion.
Donald Trump's 9 Shout-Outs to Notorious Dictators - The Atlantic; In China and beyond, Trump is embracing strongmen
It is important to keep in mine that 40% of the electorate approve of Trump's performance. Trump Job Approval (Weekly)
++
Trump claimed once again last week that millions voted illegally for Hillary. No proof of Trump's conspiracy theory that millions voted many times | PolitiFact (pants on fire rating of course). He offered no proof since he has none.
When Donald made this claim in an ABC interview soon after his inauguration, he asserted confidently and without any reservation that all of those millions of illegal votes were cast for Hillary. Donald did not receive even one:
Stocks, Bonds & Politics: Trump and Massive Voter Fraud Allegations-Cover For Voter Suppression; TRANSCRIPT: ABC News Anchor David Muir Interviews President Trump - ABC News; Stocks, Bonds & Politics: GOP's Problems With the First Amendment; Stocks, Bonds & Politics: The GOP and First Amendment Conservative Values
If Trump loses in 2020, it will need to be by landslide of epic proportions, at least as large as Reagan's thumping of Walter Mondale in the 1984 election, when Reagan carried 49 states and won 58.8% of the popular vote.
Otherwise, Trump will claim to his supporters that the election was stolen and most of them will of course believe him. None of them need any proof to reach any conclusion. After all, all evidence that contradicts their opinions is per se Fake News promulgated by the liberal mainstream media to put worms in their heads.
++
Trump wants it both ways on border crossings - CNN (noting Trump's statements that border crossings were at a 46 year low and it was critical to national security to spend several billion dollars using the National Guard to assist the 19,437 border patrol agents; 610 air interdiction agents (pilots); 337 marine interdiction agents; and 23,079 Custom and Border Patrol officers CBP March 2018.pdf)
In a soon to be published book written by 3 political scientist, titled “Remaking Partisan Politics through Authoritarian Sorting,” the authors found that "in 1992, 62 percent of white voters who ranked highest on the authoritarian scale supported George H.W. Bush. In 2016, 86 percent of the most authoritarian white voters backed Trump, an increase of 24 percentage points." According to the authors, authoritarianism has become "part and parcel of Republican identity among non-Hispanic white Americans." Republicans will reject those findings, viewing themselves as the party for individual responsibility and personal freedoms.
Opinion | The Contract With Authoritarianism - The New York Times
Madeleine Albright made the following comments about Trump in this NYT opinion article:
"At one time or another, Mr. Trump has attacked the judiciary, ridiculed the media, defended torture, condoned police brutality, urged supporters to rough up hecklers and — jokingly or not — equated mere policy disagreements with treason. He tried to undermine faith in America’s electoral process through a bogus advisory commission on voter integrity. He routinely vilifies federal law enforcement institutions. He libels immigrants and the countries from which they come. His words are so often at odds with the truth that they can appear ignorant, yet are in fact calculated to exacerbate religious, social and racial divisions. Overseas, rather than stand up to bullies, Mr. Trump appears to like bullies, and they are delighted to have him represent the American brand. If one were to draft a script chronicling fascism’s resurrection, the abdication of America’s moral leadership would make a credible first scene." Will We Stop Trump Before It’s Too Late? - The New York Times
Authoritarianism is not defined by political ideology. Authoritarian policies can be imposed by leaders who are properly classified across the political and ideological spectrum. Trump admires authoritarian leaders far more than those who lead Western democracies who he frequently derides as weak. Authoritarian leaders, like Putin or Xi Jinping, are strong and good leaders in Trump's opinion.
Donald Trump's 9 Shout-Outs to Notorious Dictators - The Atlantic; In China and beyond, Trump is embracing strongmen
It is important to keep in mine that 40% of the electorate approve of Trump's performance. Trump Job Approval (Weekly)
++
Trump claimed once again last week that millions voted illegally for Hillary. No proof of Trump's conspiracy theory that millions voted many times | PolitiFact (pants on fire rating of course). He offered no proof since he has none.
When Donald made this claim in an ABC interview soon after his inauguration, he asserted confidently and without any reservation that all of those millions of illegal votes were cast for Hillary. Donald did not receive even one:
Stocks, Bonds & Politics: Trump and Massive Voter Fraud Allegations-Cover For Voter Suppression; TRANSCRIPT: ABC News Anchor David Muir Interviews President Trump - ABC News; Stocks, Bonds & Politics: GOP's Problems With the First Amendment; Stocks, Bonds & Politics: The GOP and First Amendment Conservative Values
If Trump loses in 2020, it will need to be by landslide of epic proportions, at least as large as Reagan's thumping of Walter Mondale in the 1984 election, when Reagan carried 49 states and won 58.8% of the popular vote.
Otherwise, Trump will claim to his supporters that the election was stolen and most of them will of course believe him. None of them need any proof to reach any conclusion. After all, all evidence that contradicts their opinions is per se Fake News promulgated by the liberal mainstream media to put worms in their heads.
Trump wants it both ways on border crossings - CNN (noting Trump's statements that border crossings were at a 46 year low and it was critical to national security to spend several billion dollars using the National Guard to assist the 19,437 border patrol agents; 610 air interdiction agents (pilots); 337 marine interdiction agents; and 23,079 Custom and Border Patrol officers CBP March 2018.pdf)
Both Bush Jr. and Obama deployed National Guard troops to the Mexican border.
Bush deployed 6,000 troops for 25 months at a cost of $1.2B. Bush and Obama sent troops to the border, too-CNN; Administration to draw down National Guard troops on Southwest border - CNN
++
Bush deployed 6,000 troops for 25 months at a cost of $1.2B. Bush and Obama sent troops to the border, too-CNN; Administration to draw down National Guard troops on Southwest border - CNN
++
Roger Stone, on day he sent Assange dinner email, also said 'devastating' WikiLeaks were forthcoming - CNN ("On the August 4, 2016, InfoWars show, Stone described the soon-to-appear WikiLeaks disclosures. He also mentioned that he spoke with then-Republican nominee Donald Trump on August 3 -- the day before the interview. .. Stone wrote to former Trump adviser Sam Nunberg on August 4, 2016, that he had dinner with Assange the night before.")
