The UK election

US equity indexes closed a little higher, sp +9pts (0.3%) at 3141. Nasdaq comp' +0.4%. Dow +0.1%. The Transports settled +0.4%.

sp'daily5

VIX'daily3

Summary

US equities opened in minor chop mode, and remained that way into the 2pm press release from Print Central.

Meanwhile...

Gundlach appeared with Wapner of CNBC. It was an interesting interview, with Gundlach not seeing a recession in 2020. Neither does he see even a 'phase'1' trade deal before the next election. Finally, a second term for Trump is his 'base case' as the democrats are (unquestionably) struggling to find a viable candidate who could realistically challenge Trump.

His comments on government deficit spending accounting for ALL of current growth is something that will be overlooked by many.

The afternoon saw a press release from Print Central, which not surprisingly detailed no change in policy.

Powell covered a fair few issues via the Q/A, not least the ongoing overnight REPOs. Today's cooler USD helped kick Gold, Silver, and the related miners upward. I'd imagine the US President will be pleased if the dollar cools into year end, and across 2020.

Volatility was itself subdued, with the VIX settling -4.4% at 14.99.
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The UK election

Thursday will see the UK have a general election, with all 650 seats up for the taking.

Q. What is my call on it? Its tough to call, not least as I'm seriously biased on this matter.

For the record, I'd like to remain within the EU, and for that, I need either another coalition government, or an outright Corbyn/Labour victory. To be clear, I'm no supporter of any of the main UK parties. I'd merely like to keep my right to live and work anywhere within the EU.

The vote should be pretty tight. My best guess is for no party to have a clear majority. I see a moderate chance of a Corbyn/Labour majority.

Johnson/Conservatives can't expect anything more than a minor majority of 5/15. Even then, the question I keep asking myself.... why the hell would the UK populace vote for Johnson/Conservatives after the last THREE years of failure?

The UK economy is stagnating (Oct' GDP 0.0%) as consumers and businesses are holding back on spending/investment. The mood, not least in the London metropolis, is NOT good. Voters can be expected to protest-vote against Johnson/Conservatives.

I should note, if BREXIT is eventually cancelled altogether, that would be bullish the GBP and Euro, and by default... bearish the USD. A weaker dollar is something almost everyone wants, not least the US President.

Finally, I would note that the mainstream have called every major political event wrong for some years.

They never saw the original BREXIT vote outcome in 2016.
They never saw Trump winning.
They never saw the UK not leaving the EU in March 2019
They never saw PM May resigning
They never saw Johnson becoming PM

... and currently, they see a Johnson/Conservative victory.
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Moody skies ahead of the big vote

... and finally, perhaps one of the best (unintentional) pics I've ever taken. The rising full moon, with a plane (descending toward Heathrow) breaking into shot.

To the moon!

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Extra charts in AH (usually around 5pm EST) @ https://twitter.com/permabear_uk

Goodnight from London
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Softball with CNBC

US equity indexes closed a little weak, sp -3pts (0.1%) at 3132. Nasdaq comp' -0.1%. Dow -0.1%. The Transports settled -0.4%.

sp'daily5

VIX'daily3

Summary

US equities saw a pre-market swing from sp' -13pts to +5pts on a WSJ report that Dec'15th tariff hikes will be delayed. The market opened a little choppy, leaned weak, but then swung upward to fractional gains. The late afternoon saw renewed weakness. Volatility churned, settling -1.1% at 15.68.


Softball with CNBC

As is the case with many things, I have a love/hate relationship with CNBC. Their news reporting is generally reasonable. What has long turned my stomach is the 'in bed with the fed and bankers' attitude they maintain, not least from the Liesman.

Anyway, this post is about yesterday's earnings from Chewy (CHWY).

First, I suggest you watch this (no jumping ahead!)...



We have Wilfred Frost and Contessa Brewer, with Chewy CEO Singh.

The CEO played it well, focusing attention on growth and the increase in gross margins. Those are positives, but what about the actual net loss? Neither Frost or Brewer brought up the EPS loss of -20cents. Seriously, did they not know, or just have an agenda to 'play nice, and not annoy the guest?'

Whilst I heard just softball questions from CNBC, yours truly would ask the following...

Q. How can you be losing money on delivering pet food?
Q. Why are you not charging enough to at least run at breakeven?
Q. You have made no mention of your continuing losses in this interview, do you think we didn't notice?

