Fed’s Mester: The Rate Hikes Will Continue Until Morale Improves

One of the more hawkish Fed heads just said the rate hikes will continue, while wringing her hands and bellowing out a witch-like, craven, laugh.

“While the actual path the fed funds rate follows will depend on the economic outlook, and thus, will be data dependent, my current view is that economic conditions will evolve in a way that will warrant rates moving up gradually over time to more normal levels,” Mester said, according to prepared remarks marks she was to deliver to a Market News International gathering in New York.

She acknowledged the decline in energy prices and net exports among other weakness in the economy. However, she also noted “solid labor market indicators, including strong payroll growth and healthy growth in real disposable income” that “suggest at underlying U.S. economic fundamentals remain sound.”

It’s all about those extra Target and Walmart jobs being added to the mix that’s making the Fed nervous about inflation.

“Until we see further evidence to the contrary, my expectation is that the U.S. economy will work through the latest episode of market turbulence and soft patch to regain its footing for moderate growth, even as the energy and manufacturing sectors remain challenged,” she added.

FML

That’s funny, since the idiots who trade the Fed rate hike probabilities have eliminated the chance of another hike this year.

Can you say ‘downside surprise’? The Fed doesn’t give a shit about your portfolios.

Mester says financial market volatility is ‘not a rationale for making a monetary policy decision’

He came, he saw and he conquered all of the fossil fuels. Under his tutelage, President Obama has overseen the destruction of the coal, natural gas and now oil industries. He refers to oil as “dirty fuels”, almost evil in the methods by which they heat our homes.

The real story here isn’t the fact that Obama wants a solar panel on every housing tenement in America; but the fact that he doesn’t want to let the housing tenement renter enjoy these lower  gasoline prices. He intends to tax everyone, with an outrageous $10 per barrel levy–which will fund more bridges to nowhere and 30 year highway jobs to union controlled contractors.

In the last year of his presidency, Obama has said the country must stop subsidizing the “dirty” fossil fuels of the past and focus on clean, renewable fuels that do not exacerbate climate change.

“By placing a fee on oil, the President’s plan creates a clear incentive for private sector innovation to reduce our reliance on oil and at the same time invests in clean energy technologies that will power our future,” the White House said in a statement.

The long-shot proposal for the oil fee, set to be announced in Obama’s fiscal 2017 budget plan on Tuesday, would provide nearly $20 billion a year to help expand transit systems across the country and more than $2 billion a year to support research and development of self-driving vehicles and other low-carbon technologies.

With approximately $900 billion in distressed oil and gas debt, this tax is equal to rubbing salt into the wounds of someone who was just fatally shot in the head.

The hits keep coming this afternoon.

On the surface, the company reported solid results. However, licensing revenues are slowing down at a significant pace, +31% Y/Y vs. +57% in Q3.

Reports Q4 (Dec) earnings of $0.33 per share, $0.18 better than the Capital IQ Consensus of $0.15; revenues rose 41.9% year/year to $202.8 mln vs the $200.66 mln Capital IQ Consensus.

• License revenue grew to $133.1 million, up 31% year over year.
• International revenue grew to $53.7 million, up 63% year over year.
• Added more than 3,600 new customer accounts.
• Closed 414 transactions greater than $100,000, up 36% year over year.

Shares are down nearly 40% in after hours.

Related software plays are down in sympathy, including CRM (-4%), SPLK (-9%), WDAY (-3.3%).

Guidance on the call is as follows:

• Q1
• DATA sees Q1 EPS in the range of ($0.12)- ($0.08), Capital IQ consensus $0.15
• DATA sees revenue in the range of $160-165 mln, Capital IQ consensus $179.53 mln.
• FY16
• Sees 2016 EPS in the range of $0.22-0.35, Capital IQ consensus $0.61.
• Sees FY16 Revenue in the range of $830-850 mln, Capital IQ consensus $871 mln (Prior $845-865 mln)
• Q1 seasonality will be amplified
• 2016 an investment year.

They blamed the dollar, the weather and whatever else they could conjure up to mask incompetence. They just lowered guidance from 0.57 to 0.07, ok. Margins are eroding. Sales are declining. This company is toast and so are their ridiculous furry boots.

Reports Q3 (Dec) earnings of $4.78 per share, $0.03 better than the Capital IQ Consensus of $4.75; revenues rose 1.4% year/year to $795.9 mln vs the $832.94 mln Capital IQ Consensus.
Reports Q3 gross margin of 49.1% vs 52% prior guidance, ~51% estimate and 52.9% year ago

The decline in gross margin was driven by greater than planned promotional activity and a 110 basis point impact from foreign exchange headwinds caused by the strengthening of the U.S. Dollar.