++++
Trump and his EPA Administrator Scott Pruitt:
Chief of Staff Advised Trump to Fire the E.P.A. Chief - The New York Times
EPA chief Scott Pruitt spent millions on security and travel: CNBC
Pruitt’s round-the-clock security has cost taxpayers nearly $3 million - The Washington Post ("Numerous agents were deployed as he spent Christmas in Oklahoma, attended a University of Kentucky basketball game and flew with his family to California to attend the Rose Bowl football game and spend time at Disneyland."); More scrutiny for Pruitt's Morocco trip from Democrats, EPA inspector general - ABC News
I emphasized the "cost taxpayers" phrase in the prior paragraph to highlight one of my pet peeves. The media and politicians will frequently say that some new expense item is being paid by the "taxpayers", which seems weird to me when the government is already running $1+ trillion per year deficits based on existing spending levels. An example is this one published over the weekend: Trump sons' Dubai trip costs taxpayers at least $73,000 That additional expense is not paid by the taxpayers, but simply financed with more federal government borrowing.
Pruitt faces renewed questions over cost of security detail - CNN (includes a fleet of at least 19 vehicles)
The EPA spent $43,000 installing a soundproof phone booth in Pruitt's office and $9K last year for a private contractor to sweep his office for bugs. Pruitt requested a $100K per month private jet membership, a bulletproof vehicle, and $70K to be spent on office furniture including a bullet proof desk for an armed security guard stationed in Pruitt's office suite.
Any EPA official who questions Pruitt's lavish spending habits and sweetheart leasing deal with an industry lobbyist have been sidelined by Trump's anti-Environmental Protection Director of Environmental Protection. E.P.A. Officials Sidelined After Questioning Scott Pruitt - The New York Times; EPA officials demoted, removed after voicing complaints about Scott Pruitt: Report - CBS News
Scott Pruitt Is Trump’s Newest Louise Linton
Pruitt leased a luxury condo unit for $50 a night from an industry lobbyist. And, Pruitt only had to pay that $50 when he stayed in the condo overnight. Possibly the cheapest "hotel" room in Washington, D.C.., though there could conceivably be a rat infested roach motel in the worst area that could cost a few dollars less.
The unit rented by Pruitt is the brown brick one shown in a picture here: Company fined for renting condo to Scott Pruitt It is clearly a high end place to live. Pruitt's daughter, McKenna Pruitt, used another bedroom in the building for free and both Scott and McKenna used the facilities in the entire condo. EXCLUSIVE: EPA chief Pruitt joined by family in condo tied to lobbyist 'power couple' - ABC News
Pruitt claimed that his sweetheart lease deal with J. Steven Hart, Chairman of the Williams & Jenson lobbying firm who has Exxon as a client, was okay because Hart personally had no business before the EPA Scott Pruitt Says His Lobbyist Landlord’s Clients Didn’t Have Business Before the EPA. They Did.
Pruitt Had a $50-a-Day Condo Linked to Lobbyists. Their Client’s Project Got Approved.-The New York Times;
Scott Pruitt’s condo scandal and mounting ethics questions, explained - Vox
The lease scratched out Steven Hart's name and substituted his wife as the lessor:
Trump still stands by EPA Administrator Scott Pruitt- CBS News Video Report (at 1:08 in this video, the reporter claims lobbying records show Pruitt's landlord represented several businesses before the EPA during Pruitt's sweetheart lease deal)
Did Scott Pruitt falsely deny knowledge of his aides’ pay raises? It sure looks like it. - The Washington Post
When Trump interviewed Pruitt for this job, he told Pruitt to go visit Carl Icahn after the meeting. Icahn needed relief from EPA regulations and got what he wanted from Pruitt. Carl Icahn slams EPA, says Trump's pick Pruitt will 'do the job'' Carl Icahn Role Shows Common Thread In Scott Pruitt Ethics, Policy Scandals-YouTube; Trump Adviser Icahn Is a Supernova of Conflicts of Interest; Carl Icahn Scrutinized for Shaping Policy That Helped Him Profit - The New York Times Will the republicans investigate?
Pruitt lead security agent removed after telling Pruitt he couldn't use siren for non-emergencies: report | TheHill;
Scott Pruitt asked to use sirens in D.C. traffic and was told no for non-emergency - CBS News;
EPA's Scott Pruitt, Defying White House, Doled Out Huge Raises - The Atlantic; Scott Pruitt’s defenses are crumbling - The Washington Post
Republican politicians claim that Pruitt is the victim of a "liberal" witch hunt.
Maybe Paul and Cruz will go one tiny step further and claim that the Obama media cronies are responsible for Pruitt's conduct. Or even better, just blame Hillary. I wonder how Cruz would react if Obama's EPA Director had done 1/10th of what Pruitt has already done.
Donald defended Pruitt over the weekend claiming that Scott had brought the nation cleaner air and water while saving billions.
The following articles discuss how Pruitt is bringing the nation cleaner air and water: Scott Pruitt's EPA Emissions Rollback Creates Controversy | Time; How Pruitt's EPA Is Delaying, Weakening and Repealing Clean Air Rules | InsideClimate News; 3 environmental regulations Scott Pruitt has been dismantling amid his scandals - Vox; Pruitt's survival strategy: Emphasize his rollback of environmental rules - ABC News
Trump is not draining the swamp. Trump is the Swamp Creature:
Trump & Co. Are Stealing America Blind: A Timeline
++++
Trump and his EPA Administrator Scott Pruitt:
Chief of Staff Advised Trump to Fire the E.P.A. Chief - The New York Times
EPA chief Scott Pruitt spent millions on security and travel: CNBC
Pruitt’s round-the-clock security has cost taxpayers nearly $3 million - The Washington Post ("Numerous agents were deployed as he spent Christmas in Oklahoma, attended a University of Kentucky basketball game and flew with his family to California to attend the Rose Bowl football game and spend time at Disneyland."); More scrutiny for Pruitt's Morocco trip from Democrats, EPA inspector general - ABC News
I emphasized the "cost taxpayers" phrase in the prior paragraph to highlight one of my pet peeves. The media and politicians will frequently say that some new expense item is being paid by the "taxpayers", which seems weird to me when the government is already running $1+ trillion per year deficits based on existing spending levels. An example is this one published over the weekend: Trump sons' Dubai trip costs taxpayers at least $73,000 That additional expense is not paid by the taxpayers, but simply financed with more federal government borrowing.
