The May Jobs Numbers Were a Catastrophe, Futures Drop

The economy added just 38,000 jobs for the month of May, well below the median forecast of 160,000. While futures are dropping, treating this like chewing on a bag of lemons, there is a silver lining.

If your view was similar to mine, that the economy always sucked and the Fed was suicidal for even thinking about hiking rates into an earnings recession, these numbers are your friend. With BREXIT just around the corner and these numbers hovering over the market like a black cloud, there’s no way the Fed will hike rates in June. If the numbers don’t improve, they will not hike in July either.

Theoretically, a bad economy that just sort of languishes, propped up by QE money forever is precisely what is in store for markets, sort of like Europe.

The unemployment rate plunged to 4.7%, as people fled the jobs market in droves, likely to sell marijuana plants in Denver from the back of their Winnebagos.

The people who took willow bark and made billions from it, calling it aspirin, have an all star team assembled to lend them up to $75 billion in a bid for the bird brains over at Monsanto.

I don’t know what to think of this whole ordeal. Monsanto has been trying to merge with other insidious companies for a few years now, to no avail. Then this Bayer company comes around, with Goldman, JP Morgan, and every one else, bidding $62 billion in an all cash transaction.

Perhaps the illuminati is displeased with the current seed technology out of Monsanto? Maybe they want to consolidate these two companies, while bringing them back to their core Bavarian roots, to produce corn that also gives mosquitoes an infectious form of cancer, that could then be spread to humans, creating heinous abnormalities?

Fun times lie ahead.

German drugs and crop chemicals group Bayer AG, which has made a $62 billion bid for U.S. seeds company Monsanto Co, has added more banks to its acquisition financing package, according to a person familiar with the matter.
HSBC Holdings Plc, Goldman Sachs Group Inc and JPMorgan Chase & Co have joined existing Bayer advisers Bank of America Corp and Credit Suisse Group AG in the loan facility, the person said on Thursday after the German newspaper Handelsblatt first reported on the news.
The loan facility totals 60 billion euros ($67 billion), and can be expanded up to 75 billion euros, the source added.

I’m just kidding. The Bavarian illuminati are a benevolent sort, according to canon law. It’s a conspiracy and isn’t real. And Monsanto is awesome.

These people are Walmart are truly disconnected from their disheveled core customer. Don’t they know they are the defacto welfare state, selling subsidized wares to an underprivileged consumer?

But I guess this makes them feel cool and relevant, having Uber as a vendor for their groceries.

Please.

The retailer will start trying out Uber in Denver and Lyft in Phoenix within the next two weeks, Wal-Mart’s chief operating officer of e-commerce, Michael Bender, said in a blog post. The company previously began a pilot program in March using Deliv to deliver Sam’s Club groceries and other merchandise in Miami.

The move steps up competition with Amazon’s burgeoning grocery-delivery service and provides a potential new avenue of growth for Uber and Lyft. The idea is to let Wal-Mart customers pick out groceries online and then have employees fill the order and give it to one of the ride-hailing companies’ drivers. Shoppers will pay a $7-to-$10 delivery charge to Wal-Mart to have the groceries brought to their door.

“We’ll start small and let our customers guide us, but testing new things like last-mile delivery allow us to better evaluate the various ways we can best serve our customers how, when and where they need us,” Bender said in the post.

A very nice and calm day for markets, as some of the retail and construction related names, violently, moved higher. Shares of M and JOY embody what today was all about. The Bubble Basket reigns supreme, higher by 1.55% for the day, in an otherwise uneventful day for stocks.

Just buy all dips and get rewarded with afternoon rips.

Bonds moved higher as well, creating a sublime environment for all investors, both young and old.

The VIX edged lower again, and is now menaced at the lows. There isn’t any fear of a sell off, because everything is being bought by central banks. Over in Japan, they literally print money to buy ETFs that are tied to indexes. Every so often there are glitches in the matrix. Some overzealous traders get cast aside in asshole stocks, not positioned correctly in the exclusive row of hedge fund hotels.

Andrew Carnegie once said that a wise man should have very few eggs in his basket, opposed to many, and to watch said basket very carefully. That’s the credo that is being followed today, as asset managers cram their way into shares of AMZN, FB, XOM and the like.

Good day and God speed. Le Fly has errands to run. I’ll be back this evening to prognosticate the greatest doom you’ve ever imagined in your life.

Word of advice to Andrew Left from Citron, steer clear of black helicopters and know that you’re trying to take down a company owned by the family who runs this country and many parts of the world, as declared by the Order of the Cinncinatus.

Shares of CC dove lower around noon, after a Citron Report that said ‘the stock was a zero.’

Some of the keynotes of the Citron report:

After 15 years of publishing, Citron can confidently state that Chemours
(NYSE:CC) is the most morally and financially bankrupt company that we
have ever witnessed.

Last week 5.2 million Americans learned that their drinking water is
contaminated with man-made chemicals linked to cancer.

Today, a jury trial started in Columbus, Ohio which adjudicates the first of
the 260 cancer related lawsuits against DuPont in just the Mid-Ohio Valley.

At this very moment, as you read this story, the National Guard is in Vienna
West Virginia facilitating distribution of
drinking water to the public, following
the “Do Not Drink” advisory issued in the
wake of the recent revision of EPA
contamination guidelines for C8 — also
known as PFOA.

While this might be a new story to some, it is has been daily life for the
people of the Mid-Ohio Valley for 30 years. Most recently, the same
problems have been witnessed throughout the United States, and reaching
as far as DuPont-implicated facilities in The Netherlands and Japan.
Chemours, a spin-off from DuPont, is the latest chapter in a well
documented 60+ year pattern of wanton and deliberate abuse of humanity,
the environment, and now the capital markets.

