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HI Market View Commentary 03-14-2022

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HI Market View Commentary 03-14-2022

I am excited for the first time in almost two years about the market opportunities  !!!

How much have stocks fallen that we are currently in ?

BIDU – 75%

F – 45%

UAA – 50%+

AAPL – 18%

BA – 50% +

FB – 50% +

DIS – 35%

SO for collar trading what does this mean?

We are sitting on a lot of cash and we are ready to add shares shortly !!!!

BIDU we have money to add 40% more shares of stock

F we have money to buy 100% more shares of stock

UAA we can buy 40% more shares of stock

BA we can buy 40% more shares of stock

FB we already bought 66% more shares of stock

DIS we can add 30% more shares of stock

BTO  a share of stock for $100

For 100 shares we have a purchase price totaling 10K

RISK in the trade is?= $100

Added Long puts @ $100 and it cost $5%

New cost basis = 100 + 5 = 105

New risk in the trade?105 – 100 = $5 of 5% of total invested capital

SO when the stock loses 40% we can add 40% more shares of stock?  NO IT NOT

100 share * $100 = 10,000 / 60 = 166shares

We have 140 with a cost basis of (per share) = Total value =

SO if the stock gets back to $65 per share = 166 * $65 = $10,790

SO if the stock gets back to $75 per share = 166 * $75 = $12,450

SO if the stock gets back to $90 per share = 166 * $65 = $14,940

I’m EXCITED because our markets have moved and we have a cash horde to buy more shars

2.5 million cash and the selling of puts = 1.65 million or 25% of portfolio are cash

The trigger to buy low and sell high = A bottoming of the bearish trend, after Wed FOMC rate hike meeting and probably a week after that meeting for tax selling = NEXT Wednesday thru Friday

We have been suffering downward movement and the cycle to go higher will net us plenty of new shares to also go higher

What sectors are “normally” better in an Interest rate hike environment ?

When will the Russia/ Ukraine war stop be shoved underneath the carpet ?

When supply lines come back on to 90% we will see supply far exceed demand?

Auto, Health Care, Consumer Staples

I’m really excited because earnings were too high yet

DOWNLOAD THE Handout !!!

What moving our market higher?= Capital Flows into the US markets, Personal Income rising

Right now everyone has RUN out of the store when the whole market went on sale !!!

Just a relief rally makes us very profitable for the year

https://www.briefing.com/the-big-picture

The Big Picture

Last Updated: 11-Mar-22 15:20 ET

Russia, gas prices, the Fed, and earnings estimates leave a lot to be irked about

We are writing from an objectively irked disposition this week because there are a lot of things that are irksome.

We wish it wasn’t so, but when you combine a delusional dictator with naive central bankers and stubbornly optimistic analysts, it is just that.

Gas Pains 

Russian President Putin is everyone’s worst enemy right now — well, almost everyone. China hasn’t had the backbone or moral character to penalize Russia for invading Ukraine. Instead, the wannabe world power hides behind a self-serving foreign policy that won’t stretch beyond its own interests.

That is irksome and it should irritate anyone who isn’t part of Putin’s inner circle or misguided ilk. But here we are. Russia has invaded Ukraine and China can’t even bring itself to call it an invasion.

Commodity prices have risen sharply in the aftermath of the invasion, particularly energy, agricultural, and metals futures, all of which will translate into higher costs for producers that, in turn, will translate into higher costs for consumers.

That point is hitting home already for anyone driving a car or buying food, which covers just about everyone. 

Your author, who resides in a suburb of Chicago, needed 20.5 gallons of gas yesterday to fill a nearly empty tank. That cost $92.00. A month ago, a similar fill up cost $75.00, and a year ago, it cost $61.00, according to AAA.

That was irksome.

Same Old, Same Old

In the coming week, we will get a new policy directive and updated economic projections from the Federal Reserve. You know, the same Federal Reserve led by a chairperson who kept convincing his colleagues that the Fed’s consensus view should be that inflation pressures are going to be temporary.

The same Federal Reserve that didn’t think roughly $9 trillion of fiscal and monetary stimulus — or close to 40% of GDP — would create anything other than transitory inflation pressure even though it saw demand come roaring back from the pandemic low (because of the stimulus) at a time when supply chains were broken.

The same Federal Reserve that saw the consumer inflation rate hit a near 40-year high of 7.5% in January and then said it would continue to buy Treasury and mortgage-backed securities into March.

The same Federal Reserve that is now trying to convince everyone not to worry, that it has a line now on how to get inflation under control, and that — this might be the most irksome point of all — it isn’t behind the curve in fighting inflation.