Pruitt faces renewed questions over cost of security detail - CNN (includes a fleet of at least 19 vehicles)
The EPA spent $43,000 installing a soundproof phone booth in Pruitt's office and $9K last year for a private contractor to sweep his office for bugs. Pruitt requested a $100K per month private jet membership, a bulletproof vehicle, and $70K to be spent on office furniture including a bullet proof desk for an armed security guard stationed in Pruitt's office suite.
Any EPA official who questions Pruitt's lavish spending habits and sweetheart leasing deal with an industry lobbyist have been sidelined by Trump's anti-Environmental Protection Director of Environmental Protection. E.P.A. Officials Sidelined After Questioning Scott Pruitt - The New York Times; EPA officials demoted, removed after voicing complaints about Scott Pruitt: Report - CBS News
Scott Pruitt Is Trump’s Newest Louise Linton
Pruitt leased a luxury condo unit for $50 a night from an industry lobbyist. And, Pruitt only had to pay that $50 when he stayed in the condo overnight. Possibly the cheapest "hotel" room in Washington, D.C.., though there could conceivably be a rat infested roach motel in the worst area that could cost a few dollars less.
The unit rented by Pruitt is the brown brick one shown in a picture here: Company fined for renting condo to Scott Pruitt It is clearly a high end place to live. Pruitt's daughter, McKenna Pruitt, used another bedroom in the building for free and both Scott and McKenna used the facilities in the entire condo. EXCLUSIVE: EPA chief Pruitt joined by family in condo tied to lobbyist 'power couple' - ABC News
Pruitt claimed that his sweetheart lease deal with J. Steven Hart, Chairman of the Williams & Jenson lobbying firm who has Exxon as a client, was okay because Hart personally had no business before the EPA Scott Pruitt Says His Lobbyist Landlord’s Clients Didn’t Have Business Before the EPA. They Did.
Pruitt Had a $50-a-Day Condo Linked to Lobbyists. Their Client’s Project Got Approved.-The New York Times;
Scott Pruitt’s condo scandal and mounting ethics questions, explained - Vox
The lease scratched out Steven Hart's name and substituted his wife as the lessor:
Trump still stands by EPA Administrator Scott Pruitt- CBS News Video Report (at 1:08 in this video, the reporter claims lobbying records show Pruitt's landlord represented several businesses before the EPA during Pruitt's sweetheart lease deal)
Did Scott Pruitt falsely deny knowledge of his aides’ pay raises? It sure looks like it. - The Washington Post
When Trump interviewed Pruitt for this job, he told Pruitt to go visit Carl Icahn after the meeting. Icahn needed relief from EPA regulations and got what he wanted from Pruitt. Carl Icahn slams EPA, says Trump's pick Pruitt will 'do the job'' Carl Icahn Role Shows Common Thread In Scott Pruitt Ethics, Policy Scandals-YouTube; Trump Adviser Icahn Is a Supernova of Conflicts of Interest; Carl Icahn Scrutinized for Shaping Policy That Helped Him Profit - The New York Times Will the republicans investigate?
Pruitt lead security agent removed after telling Pruitt he couldn't use siren for non-emergencies: report | TheHill;
Scott Pruitt asked to use sirens in D.C. traffic and was told no for non-emergency - CBS News;
EPA's Scott Pruitt, Defying White House, Doled Out Huge Raises - The Atlantic; Scott Pruitt’s defenses are crumbling - The Washington Post
Republican politicians claim that Pruitt is the victim of a "liberal" witch hunt.
Maybe Paul and Cruz will go one tiny step further and claim that the Obama media cronies are responsible for Pruitt's conduct. Or even better, just blame Hillary. I wonder how Cruz would react if Obama's EPA Director had done 1/10th of what Pruitt has already done.
Donald defended Pruitt over the weekend claiming that Scott had brought the nation cleaner air and water while saving billions.
The following articles discuss how Pruitt is bringing the nation cleaner air and water: Scott Pruitt's EPA Emissions Rollback Creates Controversy | Time; How Pruitt's EPA Is Delaying, Weakening and Repealing Clean Air Rules | InsideClimate News; 3 environmental regulations Scott Pruitt has been dismantling amid his scandals - Vox; Pruitt's survival strategy: Emphasize his rollback of environmental rules - ABC News
Trump is not draining the swamp. Trump is the Swamp Creature:
Trump & Co. Are Stealing America Blind: A Timeline
++++++++
1. Small Ball:
This is a continuation of small lot buying using commission free trades which is likely to continue until August when those trades expire.
When I am merely mentioning a new add, I will refer back to my most recent substantive discussion without adding any new discussion unless there was a material development since that recent prior discussion.
If I have a profit on my highest cost lot before my commission free trades expire, I will consider selling the lot in order to lower my average cost per share and to increase my dividend yield.
A. Bought 2 Exxon at $73.2-Used Commission Free Trade:
Quote: Exxon Mobil Corp. (XOM)
XOM Analyst Estimates
As previously discussed, I am not a fan.
