Morgan Stanley Calls Yet Another Top in Steel

The fuck out of here with this shit. The ghost of Andrew Carnegie will ensure the price of steel climbs upwards of a billion.

“Our short-term forecast still features a September-October seasonal pullback as China’s steel demand and production rate abates,” analysts including Joel Crane wrote in a report. Over the past 10 years, iron ore prices have on average dropped in September, October and November, according to the report.

The “season is mature now; the reliable September-to-October pullback is nigh,” Crane wrote, adding that rising mine production in Australia and Brazil may also help to blunt prices. “Beyond the seasonal pullback, ore prices should also become increasingly capped in the second half by ongoing supply growth.”

It’s important to understand that the analyst community has been calling for a top, based upon trivial things such as macroeconomics and supply and demand superficialities, for more than a year. Little do they know, the price of steel is climbing on the same gas, the same speed, that is driving stocks. The price of steel doesn’t bend the knee to seasonal factors or Chinese economic slowdowns. The price of steel is driven by the balls of central bankers. Period, end of story.

Hailing from the same small town as Stratton Oakmont, Hain Celestial announced after the close that they’ll be missing earnings expectations, in addition to dealing with a summer annoyance of an accounting irregularity. On this unfortunate news, shares are indelibly lower, by 24%.

Via WSJ:

Hain, which also said it doesn’t expect to meet its fiscal 2016 guidance, said the accounting issues stem from concessions granted to distributors. It is reviewing whether revenue associated with the concessions was accounted for in the correct period, and is also evaluating its internal control over financial reporting.

The review will delay its filing for the quarter ended June 30.

Hain doesn’t expect any revenue-timing changes to affect the total amount of revenue ultimately recognized. Hain said the issue “does not reflect on the validity of the underlying transactions.”

After the company reported this news, it is widely rumored the CEO ate a GMO-laden salad with ‘conventional’ ribeye with loads of gluten ridden bread–also non-organic.

The royalty of Wall Street are reporting changes to their mammoth sized portfolios this afternoon. Some of these picks might’ve been selected under the influence of cocaine or other narcotics, while others were chosen using their vast resources to foresee into the future.

Here are the notable reports.

Courtesy of Briefing.com

As stocks continue to press higher based upon central bank QE and a reduction in US GDP, thanks to woeful retail numbers, melt ups are abound. Amazingly, over 200 stocks are higher by 10% or more this past week.

Some of the best performers include: DRYS, NBY, REN, ACIA, TWLO, CC (shout out to House Dupont), ENDP and EGRX.

Some of the more obvious stocks to move in an environment that rewards WANTON DEGENERACY are the Chinese Burrito stocks, wrought with accounting irregularities and scandal.

Some of today’s Chinese lottery winners are SORL, NQ and MOMO (how fitting). Others that are on the cusp of breaking loose from the chains of skepticism, and will soon be running commando in the tall green grass, are JD, VIPS, SINA, YY, JOBS and CMCM.

All of you should celebrate and enjoy. The market is at new highs and the children are frolicking about the golden fields playing with gems and oil barrels.

What splendour. The celebratory cheers of a vulgar people, inebriated and without purpose,  have been  festooned across Wall Street as decor for America’s greatness. The disenfranchised and the purblind gaze upon men and women– popping champagne corks into each others faces– from the luxuriate confines of their McDonald’s drive-thru windows, and saunter off into a transfixed state with thoughts of opportunity and an ideal to strive for.

“The Fly”,  talking to you from the deepest and darkest corner of his ark, provides the Mcdonald’s drive thru window guy with short squeeze opportunities, courtesy of Exodus.

These stocks possess strong technicals and an abundance of short sellers by which you might endeavor to kill or maim. These lads are sitting ducks, in this cartoonish gallery of vaudeville. Take it to them with your stipends and purchase as many shares as possible. Then borrow from the bank to extend a margin account. After you did that, partake in the options markets, preferably in out of the money weekly contracts–with the stated goal of becoming rich. After you’ve achieved a status of wealth, you should partake in shareholder activism, change your name to William A. Ackman, and write a blog. At which point, you might become jaded enough, wealthy enough, to throw it all away–living the life of a vagabond and throw shit at people during the morning rush hour.

That journey begins here.

Short squeeze plays

A lot of debt is coming due, so CHK is going to raise some more debt in order to refinance the old stuff. It’s a parlour trick that Wall Street plays, kicking the can down the road, hoping for good things to materialize.

Since the CHK bonds have been beaten to shit, they will use some of the proceeds to buy back $500m of convertible senior notes.

This coming after the companies decision to sell its stake in the Barnett Shale has highlighted the companies efforts to pare down its gigantic debt load.

The natural gas producer hired Goldman Sachs Group Inc., Citigroup Inc. and Mitsubishi UFJ Financial Group Inc. to arrange the five-year secured debt, it said Monday in a statement. Proceeds will refinance debt, including backing tender offers to buy back up to $500 million of its bonds, according to a separate statement.

The new loan will be secured by the same collateral backing the company’s $4 billion revolving credit facility due December 2019, according to the statement. The holders of the original revolving credit loan will be senior to those holding the new loan, the company said. The existing loan pays interest at 2.5 percentage points more than the London interbank offered rate.

Wall Street seems to like it.

The pound is now off by 13% for the year. But do not worry, this is all good news.

Following the BREXIT vote and subsequent BOE action to perform fellatio on government bond yields, it should be of no surprise to anyone to see the pound hitting fresh lows.

Commerzbank is out with a note, suggesting 1.24 v the dollar is in the cards.

