In What Parallel Universe is a Soaring Dollar Good For Stocks?

I am open to your theories. I’d like to know how making U.S. exporters less competitive is a positive for U.S. gdp. I’ll wait.

For all of you copper longs out there — thinking Donald Trump’s wall made from pure copper was going to cause a bull market in the sector are wrong and the FCX boss said as much today.

“In terms of being a long-term driver of copper prices, it will have an impact but not a huge impact,” Richard Adkerson, chief executive officer of the world’s largest publicly traded copper miner, said Wednesday in an interview at Freeport’s office in Lima. “For copper demand to be robust requires a positive economic situation in China, in the world’s global economy.”

Any spike in copper prices is welcomed by FCX — but if China isn’t kicking our ass through trade — then it’s all transitory.

However, any boost to copper prices from infrastructure spending under the Trump administration could be offset by more protectionist U.S. trade policy, Adkerson said. “Global trade is an important factor for the global economy, so we don’t know how these positions on trade that were expressed during the campaign will be put into place. It’s too early to assess.”

While the surprise Trump victory has helped copper prices, which are up more than 3.5 percent since the election, the Chinese market remains the main driver for total global demand, according to Robert Edwards, a managing consultant at CRU Group.

“There’s a bit more to it than just the U.S. election,” Edwards said Wednesday in an interview at an industry conference in Naples, Florida. As long as demand holds steady, the copper market has an attractive outlook with supply unable to grow as it has in past years, Freeport Chief Financial Officer Kathleen Quirk said Wednesday at a conference in New York. The market is close to being balanced and global warehouse inventories aren’t at historically high levels. It wouldn’t take much in terms of additional demand or supply interruptions to throw the market into deficit, she said.

The good news is CNY is down for a 10th day v the dollar and their currency manipulating schemes are working. However, once Trump gets into office and declares them currency manipulators and slaps the shit out of them with 45% levies, this whole run in FCX and copper might be revoked and slammed back down into the pits of hell.

Markets have been delightful over the past week. The speculative fervor has been the best I’ve seen in many years. Even though the rallies in stocks like DRYS and EGLE are ridiculous, it’s a good thing to see people interested in stocks again. The media is attributing this market greatness to proposed Trump policies, the very same policies that the media said would wreak havoc to the economy if enacted.

Pardon my skepticism, but this feels like a trap.

When the history books are written and these fond memories immediately following the Trump win begin to fade, Obama will get the credit for this market run — not Trump. If you look at what’s been occurring, it’s not all good.

The dollar index is at 14 year highs. Those outside of finance think that’s good news. But my readers know this is the fucking pits of hell for any company trying to export, competing with the likes of the Germans (you know the Germans make good stuff), the anime loving Japanese and of course the dog eaters from China. This places all of our companies at a stark disadvantage. This is precisely the sort of currency manipulation that Trump was warning everyone about.

Also, the odds of a Fed rate hike are now in the 90% range, also something to rue. The Fed hiked rates in December of last year and caused a worldwide meltdown and crash in China, led by forex dislocations that kept people up at night. Markets started off the New Year with its worst decline in HISTORY, in the magnitude of -20%.

Trump also warned us about a politicized Fed and even predicted the market would get destroyed once rates started to go back up.

The number one arbitrager of global growth, WTI, has been LOWER since Trump was elected. The Industrial Production numbers that came out today, marked the 14th straight decline — the worst non-recessionary streak in 96 years.

Also, U.S. bond yields have soared since the Trump win. They’re trying to sell this like it’s a good thing, a sign of inflation — but it’s not. It’s a sign of fuckery, largess. Inflation has been absent for a decade. Now, all of a sudden, before Trump has the chance to do anything, inflation is running hot? I don’t think so. The 10yr has gone from 1.75% to 2.23% in a week. The cost to service America’s $20 trillion in debt just skyrocketed, and you’re there applauding it. You do realize that this spike in yields makes financing Trump’s fiscal stimulus plans all the more arduous, yes?