Current Position: 18 shares
Average Cost Per Share: $76.2
Highest Cost Lot: $78.3
Dividend: Quarterly at $.77 ($3.08 annually)
Dividend information | ExxonMobil
Dividend Yield at Total Average Cost Per Share = 4.042%
Last Ex Dividend Date: 2/9/18
Last Substantive Discussions: Item 3.A (3/19/18 Post) and ITEM # 2.A. (2/19/18 Post)
Closing Price Last Friday (4/6/18): XOM $74.87 -$1.15 -1.51%
B. Bought 3 GIS at $43.9-Used Commission Free Trade:
Quote: General Mills Inc. (GIS)
GIS Analyst Estimates
Current Position: 25 Shares
Average Cost Per Share: $48.9
Highest Cost Lot at $51.5
Dividend: $.49 per share ($1.96 annually)
General Mills - Dividends and Stock Splits
Dividend Yield at Total Cost = 4%
Ex Dividend Date: Today, Monday 4/9/18
Last Substantive Discussions: Item 3.A. (3/25/18 Post)
Closing Price Last Friday: GIS $45.47 +$0.04 0.09%
C. Bought 5 RHHBY at $27.73-Used Commission Free Trade:
Quote: Roche Holding AG ADR (RHHBY)
RHHBY Analyst Estimates
Current Position: 70 Shares
Average Total Cost Per Share: $30.61
Highest Cost Lot at $31.44
Dividend: Annual. The dividend amount will depend on the CHF/USD conversion rate. I am not reinvesting the dividend.
Last Ex Dividend Date: 3/15/18 (owned 60 shares on the ex dividend date)
Last Substantive Discussion: Stocks, Bonds & Politics:Item # 1.A. Bought 5 RHHBY at $28.74 (4/2/18 Post)
Closing Price Last Friday: RHHBY $28.05 -$0.27 -0.95%
This is a continuation of small lot buying using commission free trades which is likely to continue until August when those trades expire.
When I am merely mentioning a new add, I will refer back to my most recent substantive discussion without adding any new discussion unless there was a material development since that recent prior discussion.
If I have a profit on my highest cost lot before my commission free trades expire, I will consider selling the lot in order to lower my average cost per share and to increase my dividend yield.
A. Bought 2 Exxon at $73.2-Used Commission Free Trade:
Quote: Exxon Mobil Corp. (XOM)
XOM Analyst Estimates
As previously discussed, I am not a fan.
Current Position: 18 shares
Average Cost Per Share: $76.2
Highest Cost Lot: $78.3
Dividend: Quarterly at $.77 ($3.08 annually)
Dividend information | ExxonMobil
Dividend Yield at Total Average Cost Per Share = 4.042%
Last Ex Dividend Date: 2/9/18
Last Substantive Discussions: Item 3.A (3/19/18 Post) and ITEM # 2.A. (2/19/18 Post)
Closing Price Last Friday (4/6/18): XOM $74.87 -$1.15 -1.51%
B. Bought 3 GIS at $43.9-Used Commission Free Trade:
Quote: General Mills Inc. (GIS)
GIS Analyst Estimates
Current Position: 25 Shares
Average Cost Per Share: $48.9
Highest Cost Lot at $51.5
Dividend: $.49 per share ($1.96 annually)
General Mills - Dividends and Stock Splits
Dividend Yield at Total Cost = 4%
Ex Dividend Date: Today, Monday 4/9/18
Last Substantive Discussions: Item 3.A. (3/25/18 Post)
Closing Price Last Friday: GIS $45.47 +$0.04 0.09%
C. Bought 5 RHHBY at $27.73-Used Commission Free Trade:
Quote: Roche Holding AG ADR (RHHBY)
RHHBY Analyst Estimates
Current Position: 70 Shares
Average Total Cost Per Share: $30.61
Highest Cost Lot at $31.44
Dividend: Annual. The dividend amount will depend on the CHF/USD conversion rate. I am not reinvesting the dividend.
Last Ex Dividend Date: 3/15/18 (owned 60 shares on the ex dividend date)
Last Substantive Discussion: Stocks, Bonds & Politics:Item # 1.A. Bought 5 RHHBY at $28.74 (4/2/18 Post)
Closing Price Last Friday: RHHBY $28.05 -$0.27 -0.95%
D. Added 10 CJREF at $5.35 and 10 at $4.79-Used Commission Free Trades:
Quotes:
CJREF: Corus Entertainment Inc. Cl B NV (U.S.: OTC)
CJR.B: Corus Entertainment Inc. Cl B NV (Canada: Toronto)
The "F" shares are traded on the U.S. pink sheet exchange and are traded in USDs. Dividends will be paid in USDs after conversion from CADs. Canada will withhold 15% when the shares are owned in a taxable account, but will not withhold for a U.S. citizen when the dividend is paid into a retirement account. The broker must assert its customers tax treaty rights to be entitled to those treatments.
After these purchases, Corus reported fiscal second quarter earnings and declared its regular monthly dividend for the next three months.
CJREF Position: 80 Shares in this account (50 shares in a Roth IRA account)
Average Total Cost Per Share: US$5.96
Highest Cost Lot at US$6.37
Dividend: Monthly at C$.095 (C$1.14 annually)
Corus Entertainment Declares Monthly Dividend for Class A and Class B Shareholders
Dividend Yield: Dependent on CAD/USD conversion rate and will be subject to a Canadian withholding tax when held by a U.S. citizen in a taxable account.
This stock has a very high yield, possibly the highest common stock dividend yield paid by a regular "C" corporation whose stock is traded in the U.S. On the closing price in Toronto before the earnings release, which was C$5.99, I calculated the dividend yield at 19.03% in a prior comment. I am expecting a dividend cut, possibly in the summer.
Earnings for the Q/E 3/31/2018: Corus Entertainment Announces Fiscal 2018 Second Quarter Results
The market responded favorably to this report: CJREF $5.60 +$0.90 19.20% (closing price 4/5/18) The stock had been in free fall before that report. I did not have to wait long before adding another small lot.
The results exceeded analyst consensus estimate. Corus reported adjusted E.P.S. of C$.2 compared to the consensus estimate of C$.11. Corus Entertainment beats quarterly profit expectations: Reuters
CEO Doug Murphy on Q2 2018 Results - Earnings Call Transcript | Seeking Alpha ("To maintain our annual dividend of $1.14 for Class B shares through the end of fiscal 2018, we intend to achieve this objective. We understand there is market interest in our dividend beyond fiscal 2018. We are carefully considering our go-forward capital allocation strategy and will address the details of our post-fiscal 2018 dividend when we report our Q3 results in June.") A dividend cut may be forthcoming based on these comments.