The report reads more like a screed, than something to trade off of.

The truth of the matter is, CC has lots of debt and was offloaded from the parent company, DD, in order to firm up the parent’s balance sheet. CC might not be an important entity to House DuPont. However, bear in mind, these are people who literally admit to raping their own babies and don’t get a single day in prison.

Why wouldn’t the scion of House DuPont  not get a single day in prison after admitting to raping his 3 year old child, you ponder?

According to the judge who sent him home instead of prison, ‘he would not fare well’ in jail.

Black helicopters, people. It’s a conspiracy.

According to the EIA, crude inventories fell by 1.4 million barrels, which was 1.1 million barrels short of the expectations. On this seemingly negative development, crude rallied. I’m beyond the point in my life where I’d think about this stuff and try to rationalize the moves of the market. Markets do what markets want to do.

They’re rallying now– following crude to the upside. The gains aren’t much to clamor over, or sweat like a fat hog. But they’re enough to the point of driving any short seller insane. Aside from my bearish demeanor, all rooted in facts and emotions, I’d be the first person to tell that stocks are behaving well.

However, as long as yields are diving lower into negative territory, my ark, TLT, shall climb ever so gallantly, north. I view the risk rewards of being long TLT v the overall market, inexorably in favor of the latter.

Today’s big winners are in retail, aka the dead mall.

If I were trading again, I’d just tell you to trade the market you see in front of you, not the one you imagine will develop over the course of time.

I’m not taking anything away from robo advice, having an 8 year head start on these clowns with Exodus. I just find it funny how these large banks come a decade or so late to technology and then try to inject it into their antiquated cultures, without pissing people off.

JPMorgan Chase & Co. can give valued clients a free automated investment service or a checking account that comes with no-cost brokerage trades as part of a future bundle of digital-banking products, Chief Executive Officer Jamie Dimon said.

“When you talk about robo and investing, well we can do that, and give it away for free if we want,” Dimon, 60, said Thursday during an investor presentation in New York.

“If you’re a good account, it’s no different than Jeff Bezos doing the $99 Prime and adding services to it, so you’re always making the clients satisfied,” Dimon said, referring to the Amazon.com CEO. Clients with retirement accounts would be one potential target, he said.

Banks are racing to incorporate new technology, including robo-advice, to fend off new entrants seeking to steal established firms’ customers. The service, popularized by Wealthfront Inc. and Betterment LLC, uses algorithms to generate investment-allocation advice with minimal human interaction. JPMorgan, the biggest U.S. bank by assets, has partnered with On Deck Capital Inc. to use its technology to offer small-business loans to the bank’s customers.

By ‘good account’, Jamie probably means upwards of $5 million. Anything less than that will likely get shipped to a call center for pikers.

Essentially, the market is ignoring all of the countless and monotonous Fed speeches about how June was going to be a ‘live meeting’ and how rate hikes were going to happen.

Yeah, anyway, traders are giving a June hike an 18% chance as of today, and a little over 50% for July.

The idea that the market has priced in any rate hikes is nonsense.

Since the Fed are slaves to stocks, I doubt they’ll disappoint their masters come June 14th.

Shares of SRPT are sinking again, after weeks of gains, following an FDA decision to permit extended use of drugs in trials, for compassionate purposes. In other words, they’re scared to deny SRPT’s muscular dystrophy drug, so they’re simply going to create an awkward middleground, whereby the company can only recover its manufacturing costs for the drug, a situation that isn’t economically feasible.

Sandy Walsh, spokeswoman for the FDA, rebuffed the notion that their decision had anything to do with SRPT, saying ‘this decision had been in the works for a long time.’

Right. Sure.

Even if that were true, to leave important drugs like this in limbo, making it available to patients in trials but not for profit for the companies, is unfair and bodes poorly for drug development of rare diseases.

Why drop the coin on developing a drug if the FDA is simply gonna toss it into purgatory?

SRPT is getting hammered on the news.

They’re delivering Alpha, you scoundrels.

Post largest redemptions since the financial crisis, the gurus in our beloved hedge fund industry are doubling down on their moronic strategy, by concentrating their assets into very few stocks. At the present, current concentration amongst the top 10 holdings for hedge funders stands at a record 68%.

“We’re moving out of a macro-focused environment and into one where stock fundamentals matter,” Ben Snider, an equity strategist at Goldman, said by phone. “It’s been an exceptionally poor 2016 and that comes on the heels of many years of underperformance for hedge funds and mutual funds, so this is definitely something the industry needs.”

As volatility crept into the stock market over the last year, some of the biggest losses were in stocks beloved by hedge funds. The 300 companies in the Russell 3000 Index that they owned the most shares in plunged an average 25 percent in the year through Feb. 11, compared with an 11 percent drop in the S&P 500, Bloomberg data show.

The culprit was a breakdown in the momentum style of stock-picking, a strategy that exploded in popularity last year in which investors simply buy companies that went up the fastest in the recent past. The result: a group of investors that pride themselves on independent research and stock-selection all ended up owning the same shares.

“When you’re playing catch-up to zero you really have to focus on the names that are going to get you there,” said Dunn. “Concentration works, it’s the way you should manage your portfolio. Hedge funds are an absolute return strategy and the way to optimize your potential outcomes is having your biggest positions in your highest conviction names.”

“Hedge fund portfolio concentration stands at the highest level on record,” the team, led by chief equity strategist David Kostin, wrote in the May 27 report. “The elevated stock return dispersion will help skilled fund managers generate alpha during the remainder of 2016.”

Or, maybe this strategy can backfire, causing another disastrous year for the 2 and 20 players? One thing is for certain, the results aren’t going to be milquetoast. It’s do or die for many funds out there now.