If the globalist scum, who’ve been gutting this country for decades, truly fear Trump and wanted to lay the perfect trap for him, this is exactly how they’d do it. The market is rigged as fuck, so pardon me as I cynically assess everything, as the disingenuous ‘we love Trump’ narrative is peddled by Wall Street now.

My conspiratorial theories will be proven wrong, only if the market is up by February 15th, 2017.

Let’s put this into perspective before jumping in. This is the greatest speculative trade of 2016, on a percentage wise basis. I have years of experience trading this sector and kmow it well. Historically, the day rates for capes are very, very low. As a matter of fact, I’d bet hardly any of these shippers are making money sub $20k per day. Nonetheless, rates did spike again today, which has resulted in an astronomical gain in many bulkers — led by DRYS.

DRYS is higher by 45% in the pre market. But bear in mind, all of these stocks are micro caps. These aren’t even heavily shorted, because their shares have been dead money since 2008. This newly found fondness for the bulkers, for me, is the most interesting narrative in Wall Street in years. Unfortunately, it will be short lived. The day rates are just too low to justify the share gains.

In Exodus, we have the bulkers sequestered from the tankers. Our algos rank both technicals and fundamentals on a 1-5 scale. Here is the sector, with some data.

How overbought is the sector? We’re entering 2009 overbought levels following the huge spike from the bottom of the financial crisis.

On the bull side, this sector is so hated and underowned, it’s literally orders of magnitudes cheaper now, even after the run, than at any point the past decade. Hitherto, ships were rusting away, idle and drifting to conserve fuel expenses (not an exaggeration), thanks to a zombiefied industry of bankrupt shippers cannibalizing the market.

BEWARE: this is an extremely cash strapped industry run by irresponsible managers who just love to buy new ships. I can promise you they’re meeting with investment bankers now to price large secondaries, in order to finance new tonnage.

A member of Exodus, who’s in the business, thinks it’s an obvious short.

Wow, what low standards you are have. The company gerrymandered an earnings beat on NEGATIVE 6.7% sales growth numbers, on top of Q3 comps of -0.2% — the high end of the range. Ooh, how exciting.

Guidance is in line with analyst estimates and comps are expected to be -1%. Fucking awesome.

The stock is bid up by 9% in the pre market.

Reports Q3 (Oct) earnings of $1.04 per share, excluding non-recurring items, $0.21 better than the Capital IQ Consensus of $0.83; revenues fell 6.7% year/year to $16.44 bln vs the $16.3 bln Capital IQ Consensus. Q3 comparable sales decreased 0.2 percent, near the high-end of the guidance range of flat to down 2 percent.

Co issues in-line guidance for Q4, sees EPS of $1.55-1.75 vs. $1.60 Capital IQ Consensus Estimate; Target raised its expectations for fourth quarter comparable sales and now expects growth in the range of (1.0) percent to 1.0 percent, compared with prior guidance of (2.0) to flat.

Fourth quarter and full-year 2016 GAAP EPS from continuing operations may include the impact of unforeseen discrete items which may be excluded in calculating Adjusted EPS. The Company is not currently aware of any such discrete items beyond those already reported in the first, second and third quarters of 2016. “Favorable gross margin mix and efficient execution by our team drove third quarter EPS performance well beyond our guidance. We also continued to gain market share in key Signature Categories and saw unexpectedly strong sales in the Back-to-School and Back-to-College season.”

On the plus side, back to school sales were strong — taking share away from the helpless Staples.

Sure, this is fucking great for American exporters. Keep telling yourselves that, as the great big trap is being laid for all of you Hillary hating white racist pigs.

In other news, Chinese yuan enters its 10th day lower, fresh lows ahead. What this market needs, obviously, is some Fed rate hikes, in order to get the dollar to 100 year highs — also super awesome and amazing for American exporters.

Trump is gonna have a stroke once he sees what’s been taking place in the FX markets.