The goal with a high yielding stock like Corus is to harvest several dividend payments and then escape at whatever profit is available, possibly keeping longer term some of the lowest cost lots.
Last Substantive Discussion: Item # 2 (3/1/18 Post)
Closing Price Last Friday: CJREF $5.78 +$0.18 3.21%
2. Equity REIT Common and Preferred Stock Basket Strategy:
A. Bought 50 CIOPRA at $23.73-Used Commission Free Trade:
Quote: City Office REIT Inc. 6.625% Cumulative Preferred Series A Stock
CIO.PA Stock Chart
Last Sold: Item 3.A. Sold 50 CIOPRA at $25.21 (1/27/17 Post)(profit snapshot= $146.97) I discussed the purchase at $22.23 in this comment.
Par Value: $25
Prospectus Supplement
Issuer: City Office REIT Inc. (CIO); Form 10-K
Optional Redemption: On or after 10/4/21 at par value plus accrued and unpaid dividends
Dividends: Quarterly, Cumulative and Non-qualified
Dividend Yield at $23.73 = 6.98%
Next Ex Dividend Date: 4/10/18
Dividend Stopper Clause = Yes (page S-22 of the prospectus)
Change of Control Provision: Yes
CIOPRA goes ex dividend on the same day as the common shares.
Stocks, Bonds & Politics: Advantages and Disadvantages of Equity REIT Cumulative Equity Preferred Stocks
I recently discussed this office REIT in Item # 1.B. (3/12/18 Post).
Closing Price Last Friday: CIO-PA $24.25 0.00 0.00%
3. Short Term Bond/CD Ladder Basket Strategy:
A. Bought 2 Amgen 2.2% SU Bonds Maturing on 5/22/19:
FINRA Page: Bond Detail (prospectus linked)
Issuer Amgen Inc. (AMGN)
AMGN Analyst Estimates
Amgen Reports Fourth Quarter And Full Year 2017 Financial Results
2017 Annual Report (debt listed and discussed starting at page F-27)
Credit Ratings:
Bought at a Total Cost of 99.575
YTM at TC Then at 2.582%
CJREF: Corus Entertainment Inc. Cl B NV (U.S.: OTC)
CJR.B: Corus Entertainment Inc. Cl B NV (Canada: Toronto)
The "F" shares are traded on the U.S. pink sheet exchange and are traded in USDs. Dividends will be paid in USDs after conversion from CADs. Canada will withhold 15% when the shares are owned in a taxable account, but will not withhold for a U.S. citizen when the dividend is paid into a retirement account. The broker must assert its customers tax treaty rights to be entitled to those treatments.
After these purchases, Corus reported fiscal second quarter earnings and declared its regular monthly dividend for the next three months.
CJREF Position: 80 Shares in this account (50 shares in a Roth IRA account)
Average Total Cost Per Share: US$5.96
Highest Cost Lot at US$6.37
Dividend: Monthly at C$.095 (C$1.14 annually)
Corus Entertainment Declares Monthly Dividend for Class A and Class B Shareholders
Dividend Yield: Dependent on CAD/USD conversion rate and will be subject to a Canadian withholding tax when held by a U.S. citizen in a taxable account.
This stock has a very high yield, possibly the highest common stock dividend yield paid by a regular "C" corporation whose stock is traded in the U.S. On the closing price in Toronto before the earnings release, which was C$5.99, I calculated the dividend yield at 19.03% in a prior comment. I am expecting a dividend cut, possibly in the summer.
Earnings for the Q/E 3/31/2018: Corus Entertainment Announces Fiscal 2018 Second Quarter Results
The market responded favorably to this report: CJREF $5.60 +$0.90 19.20% (closing price 4/5/18) The stock had been in free fall before that report. I did not have to wait long before adding another small lot.
The results exceeded analyst consensus estimate. Corus reported adjusted E.P.S. of C$.2 compared to the consensus estimate of C$.11. Corus Entertainment beats quarterly profit expectations: Reuters
CEO Doug Murphy on Q2 2018 Results - Earnings Call Transcript | Seeking Alpha ("To maintain our annual dividend of $1.14 for Class B shares through the end of fiscal 2018, we intend to achieve this objective. We understand there is market interest in our dividend beyond fiscal 2018. We are carefully considering our go-forward capital allocation strategy and will address the details of our post-fiscal 2018 dividend when we report our Q3 results in June.") A dividend cut may be forthcoming based on these comments.
The goal with a high yielding stock like Corus is to harvest several dividend payments and then escape at whatever profit is available, possibly keeping longer term some of the lowest cost lots.
Last Substantive Discussion: Item # 2 (3/1/18 Post)
Closing Price Last Friday: CJREF $5.78 +$0.18 3.21%
2. Equity REIT Common and Preferred Stock Basket Strategy:
A. Bought 50 CIOPRA at $23.73-Used Commission Free Trade:
Quote: City Office REIT Inc. 6.625% Cumulative Preferred Series A Stock
CIO.PA Stock Chart
Last Sold: Item 3.A. Sold 50 CIOPRA at $25.21 (1/27/17 Post)(profit snapshot= $146.97) I discussed the purchase at $22.23 in this comment.
Par Value: $25
Prospectus Supplement
Issuer: City Office REIT Inc. (CIO); Form 10-K
Optional Redemption: On or after 10/4/21 at par value plus accrued and unpaid dividends
Dividends: Quarterly, Cumulative and Non-qualified
Dividend Yield at $23.73 = 6.98%
Next Ex Dividend Date: 4/10/18
Dividend Stopper Clause = Yes (page S-22 of the prospectus)
Change of Control Provision: Yes
CIOPRA goes ex dividend on the same day as the common shares.
Stocks, Bonds & Politics: Advantages and Disadvantages of Equity REIT Cumulative Equity Preferred Stocks
I recently discussed this office REIT in Item # 1.B. (3/12/18 Post).