Clearly, yours truly would never get a job within mainstream TV, as I'm simply not willing to play softball, not least with the central bankers.
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Lets take a look at the chart for CHWY

From an IPO price of just $22, Chewy printed $41.34, but settled with a very spiky black candle. That was indeed a clear warning of bullish exhaustion, and the stock has since been ground to $21.68. Today saw the stock catching a post earnings bounce, settling +5.7% at $25.55. The close above the 50dma leans s/t bullish.
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Last evening on Twitter...

First, headline EPS of -20cents is garbage, that is an annualised -80cents. Growth was an impressive 40%. As for guidance, maybe Chewy's projections are right, and they'll improve into/across 2020.

Chewy results:
https://investor.chewy.com/news-and-events/news/news-details/2019/Chewy-Announces-Third-Quarter-2019-Financial-Results/default.aspx

For the record, no, I didn't listen to the conf' call.


The Cramer and Chewy

*CNBC have a treasure trove of archived material at
 https://www.youtube.com/channel/UCrp_UI8XtuYfpiqluWLD7Lw/videos

The following unedited segment is from the Mad Money show on IPO day - June 14th 2019



Make of that what you will. I would merely note that Cramer is at least correct in saying that Chewy is NOT another Pets.com. Chewy does have a viable business, but for now, there is little sign the company believes it has the pricing power to at least charge its customers enough to run at breakeven. 

Whilst the stock settled Tuesday significantly higher, the 'lockup' expires this Wednesday, and that can't possibly help the stock into year end.


Final note

Yours truly doesn't use the term 'garbage' flippantly. Despite my quirky online moniker, I would argue I'm one of the more balanced out there. I'll be the first to tout the superb earnings of MSFT, BAC, and TGT. I'll be similarly one of the first to slam loss making garbage like UBER, LYFT, or CHWY.

Since the UBER IPO, Mr Market has shown an increasing intolerance for companies with (as Pete Najarian often says) 'no path to profitability'. I am somewhat less polite than that, and will continue to highlight companies with crazy valuations, who seemingly think running at a loss is perfectly fine for the mid, or even long term.

Ohh, and yes, that includes Tesla and Netflix. Both of those companies are very lucky the capital markets are currently still willing and able to lend billions of extra dollars each year. A recession - as is inevitable, will likely see most lenders not willing to offer new capital at ANY price. The clock for Netflix, Tesla, and a fair number of others... is ticking.

Yours... striving for balance each and every day. 

--
Extra charts in AH (usually around 5pm EST) @ https://twitter.com/permabear_uk

Goodnight from London
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If you value my work, subscribe to my intraday service. 
For details and the latest offers, see: Permabeardoomster.com

 

Call it fate

US equity indexes closed a little weak, sp -9pts (0.3%) at 3135. Nasdaq comp' -0.4%. The Transports settled -0.3%. Near term outlook offers considerable chop into the Wed' FOMC.

sp'daily5

VIX'daily3

Summary

US equities opened in minor chop mode. With s/t momentum weakening, the market turned a little weak into the late afternoon. Volatility picked up, with the the VIX settling +16.4% at 15.86.

Today's single economic/financial tweet...

Indeed, the 'everything bubble' continues. However, it should be clear, Presidential complaints about overly high WTIC/fuel prices usually begin not much higher than $60.

Former fed chair Paul Volcker has died, aged 92.

The above picture really sums up what was a vastly different era. Meanwhile, Greenspan (93) is still ticking over.


Call it fate

2016 saw the abomination that was 'Ghostbusters'. Yours truly never did see that piece of garbage. Sony (SNE) are trying yet another reboot...



Whilst Sony are notorious for churning out tier'1 garbage, with three wondrous piano notes at t+1.01, and some words from Venkman, I have some hope for something spooky and magical.

Sideline (NSFW) video from Mr Plinkett...


Yours... very bullish RLM.
(ps... I'm looking forward to the RLM review of 'Rise of Skywalker', infinitely more than the actual movie).
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A winter's sunset in the capital of geo-political chaos

Full moon is Thurs' Dec'12th

--
Extra charts in AH (usually around 5pm EST) @ https://twitter.com/permabear_uk

Goodnight from London
--
If you value my work, subscribe to my intraday service. 
For details and the latest offers, see: Permabeardoomster.com