Well, that curve got longer in February, as everyone saw in the Consumer Price Index. The 7.5% inflation rate in January — surprise! — elevated to 7.9% in February. But wait, there’s more.

With the commodity inflation seen this month, not to mention rising rent costs and further price increases for just about everything else, it’s a safe bet that March CPI will have at least an 8-handle on it.

And you want to know something? The policy rate has yet to be raised. That will change in the coming week with a whopping 25-basis points increase to a target range of 0.25-0.50%.

If inflation were a person, it would be taunting the Fed something awful right now. “Oooooh, 25 basis points, I’ll behave now… I promise.”

It’s irksome knowing the Fed hasn’t done anything yet, which makes it irksome to see the inflation rate where it’s at, and just as irksome to know that the Fed should have gotten off the zero bound some time ago so that it would have some rate-cutting flexibility in the event there is a material shock to the economy. 

An Earnings Shock

If you ask us, there has been a shock to the earnings outlook since the year began. Let’s review:

  • Russia invaded Ukraine. We don’t recall that risk factor cited in any of the year-ahead preview notes. It wasn’t in our preview.
  • There has been an energy-price shock that is hitting hard in Europe and is starting to hit home around the globe. WTI crude prices are up 45% in 2022 and natural gas prices are up 34%.
  • Wage pressure have increased, but discretionary spending potential has been pinched by the decline in inflation-adjusted wages.
  • Consumer confidence levels have sunk as inflation expectations have risen.
  • The dollar has strengthened, which will weigh on earnings prospects for multinational companies.
  • Prices for raw materials have risen appreciably (good for energy and materials companies, but not so good for others).
  • Global equity markets have suffered steep losses, eroding investor confidence and diminishing the wealth effect.
  • Supply chain uncertainty has been exacerbated with export controls by Russia and against Russia.
  • Interest rates have gone up (and should keep going up considering the Fed hasn’t even raised rates once yet).

These factors notwithstanding, earnings estimates have been increasing. According to FactSet, the forward 12-month EPS estimate has increased from $221.92 on December 31, 2021, to $228.28 today, and the calendar year 2022 EPS estimate has increased from $221.92 on December 31, 2021, to $224.00 today.

Maybe it’s just us, but we’re inclined to think the estimate trend is divorced from reality. It’s irksome to us anyway that analysts’ aggregate earnings estimate has moved higher as the fundamental backdrop has worsened.

To be succinct, interest rates are higher, inflation is higher, real wages are negative, consumer confidence is weak, oil and gas prices have surged along with food costs, and, lest we forget, there is a war on the European continent that has been started by a delusional leader with nuclear weapons at his disposal.

Earnings estimates are too high.

What It All Means

It’s not a familiar position to be irked by so much, but it was an impossible feeling to avert this week.

It is the culmination of geopolitical uncertainty, monetary policy angst, and what strike us as glaringly unrealistic earnings expectations. In other words, there were continued reminders that volatility in the stock market should remain high and that return expectations this year should get dialed down.

Granted there could be a significant rally if the Russia-Ukraine situation gets defused and Russian troops turn tail and go back to Moscow. Even so, the road ahead for the stock market this year won’t be easy even if the Russia-Ukraine situation is no longer a situation. That’s because the Fed needs to be more aggressive to get on top of the inflation situation.

To do so will require tighter monetary policy, which has proven through history to be an irksome undertaking for the stock market.

Patrick J. O’Hare, Briefing.com

https://go.ycharts.com/weekly-pulse

Where will our markets end this week?

Lower

DJIA – Bearish

Rolling 12 month gains – +0.51%

SPX – Bearish

Rolling 12 months gains 5.83% or down 21% from the highs

COMP – Bearish

Rolling twelve month average -5.55 or down just over 30% from the highs

Where Will the SPX end March 2022?

03-14-2022           -4.0%

03-07-2022           -2.0%

02-28-2022           -2.0%

Earnings:  

Mon:          MTN

Tues:          DOLE

Wed:          JBL, GES

Thur:         FDX, GME, DG

Fri:            

Econ Reports:

Mon:         

Tues:          PPI, Core PPI, Empire

Wed:          MBA, Retail Sales, Retail ex-auto, Business Inventories, NAHB Housing, Import, Export, FOMC

Thur:          Initial Claims, Continuing Claims, Phil Fed, Housing Starts, Building Permits, Industrial Production, Capacity Utilization,

Fri:             Existing Home Sales

How am I looking to trade?

What about BIDU as it scares me and the humanity issues over in China?