“GBP/USD remains under pressure following the recent break down from its triangle”.

‘This is bearish price action and given the prior sell off, the risks are on the downside for the next few weeks and the downside measured target from this triangle is 1.2415”.

“Initial support at 1.2944, the 78.6% retracement has been eroded and the focus is on the 1.2797/50 July low and Fibo. Intraday resistance lies 1.3055 and key resistance is now the top of the triangle at 1.3390”.

“Support at 1.2750/78.6% retracement of the move from 1985 to 2007 is regarded as the last defence for the 1.0463 1985 low”.

Pardon the technical trading jargon. The analysis was conducted by Karen Jones, Head of FICC Technical Analysis at Commerzbank.

It’s that time of year again folks. The Deacon of Death, aka hurricanes, are coming. A little fun fact for all of you Fly fans out there. Many years ago, when I lived in Staten Island, I once voluntarily evacuated my house after learning of a serious hurricane heading my way. That hurricane went on to destroy many parts of upstate New York and nearly killed Chronkite, iBC’s former news blogger. I drove all the way to central PA and lived in a hotel for a night. The fucking storm was so intense, even out there, the goddamned trees were falling down.

Fun times.

Now, in the area I live now, just out of Princeton, I get to enjoy the specter of power outages coupled with the basement flooding. As such, I have four sub pumps and a back up portable generator in case of emergency. I’ve been seen cranking up that loud bastard during deluges, connecting home appliances to large, spaghetti wire like power cords, while pouring gasoline into the fucker to keep it going.

That being said, present conditions dictate this year’s hurricane season is going to be a doozy. Where is Dr. Cane, ibc’s former weather blogger, when we need him?

The NOAA reports a 70% chance of 12 to 17 named storms, of which five to eight are expected to become hurricanes, including two to four major hurricanes.

This is an increase from the NOAA’s May outlook, which called for 10 to 16 named storms, of which four to eight were expected to become hurricanes, including one to four major hurricanes.

While a difference of one predicted major hurricane may not seem significant, as Hurricane Sandy proved, one major storm can take a catastrophic toll on life and property.

Obvious plays for the cane season include natural gas, oil and reconstruction companies. Also, generators will be all the rage. You might as well buy some GNRC as a hedge now.

While most of you were busy vacationing with sunscreen on your bottle noses, us bloggers have been slaving away on hot hot computers, chained to the desk in search of news and interesting things to talk about. It’s the neverending struggle that drives us to write the perfect story, with the perfect title, coupled with the best picture to embody our most inner thoughts. After we triumphantly publish our life changing posts, the audience draws crickets from a rusty olde bucket and tosses them at us, indifferent and wantonly unappreciative of our tireless efforts.

Fuck all of you.

Here is what the bloggers on my blogroll have been talking about this weekend. I took the liberty to completely change their titles, as I found them to be grossly inappropriate and lacking in the decorum department.

Zerohedge: I’m Not Saying Lehman, But Lehman

Daily Reckoning: ABANDON THE FUCKING ARK; ICEBERG AHEAD!

Ritholtz: Obama, Hillary and Merkel are Positively Adored Around the Globe, While People Hate and Despise The Devil Donald J. Trump

A Wealth of Common Sense: Afraid to Board the Ark? Bring Some Stocks with You

Calculated Risk: Hotels Are Kicking Ass

Mish Talk: The Bank of Japan is Out of Fucking Control

Prag Cap: Financial Advisors are Fucking Con Artists

Contra Corner: Here’s Why the Economy Blows and Will Continue to Blow Until the End of Time

Dollar Collapse: These Charts Will Prove, Without a Shadow of a Doubt, Rates Cannot Go Much Lower

Wolf Street: Six Years After the Volcker Rule, Goldman, JP Morgan and Others Would Like a ‘Grace Period’ to… Say… 2022!

Howard Lindzon: News Cannot Make Me Money or Become Smarter; Ergo, Donald Trump Sucks

Business Insider: $KORS is Struggling Because Their Models Are Ordinary White Bitches (KORS is +21% YTD)

ReCode: Some Asshole Named Jason CalcANUS Wants to Ban Anonymity on Twitter

VentureBeat: More Stupid Shit from Facebook

Washington Post: A Complete Useless Interview with Tim Cook, Commemorating Five Years of Boring Failure

What the fuck are they printing all of that money for, if they can’t even get the economy to grow at a 1% rate? This is utter horseshit. You know it. I know it. Abe and Kuroda knows it.

Gross domestic product expanded by an annualized 0.2 percent in the second quarter, less than the median estimate of economists for a 0.7 percent increase.

Business spending declined 0.4 percent from the previous three months (estimate +0.2 percent), according to the data released by the Cabinet Office on Monday.
Private consumption increased 0.2 percent over the same period (estimate +0.2 percent).

Net exports subtracted 0.3 percentage point from GDP.

In the meantime, the Bank of Japan are quite busy allocating upwards of $750 billion per annum towards the explicit manipulation of government and corporate yields, as well as stock prices–through their QE programmes. I suppose the ‘wealth effect’ of higher asset prices is helping someone, somewhere, namely underfunded pensions who rely on a rate of return. Or, maybe it helps the bankrupt government borrow money without having to deal with the annoyance of interest expense. Under this scheme, which is being duplicated around the world, big government gets to enjoy the grandeur of runaway fiscal budgets (extra Robber Baron), which funnels large expenditures into the private sector, through the rigging of interest rate–which permits this game of shadows to cast its spell upon markets–indefinitely.

Keep buying. Nothing unusual about this, at all.