Closing Price Last Friday: CIO-PA $24.25 0.00 0.00%
3. Short Term Bond/CD Ladder Basket Strategy:
A. Bought 2 Amgen 2.2% SU Bonds Maturing on 5/22/19:
FINRA Page: Bond Detail (prospectus linked)
Issuer Amgen Inc. (AMGN)
AMGN Analyst Estimates
Amgen Reports Fourth Quarter And Full Year 2017 Financial Results
2017 Annual Report (debt listed and discussed starting at page F-27)
Credit Ratings:
Bought at a Total Cost of 99.575
YTM at TC Then at 2.582%
Current Yield at TC = 2.2094%
B. Bought 1 Nextera Capital 2.3% SU Bond Maturing on 4/1/19:
I now own 3 bonds.
As previously discussed, I have 9 Nextera Capital bonds maturing on 9/1/18. Prior to receiving the redemption proceeds from those bonds, I am extending the maturity for Nextera bonds through purchasing Nextera bonds maturing in 2019.
FINRA Page: Bond Detail
Prospectus
Issuer: NextEra Capital, a wholly owned subsidiary of NextEra Energy Inc. (NEE) who guarantees the bonds.
NEE Analyst Estimates
2017 Annual Report
Credit Ratings:
Bought at a Total Cost of 99.725
YTM at TC Then at 2.583%
Current Yield at TC = 2.3063%
C. Bought 2 Beal Bank 1.55% CDs Maturing on 5/9/18 (1 Month CDs):
4. Intermediate Term Bond/CD Ladder Basket Strategy:
B. Bought 1 Nextera Capital 2.3% SU Bond Maturing on 4/1/19:
I now own 3 bonds.
As previously discussed, I have 9 Nextera Capital bonds maturing on 9/1/18. Prior to receiving the redemption proceeds from those bonds, I am extending the maturity for Nextera bonds through purchasing Nextera bonds maturing in 2019.
FINRA Page: Bond Detail
Prospectus
Issuer: NextEra Capital, a wholly owned subsidiary of NextEra Energy Inc. (NEE) who guarantees the bonds.
NEE Analyst Estimates
2017 Annual Report
Credit Ratings:
Bought at a Total Cost of 99.725
YTM at TC Then at 2.583%
Current Yield at TC = 2.3063%
C. Bought 2 Beal Bank 1.55% CDs Maturing on 5/9/18 (1 Month CDs):
4. Intermediate Term Bond/CD Ladder Basket Strategy:
A. Bought 1 American Electric Power 2.95% SU Bond Maturing on 12/15/22:
FINRA PAGE: Bond Detail (prospectus linked)
Issuer: American Electric Power Co. Inc. (AEP)
AEP Analyst Estimates
AEP Reports Strong 2017 Fourth-Quarter And Year-End Earnings
2017 Annual Report
Credit Ratings:
Fitch Upgrades Appalachian Power; Affirms American Electric Power at BBB+ and Other Subsidiaries
In November 2017, AET sold $500M in a 2.15% SU bond maturing in 2020 and $500M in a 3.2% SU bond maturing in 2027. Prospectus
Bought at a Total Cost of 98.613
YTM at TC Then at 3.27%
Current Yield at TC = 2.9915%
B. Bought 1 Anheuser-Busch InBev Finance 3.65% SU Bond Maturing on 2/1/26-A Roth IRA Account:
FINRA Page: Bonds Detail (prospectus not linked)
Final Prospectus Supplement
Issuer: Wholly Owned Subsidiary of Anheuser-Busch InBev S.A. who guarantees the note.
Credit Ratings: Shown in the Trade Snapshot Above
Bought at a Total Cost of 99.409
YTM at TC Then at 3.737%
Current Yield at TC = 3.6717%
FINRA Page: Bonds Detail (prospectus not linked)
Final Prospectus Supplement
Issuer: Wholly Owned Subsidiary of Anheuser-Busch InBev S.A. who guarantees the note.
Credit Ratings: Shown in the Trade Snapshot Above
Bought at a Total Cost of 99.409
YTM at TC Then at 3.737%
Current Yield at TC = 3.6717%
Disclaimer: I am not a financial advisor but simply an individual investor who has been managing my own money since I was a teenager. In this post, I am acting solely as a financial journalist focusing on my own investments. The information contained in this post is not intended to be a complete description or summary of all available data relevant to making an investment decision. Instead, I am merely expressing some of the reasons underlying the purchase or sell of securities. Nothing in this post is intended to constitute investment or legal advice or a recommendation to buy or to sell. All investors need to perform their own due diligence before making any financial decision which requires at a minimum reading original source material available at the SEC and elsewhere. A failure to perform due diligence only increases what I call "error creep". Stocks, Bonds & Politics: ERROR CREEP and the INVESTING PROCESS Each investor needs to assess a potential investment taking into account their personal risk tolerances, goals and situational risks. I can only make that kind of assessment for myself and family members.
I have problems with all of my brokers. The problems are different. For example, I can not buy synthetic floaters, floating rate equity preferred stocks and several other securities at Fidelity.
ReplyDeleteInteractive Brokers charges for real time quotes which I refuse to pay. I simply have another account open which provides real time quotes for free when trading at IB. IB will also fail to file relief at source documents with foreign tax authorities other than with Canada that would secure the tax treaty dividend withholding tax rate for dividends.
I discovered this tax season another problem since I am using TurboTax to prepare my return this year after several frustrating and expensive years using a CPA.
IB claims that it will prepare tax return information for form 8649 (that is for trades). With only a few days left before the tax filing deadline, this has not yet been done by them. Since I have a large number of transaction, I did not want to manually enter the numbers.
First, I contacted their customer representative, possibly the worst in the industry, and pointed out the problem. Her solution was to direct me to the page where I could download the form in the TXT format even though it was clear from my email that I had found the page. After pointing that out to her, she told me to use a different browser and closed the ticket. I used every browser that I have and the form was still not available for download in the TXF format.