After the corporate media spent the better part of the past 15 months lying and attempting to derail Trump’s chances at the Presidency, they’re somewhat beside themselves with both disbelief and astonishment that he’s now taken a ‘fuck off’ approach to doing business with them.

Much to their chagrin, Trump ditched those fuckers this evening, for private dining at NYC’s 21 Club. Some of you out of towners might know this restaurant from the movie Wall Street, where Gekko told that punk Bud Fox to buy some better suits.

Scrambling to get pictures of Trump dining with his family, the secret service relegated them to a fucking dumpster outside the legendary restaurant.

According to a Bloomberg reporter who was there for a separate event, Trump was greeted with cheers upon entering.

Standing ovation and cheers at Keene’s steakhouse for @realDonaldTrump pic.twitter.com/zJsA1t00Sk

— Taylor Riggs (@RiggsReport) November 16, 2016

NOTE: She was wrong about it being Keenes, an old iBankCoin annual dinner locale. Keenes has pipes on the ceiling. 21 Club planes.

The catamites in the press pool are throwing fits, like little stupid infants.

So Trump ditched his press pool tonight to grab a steak dinner– a terrible violation of protocol that his defenders will probably cheer

— Sam Stein (@samsteinhp) November 16, 2016

Local reporters were allowed to stay while Trump’s press pool was told to move down the block. View of restaurant is blocked by a dumpster.

— Anita Kumar (@anitakumar01) November 16, 2016

A few days ago, this clown took to the teevee to complain about not having access to the President elect. Do you blame him?

Bad sign for Trump/media relationship: No “press pool” on Thursday. Better sign: WSJ and @60Minutes interviews https://t.co/GGYu09WmIp

— Brian Stelter (@brianstelter) November 13, 2016

Snowflakes from the press.

I'm fully aware no one will care, but it's already clear Donald Trump has no intention of abiding by normal press pool operations.

— Matt Fuller (@MEPFuller) November 16, 2016

And then there’s this. It’s imperative  to make sure the real news sites have access to the President, the one’s that get paid to lie in order to hurt the country, otherwise all of the fake one’s will get the scoop.

Trump needs to keep the press pool informed otherwise fake news sites will be free to push all kinds of false info about his whereabouts

— Amanda Carpenter (@amandacarpenter) November 16, 2016

Revenge is a dish best served out in the cold, adjacent to a dumpster.

So Trump ditched his press pool tonight to grab a steak dinner– a terrible violation of protocol that his defenders will probably cheer

— Sam Stein (@samsteinhp) November 16, 2016

I haven’t see a beat down like this since I was a teenager in Brooklyn. This was a brutal takedown — full Mortal Kombat style fatality. Better yet, this was a babality.

?WOW?If ya missed @MariaBartiromo's MASTERFUL?KNOCKOUT of Jonathan Gruber today on Obamacare, here's a highlight MASHUP w/Sherlock Holmes! pic.twitter.com/0KkFWhRHgo

— Boston Bobblehead (@DBloom451) November 15, 2016

They just don’t get it. First, they didn’t believe Trump would get the GOP nomination. Then they gave him a 0.001% chance of beating Hillary Clinton. Now they think everything he’s said, from then until now, is not serious and it’s status quo all the way.

WRONG.

The Trump presidency is all about bringing chaos to the New World Order, disrupting the global hegemony of  globalism that is gutting this country from its core. While Obama is in office, these people can talk all they want about what they think Trump will do, once in power. But mark my words, just like all of those fuckster pollsters, all of these analysts will be eating their hats in 1 year henceforth.

Credit Suisse CIO believes Trump is bullish for China, based on lower US taxes, easier regulations, and faster growth.

But what about the tariffs buzz?  You forgot to mention the 45% reduction in mainland China earnings due to levies slapped on Chinese goods by Trump, as promised.

Meanwhile, since election day, China has been manipulating their currency like a motherfucker — now down for the 9th consecutive day — down by 7.4% v the dollar for the year.