#1 to my knowledge we’ve never D-listed a stock over humanity atrocities in another country

#2 they were not one of the 5 companies listed in the SEC report – BABA, Yum China

#3 IF BABA, BIDU, JD, NETEASE,  they D-List they our shares will relist on the HONG KONG and there is billions of Asian money waiting to invest into their own regional shares

www.hurleyinvestments.com 

www.myhurleyinvestment.com = Blogsite

customerservice@hurleyinvestments.com = Email

Questions???

https://www.fool.com/investing/2022/03/01/lockheed-and-palantir-popped-boeing-stock-dropped/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article

In a bull market for defense stocks, Boeing’s commercial business is at risk.

What happened

In contrast to yesterday, when defense stocks of all stripes moved in only one direction — up — Russia’s continuing attack on Ukraine had divergent effects on defense stocks today. By the time the closing bell rang, shares of defense hardware giant Lockheed Martin LMT 5.26% ) had gained 5.3% and Palantir Technologies PLTR 2.79% ) — a powerhouse of the defense IT industry — was up 3%.

In contrast, Boeing BA -5.08% ), maker of F-15 Strike Eagles fighter jets for the Air Force and F-18 Super Hornets for the Navy, saw its stock plunge 5.1%. Why is that?

In a bull market for defense stocks, Boeing’s commercial business is at risk.

What happened

In contrast to yesterday, when defense stocks of all stripes moved in only one direction — up — Russia’s continuing attack on Ukraine had divergent effects on defense stocks today. By the time the closing bell rang, shares of defense hardware giant Lockheed Martin LMT 5.26% ) had gained 5.3% and Palantir Technologies PLTR 2.79% ) — a powerhouse of the defense IT industry — was up 3%.

In contrast, Boeing BA -5.08% ), maker of F-15 Strike Eagles fighter jets for the Air Force and F-18 Super Hornets for the Navy, saw its stock plunge 5.1%. Why is that?

Image source: Getty Images.

So what

At last report, more than one dozen NATO member states had announced plans to send military aid to Ukraine. The total amount of military equipment being sent — both lethal and non-lethal — now stretches into the billions of dollars, versus less than just $1 billion that had been promised prior to Russia’s Feb. 24 invasion.  

But even those billions in military equipment being shipped to Ukraine pale in significance to the tens of billions of dollars that now stand to be poured into the enlarged defense budgets of NATO members back home. Just this past weekend, Germany announced plans to triple its defense spending in 2022, by adding $112 billion in supplemental spending. Furthermore, Germany committed to raising its ongoing defense spending to in excess of 2% of GDP — which on a $3.8 trillion economy implies that Germany will grow defense spending to $76 billion annually going forward — about a 50% permanent increase.  

Now what

As more and more NATO countries follow in Germany’s footsteps, I suspect we will see a tidal wave of new investment in defense all across Europe — tens of billions of extra defense dollars spent every year going forward. It makes sense, therefore, that investors would be betting today that Lockheed, Palantir, and Boeing would benefit from all that spending.

(Indeed, when this morning equity research firm Wolfe Research upgraded Lockheed Martin stock to outperform, it also took the opportunity to upgrade the entire defense sector to overweight, as TheFly.com reports.)

The more interesting question today is why Boeing is not benefiting from this positive sentiment?

Granted, Boeing’s not a pure-play defense business like Lockheed is. But at $26.5 billion in annual revenue, Boeing’s defense, space, and security business is certainly big enough — even if Lockheed’s defense business is two times bigger.

Granted, too, Boeing announced last night that it has had to close its offices in Kyiv and “pause” Boeing airplane training at its Moscow campus in reaction to, respectively, attacks on Kyiv and sanctions against Russia. Such moves reinforce the notion that Boeing’s commercial airplanes business will take a hit from this conflict that the more defense-oriented Lockheed will not suffer.  

But even so, I suspect that the rearmament of Europe is a big enough trend that it should be giving Boeing stock a lift as well as Lockheed Martin. Were it not for the fact that Boeing stock already looked overpriced relative to Lockheed Martin going into this conflict, I might even be tempted to call today’s sell-off a buying opportunity for Boeing stock.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool owns and recommends Palantir Technologies Inc. The Motley Fool recommends Lockheed Martin. The Motley Fool has a disclosure policy.

https://fortune.com/2022/03/11/housing-market-prices-frenzy-will-pass-not-this-spring/?utm_medium=social&utm_source=facebook.com&xid=soc_socialflow_facebook_FORTUNE&utm_campaign=fortunemagazine&fbclid=IwAR1t6OnIy1XQcVKz2mlSIwDxRJv4HdCUnAv3Uv8H5svmsbkoksV1ZpFUnCQ

The housing market frenzy will pass. Just not this spring

BY 

LANCE LAMBERT

March 11, 2022 11:11 AM MST

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