I solved the problem by ignoring IB and purchasing some software from TXF Express for $12.99 that allowed me to convert a CSV file, which I could download from IB, into a TXF file that could then be imported into Turbo Tax.
The $12.99 version allowed me to import an unlimited number of transactions. A $3 cheaper version limited the conversion to less than 1000 by TXF file.
http://www.txfexpress.com/software/txf_creator.html#standard
I also had to download some free software from Oracle to get the TXF software to work
After a few minutes of effort, I was able to download all of the IB sale transactions into Turbo Tax.
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I am moving a small account, where I pay a $6.95 commission rate, to Fidelity. This account transfer will give me an additional 250 free trades that will expire in April 2020. I still have 162 free trades that expire in mid-August. So my small ball purchase programs will extend for up to 2 more years.
+++
The VIX is down about 3.5% at the moment, hovering near 20.75. I would expect a larger down move given the strong rally so far with the S & P up over 40 points.
Investors are accepting Donald's assurance China will cave on his trade demands and everything is going to be just great. China makes all of the concessions and Trump will try to accept them with gratitude.
I am not included in the majority who will accept Donald's rosy assurances as facts that will occur. I do believe that the overwhelming majority of U.S. investors, both institutional and individual investors, support Donald and are far more prone to accept his B.S. as reality. I can not process how that is even possible.
Notwithstanding the assurances made in Donald's weekend tweet, I do not expect China to roll over and bend a knee in homage.
Hello South Gent,
ReplyDeleteI see you bought a few shares of General Mills. I have a very disappointed view of the company. The act of buying organic pet food blue Buffalo almost to me smacks of desperation. There are extremely divergent views on whether or not General Mills can really afford this. And whether not they will have to cut the dividend.
https://seekingalpha.com/article/4160254-general-mills-dividend-sustainable-dividend-history-cash-flow-trends-give-us-good-picture
I can't say I'm smart enough to know what will happen. I understand that the general cereal business is declining and that fresh foods and organic foods( plus poor yogurt choices including a glass jar!) have become the foods to eat, but
I am concerned that if they do not at least freeze the dividend for maybe a couple of years they will end up being consumed by increasing debt coupled with a downgrade in their already downgraded S&P credit rating.
Obviously you bought your shares as a trade, but I wondered looking at the numbers what are the odds that they can succeed with this strategy?
Unfortunately, it looks bad to me,. I just wondered what you thought.
Thanks a lot, Sam
Sam: There used to be a Doctor who left comments using "gastro" something. Are you that guy from PA?
ReplyDeleteI am naturally inclined to buy beaten down stocks. My overall level of confidence about General Mill's future is expressed in the number of shares being bought. My confidence will increase, stay about the same or decrease based on what actually happens rather than what I think may happen now.
You are asking me to predict the future again. Donald predicted that China is going to cave to his trade demands.
"He who lives by the crystal ball soon learns to eat ground glass."
"Forecasting future events is often like searching for a black cat in an unlit room, that may not even be there. "
"If you have to forecast, forecast often. "
The Blue Buffalo acquisition is an act of desperation. However, over time, it will provide GIS with some growth opportunities. My best guess is that it will work out for the company but that may not be clear for at least a year.
GIS has made a number of acquisitions in the organic food area (Annie's, Bolthouse Farms, Cascadian Farm products).
https://www.generalmills.com/en/Brands/Overview
The company is doing what it can now to prepare for the future.
I recently tried their Liberte yogurt and liked it.
https://www.liberteusa.com/
Future growth is not going to be in cereals or soups. Progresso is their main soup brand. Those are still good businesses that will provide free cash flow that can be redeployed into growth areas.
I do not believe that GIS will cut its dividend unless absolutely necessary to maintain an investment grade credit rating. I do anticipate that the dividend will remain fixed at $.49 per quarter for 2018 and 2019. I do not have an opinion yet about 2020.
GIS has been a disappointment of late. Big companies go through these phases and I view that as something to expect.
GIS had a tremendous run from 1982 through mid-2016.
A $10K investment made on 1/1/1982, with dividends reinvested, would now be worth $386,687.96 even after the strong recent pullback in price.
https://dqydj.com/stock-return-calculator-dividend-reinvestment-drip/
GIS is likely IMO to go through a period of sideways movement which could last several years.
These sideways patterns can be traded once you can identify the channel range. That range will have outliers above and below the range. At the moment, I see the major channel as being between $40 to $62 with a more likely future channel being largely between $45 to $58. I am guessing of course. I am just eyeballing a five year chart.
https://www.marketwatch.com/investing/stock/gis/charts
You can see the same type of sideways movements for a decade or more in a lot of large caps. Look at a JNJ chart, for example, between 4/1/2002 (around $65) through May 2012 (around $62).
Today did not provide any comfort to the Stock Jocks and may have even cause them to breath into a paper bag once. The DJIA was up over 400 points and slid badly into the close. The rally was sold.
ReplyDeleteDJIA 23,979.10 +46.34 +0.19%
DAY RANGE 23,954.83 - 24,373.18
The S & P 500 followed a similar path with a robust move in the morning and a selloff into the close.
2,613.16 +8.69 +0.33%
DAY RANGE 2,610.79 - 2,653.55
Down 40 points from the intra-day high
https://www.marketwatch.com/investing/index/spx
The VIX ended up for the day:
CBOE Volatility Index (^VIX)
21.77+0.28 (+1.30%)
Day's Range 20.34 - 22.02
https://finance.yahoo.com/quote/%5EVIX?p=%5EVIX
Moreover, the VIX was spiking up into the close.
In a prior comment, I mentioned that the VIX's move down was not confirming in my opinion the robust up move during the morning, or at least made it suspect.
While no one can predict what will happen, I suspect that the market will soon want to revisit and retest the February lows. For the SPX, that would be at 2,532.69, down about 81 points from today close or another 3.1%.
With the way the market rocking up and down, that is not my low prediction for the current correction move that started in February. Easily identifiable events, which may happen but have not yet happened, could send the market much lower.
