Canaccord: Time to Get Long $AMZN

Canaccord analyst, M. Graham, is an admitted loser when it comes to predicting the moves in Amazon. The stock was through the roof, and more, last year and he missed it. Therefore, ergo, he’s trying to recapture lightning in a bottle now, since the stock is well off its highs.

“[Amazon’s] stock is down by about 25 percent, and the valuation is as reasonable as it has been in years,” said Michael Graham of Canaccord Genuity. “We believe Amazon’s stock is unlikely to truly retreat into ‘value’ territory as long as top-line momentum is strong, and we expect this to persist for the foreseeable future.”

“We regrettably missed last year’s big move in Amazon’s stock,” Graham said. “While we were confident in top-line growth prospects, we were concerned that margins would expand more slowly than consensus expected. This view was marginally vindicated by Amazon’s fourth quarter [earnings] report, wherein the company guided for a slower margin ramp. This, combined with general market weakness, has caused the stock to drop about 25 percent since the start of the year. We are therefore taking this opportunity to upgrade the stock and re-join the majority which we believe is correct in this instance.”

Amazon is a great company. But seeing this upgrade, with a price target of $750 wreaks of jinx. I believe this man to be the very bane of research reports for Amazon. Therefore, it should probably be taken with a heavy grain of salt, until he proves otherwise.

Its been fascinating watching Hugh morph from a bear pornographer to raging bull. I do believe he’s banned from CNBC Europe, however, as I haven’t seen him there in years. Maybe it has something to do with this performance.

Hendry is getting some press at BBG this morning, fading the view of Kyle Bass and his “kill China” thesis.

“It would be profoundly silly,” he said. “Our lives, every member of this room’s life would change dramatically,” he added. “Chinese people are becoming wealthier and they’re spending. To have a 20 percent devaluation strikes at the heart of that policy.”

If, by chance, you’re lucky enough to be reading this, then you are aware of the impending short squeeze that promises to wreak havoc upon those who are still betting against stockS. It is going to be severe and make reading the Zerohedge chronicles exceedingly difficult this morning.

European markets continue to surge.

Perhaps the market is warming to the notion of production freezes? Either way, crude is higher.

The net result is a hockey stick move in US futures.

In my opinion, recent gains in the market have been due to the numerous statements out of the Fed heads, including the hawkish Bullard, suggestive of a significant change in rhetoric, from the inane to normal.

Add this to the sundry of factors that point towards a dramatic economic slump, in the not too distant future. These statistics will either predict the next recession, or create a great opportunity to invest in distressed assets.

Contracts for delivery in the summer months are currently priced less than $20 a barrel higher than crude oil. If those premiums were realized, they would be the smallest since 2010, when the U.S. unemployment rate was above 9 percent.

That’s too low, Goldman analyst Damien Courvalin said in a research note Wednesday. Last year, gasoline’s premium fluctuated from $23 to $33 a barrel above crude as American drivers drove a record number of miles.

Gasoline’s premium has slipped this year as record production boosted inventories to highest level since at least 1990. Refineries have already started cutting back output, though, and several will soon temporarily shut down for maintenance.

That should boost gasoline enough that the only way summer premiums could be as low as they’re currently priced is if the U.S. economy began to shrink, causing driving demand to fall, Courvalin said.

“The demand implied by such margins would be consistent with a U.S. recession, which our U.S. economist team estimates has only a 15 percent to 20 percent probability of occurring,” Courvalin said in the note.

I claim no expertise in the premiums required for gasoline traders. I do know, however, that there is a dislocation between reality and the one that the analyst community are living in now.

By summer, I suspect we’ll find out who was right, looking back on these confusing research notes.

With a population of over 250 million and GDP of about a trillion, Indonesia is a formidable economic opportunity, growing at 5% per annum. Unlike its Asian counterparts, the Indonesian stock market has bucked the trend in 2016, trading at 6-month highs.

EIDO, long Indonesia, is higher by 10.88% this year.

GDP has been growing with Maddof consistancy.

Stock valuations have climbed to records after the benchmark equity gauge rebounded 16 percent from its September low. Foreign investors have pumped $180 million into the nation’s shares this year through Feb. 16, the only net inflows recorded among eight Asian markets, helping the currency to trade near a seven-month high.

“Sentiment on Indonesia has shifted to positive because investors are seeing some improvement on the ground in terms of the economic recovery,” said Soo Hai Lim, a Hong Kong-based money manager at Baring Asset Management, which oversees about $41 billion. Lim has been increasing investments in Indonesia’s consumer, finance and telecom stocks since October.

The economy, Southeast Asia’s largest, expanded at a faster-than-expected 5.04 percent in the three months to December, picking up from its slowest pace in almost six years in the second quarter. The monetary authority will lower its policy rate by 25 basis points to 7 percent this week, following a reduction last month, according to 17 of 28 analysts surveyed by Bloomberg. The chances of President Joko Widodo carrying out much-needed spending plans increased after he gained support from some opposition parties.