Co issues downside guidance for Q4, sees EPS of $0.07 vs $0.57 prior guidance and $0.39 CapIQ consensus; revs growth +7.2% vs +18% prior guidance and +13.5% to $387 mln consensus. DECK Q4 guidance is based on gross profit margin of 45.5% vs 44.7% year ago and ~46% estimate.

“Our third quarter was more challenging than we expected as warm weather and weak store traffic across retail pressured demand.”

We need moar rate hikes.

LNKD just posted a disastrous quarter, with poor revenue guidance and pathetic earnings power. Watch the premium get sucked right out of the shares. This is the beginning of the end for Linked In, an utterly useless for of social media, otherwise relegated to hucksters with profile pictures in suits and cheap ties.

It’s like a fucking living resume. Fuck you Linked in.

Reports Q4 (Dec) earnings of $0.94 per share, excluding non-recurring items, $0.16 better than the Capital IQ Consensus of $0.78; revenues rose 34.0% year/year to $862 mln vs the $857.26 mln Capital IQ Consensus.

Co issues downside guidance for Q1, sees EPS of ~$0.55, excluding non-recurring items, vs. $0.74 Capital IQ Consensus Estimate; sees Q1 revs of ~$820 mln vs. $866.50 mln Capital IQ Consensus Estimate.

Co issues downside guidance for FY16, sees EPS of ~$3.05-3.20, excluding non-recurring items, vs. $3.73 Capital IQ Consensus Estimate; sees FY16 revs of $3.6-3.65 bln vs. $3.91 bln Capital IQ Consensus Estimate.

In the quarter, cumulative members grew 19% to 414 million, unique visiting members grew 7% to an average of 100 million per month, and member page views grew 26%. This yielded 17% year over year growth in page views per unique visiting member, continuing a pattern of strong engagement growth over the past several quarters. Mobile in particular grew 3x faster than overall member activity, and now represents 57% of all traffic to LinkedIn.

Absolutely poleaxed.

This was the most pathetic excuse for a rally since the false starts of the dot com days, post implosion. Less than 60% of stocks were up. Oil could not hold onto gains. Gold rages higher. The dollar sold off. Treasuries rose.

Could it get more convoluted?

Investors are unwilling to commit to this market because nothing has been resolved. By nothing, I mean Fed, Oil, China, better known to me as FOC.

Until this concerns get addressed, you’ll continue to enjoy 60% breadth days, with smart money fleeing for the exits into bonds.

I find solace in knowing somewhere Jim Cramer is geeking out over this correlation, as he fucking hates it to the very fiber of his being.

Oil is giving up the goods; therefore, stocks are going lower.

Good old crude, good for absolutely nothing, with exception to heating, transport, plastics and textiles.

Get this, the dollar is tanking, as oil tanks. Who would’ve guessed that? EVERYONE LOSES, in this fucked up casino.

Gold is going higher and has been the bastion of safety, until it isn’t anymore and the shares of the junior miners drop by half again.

As for my money, it stays aboard the ark. We haven’t departed yet. I do see the clouds emerging ahead and the forecast is calling for a light drizzle, amounting to just 10,000 ft of rain. It’s not too late for you to come aboard. I have lots of room next to the boa constrictors and the snow leopards.

It might be a byproduct of commodity related stocks going bazerko (sp?) to the upside, with stocks like CENX and FCX up more than 20%. Nevertheless, it’s worth noting that stocks with 15% or more of their floats sold short are up 3% today, on a median basis. The average return is nearing 4%.

Also, running my momemtum screen in Exodus, which identifies stocks within 1% of daily high end of range, I am seeing lots of short squeeze plays.

How to play it? The fuck do I know? I suppose you can go with some biotech, ranging from GILD down to XON along the risk dial. But I am busy inviting birds and reptiles into my ark, TLT, and I have no interest, whatsoever, in delving into your degenerate world of individual stocks right now.

Shares of BHP and FCX are through the roof this morning as the commodity extended an already decent run, higher in 10 of the past 13 days.

With 17% of FCX’s float sold short, Carl “give me three…seats on your rotten board” Icahn as its largest shareholder, this is setting up to squeeze the shorts and expedite a Viking funeral.

It’s worth noting, at 0.34x sales for FCX and 1.2x for BHP, both stocks, valuation wise, have never been cheaper.

Then again, the world was never ending before, was it?

Stocks look strong. I like the tone and breadth of this rally.

Martin Shkreli went before the show-boaters in congress to testify regarding excessive pricing of drugs. This is especially absurd since Martin is a small guppy fish in a sea of poor people eating sharks. I imagine the fuckheads in Congress chose Martin because his company didn’t donate millions of dollars towards political campaigns, like many of the housing tenement people eating sharks.

Here is the testimony in its entirety.