Earnings are likely to be a positive force but could be swamped by negative events.
The U.S. stock market does not appeared to have any concerns about the search warrant issued by a Federal Court in NYC that has allowed the FBI to seize Michael Cohen's records. The federal prosecutor for the Southern District of NY who was appointed by Trump would be the person responsible for proving that probable cause existed for the warrant. This would be a criminal investigation. Part of that investigation may be focusing on where Cohen got the money to pay Stormy as well as other issues.
ReplyDeleteThe Asian markets are up some in early trading.
The DJIA futures are currently up 256:
24,268 +256 1.07%
Last Updated: Apr 9, 2018 at 9:17 p.m. CDT
https://www.marketwatch.com/investing/future/djia%20futures
Trump made a number of comments today that may come back and bite him. One of those was a clear statement that he would have fired Sessions if he had known beforehand that Sessions was going to recuse himself which then allowed the Deputy AG to appoint Mueller.
Trump has apparently forgotten that Mueller is a life long republican who was originally appointed by George Bush to be the FBI's Director. He received his first Presidential appointment from Ronald Reagan.
https://en.wikipedia.org/wiki/Robert_Mueller
The rally in U.S. stock futures from last night is carrying over into this morning. The impetus is due to some promises made by China's President last night:
ReplyDelete"In a speech that officials had billed as a major address, Xi said Tuesday that plans are under way to accelerate access to the insurance sector, expand the permitted business scope for foreign financial institutions and reduce tariffs on imported automobiles and ownership limits for foreign car companies."
https://www.marketwatch.com/story/chinas-xi-promises-to-open-chinas-markets-to-foreign-businesses-2018-04-09
Nothing concrete was offered Xi Jinping, as he was using words to portray China as a global leader in contrast to Trump's America First policy.
The words do suggest that there is at least a framework for China and the U.S. to negotiate where China will offer some concessions in furtherance of its pre-existing policy of economic liberalization.
E-Mini Dow Jun 2018
24,310 +298 1.24%
Last Updated: Apr 10, 2018 at 6:43 a.m. CDT
At least this market is keeping the Old Geezer awake at HQ's trading desk.
ReplyDeleteNovartis AG ADR
$82.25 +1.18 +1.46%
Last Updated: Apr 10, 2018 at 11:02 a.m. EDT
NVS was up $.87 per share yesterday.
The move yesterday and today appears to be linked to the premium offer made by NVS for AveXis (AVKS). The price tag is $218 per share or about $8.7B in cash. AVKS closed at $115.91 on 4/6 and at $210.46 yesterday.
"AveXis has several ongoing clinical studies for the treatment of SMA, an inherited neurodegenerative disease caused by a defect in a single gene, the survival motor neuron (SMN1). The lead AveXis gene therapy candidate, AVXS-101, has highly compelling clinical data in treating SMA Type 1, which is the number one genetic cause of death in infants, where 9 out of 10 infants do not live to their second birthday or are permanently ventilator dependent. It is estimated that one out of every 6,000-10,000 children born is affected by some form of SMA. . . . The US Food and Drug Administration (FDA) has granted AVXS-101 Orphan Drug designation for the treatment of SMA as well as Breakthrough Therapy designation for SMA Type 1. A BLA filing with the FDA for AVXS-101 is expected in the second half of 2018 and approval and launch in the US is expected in 2019. PRIME and Sakigake designations have been secured in Europe and Japan, respectively."
https://globenewswire.com/news-release/2018/04/09/1466642/0/en/Novartis-enters-agreement-to-acquire-AveXis-Inc-for-USD-8-7-bn-to-transform-care-in-SMA-and-expand-position-as-a-gene-therapy-and-Neuroscience-leader.html
I do own NVS shares, somewhere around 122 now after selling a 30 share lot earlier this year at $93.85 :
Item # 2.A.
https://tennesseeindependent.blogspot.com/2018/02/observations-and-sample-of-recent_3.html
I am buying shares in my Fidelity account as part of my small lot buying program with the last purchase being at $78.82 (3/23/18)
Exxon (XOM)
ReplyDelete$77.07 +$2.20 (+2.94%)
At close: April 10 4:00PM EDT
https://finance.yahoo.com/quote/XOM?p=XOM
XOM received a boost yesterday from a Merrill Lynch analyst report. I do not have access to ML reports.
ML included XOM in its top pick category:
https://www.cnbc.com/2018/04/10/bank-of-america-makes-exxon-mobil-a-top-pick-says-look-for-stock-buyback-this-year.html
My last buy is referenced in Item # 1.A. in this post.
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PG raised its quarterly dividend by 4% to $.7172 per share.
https://www.marketwatch.com/story/procter-gamble-raises-dividend-by-4-to-7172-cents-2018-04-10
I am up to 33 PG shares in my "buying program".
Item # 3.B.
https://tennesseeindependent.blogspot.com/2018/03/observations-and-sample-of-recent_25.html
I will probably just go ahead and take the position up to 50 shares and then quit. I will be reinvesting the dividend.
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Xi's recent speech got the Stock Jocks all excited yesterday. I was thinking that maybe China and the U.S. had just signed a trade deal ending all of their disagreements. Perhaps the Stock Jocks need to pay more attention and actually go beyond a Bloomberg headline.
While China's President did not specifically use Trump's name, he called him a bully who wishes to "power politics or hegemony" to "beggar they neighbor". Hardly complimentary. Importantly, Xi laid out the boundaries for negotiations. What did he take off the table? He is not going to change China's forced technology transfers, a key point problem.
Bloomberg ran a story that China offered to narrow its trade deficit by $50B annually but rejected Trump's demand "to stop subsidizing industries related to its" Made in China 2025 initiative that is used as a pretext to force technology transfers from U.S. firms in key growth sectors like robotics and artificial intelligence.)That is what caused Trump to threaten the increased tariffs.
I have published a new post.
ReplyDeletehttps://tennesseeindependent.blogspot.com/2018/04/observations-and-sample-of-recent_12.html