“Indonesia has performed strongly this year because the currency has stabilized and inflation has continued to fall along with the current account deficit,” said Surtees. “We’re seeing more contracts being awarded and signed and the projects getting underway. There’s more comfort in that part of the economy.”

Over the past 3 years, however, the EIDO ETF is down 25%.

Bullard is a complete asshole. He’s been interested in raising rates, ever since birth. For him to come out and say the Fed should cede to the market and cast away Yellen’s ridiculous normalization plans (e.g., dot plot strategy), I think it’s safe to assume the Fed will not purposely wreck the economy in March, or for the foreseeable future.

Two important pillars of the 2015 case for U.S. monetary policy normalization have changed,” Mr. Bullard said. “These data-dependent changes likely give the [Federal Open Market Committee] more leeway in its normalization program,” he said in reference to central bankers’ plans to raise rates further this year.

Mr. Bullard noted that he agrees the basic state of the economy appears sound. “U.S. growth and labor market prospects remain reasonable,” he said.

“I expect 2016 U.S. economic growth to be stronger than last year, and I expect U.S. labor markets to continue to improve. I also expect global growth to be stronger in 2016 than it was last year,” Mr. Bullard said.

But, “inflation expectations have declined too far for comfort” and “I regard it as unwise to continue a normalization strategy in an environment of declining market-based inflation expectations,” he said.

Mr. Bullard said the Fed could change the forecasts “in a way that would cease giving such explicit guidance on the likely path of the policy rate going forward.”

According to the CME, the probability of a March Fed rate hike has plunged to just 6%. Moreover, the market is now factoring in zero rate hikes for 2016.

S&P futures are up 2.

Real estate boss, Sam Zell, who sold his real estate company to Blackstone in 2007 for $39 billion, just prior to the complete collapse of the industry, is bearish again. As a point in fact, I think Sam is perpetually bearish, programmed to talk shit so that prices decline, enabling him to swoop in like the vulture that he is.

Nevertheless, he’s not calling for a redux of 2008, as he feels the banks are strong. He simply believe the United States, as well as the rest of the globe, are inexorably destined for harsh economic inactivity.

Any other day and this news would’ve released the hounds of hell on Asian markets, as this data suggests the financial turmoil is having a rather deleterious effect on business sentiment. However, since markets are bull’d up, noses filled with cocaine, I am expecting investors will dismiss this news as yesterday’s paper and carry about their days in a most distinguishable, delirious, manner– sopping up all of the Asian shares their grubby little hands could muster.

The value of overseas shipments declined 12.9 percent in January from a year earlier, the Ministry of Finance said on Thursday, more than estimated. Imports dropped 18 percent, leaving a 645.9 billion yen ($5.7 billion) trade deficit. Exports to China, Japan’s largest trading partner, were down almost 18 percent.

Falling exports compounds poor sentiment in Japan, where wage gains have stagnated, consumer prices are barely rising and households are reluctant to spend. This year stocks have plunged and the yen has gained more than 5 percent against the dollar amid concerns over China’s slowdown and U.S. growth. This adds to worries about the seesawing nature of Japan’s economy between modest growth and contraction.

“The turmoil in global markets is making companies cautious about spending and also weakening global demand. That will be negative to Japanese exports,” Hiroaki Muto, chief economist at Tokai Tokyo Research Center in Tokyo, said before the trade report was released. “There will be no driver for Japan’s economy as domestic consumption may remain weak, and sluggish exports and production may weaken capital spending in the coming months.”

This is the worst data since the dark days of 2009. Nonetheless, Japanese stocks are going to surge tonight, already higher by 500 points or 3%.

I wasn’t able to blog at full speed today, to discuss the Fed minutes and how they portend to higher stock prices. Essentially, the Federal Reserve has ceded their inane policy of higher interest rates, bowing down to market forces–as they should be.

Rates will go higher, mind you, when the markets are good and ready.

This, of course, bodes well for equity and commodity longs, as a periods of extended accommodation might be in the balance. However, after the euphoria wears off, the hard data of the milquetoast varietal will begin to rear its ugly head again–causing prices to decline. By my vantage point, this should begin to take shape around May of 2016, giving the lot of you several months of respite.

Enjoy it.

What’s all of this talk about the market rally ending? We are going to rally through April. The gains will be taken, like a gold chain snatched from a baby in a stroller, and the celebrations will be hosted atop the graves of overzealous short sellers.

The NASDAQ rose another 98.

Nothing unusual about crude oil, higher by another 8%.

This is coming from a guy who has been talking to God, to build an ark, filling it with zebras, elephants and venus fly traps. When the mood was dour, everyone was prepping for the collapse of western finance, finally and definitively ushering in an era of wanton chicanery. But here we are, saved again, a theme that has stood the test of time since a few men decided it was a good idea to trade shares at Tontine Coffee House.

While a minor sell off is certainly possible, as we’ve gained a very large amount in such a short period. However, I believe the market forces have taken on a didactic demeanor towards short sellers, recalcitrating itself against negative news flow, for the purposes of teaching them a harsh lesson.