China Issues Travel Warning to the US; Futures Rise

Chinese tourists spend more in this country than any other country — approximately $36b per annum. Today China issued a travel warning to the US, citing all sorts of shit, from school shootings and Trump’s police state, which in theory should weaken the prospects of luxury goods retailers, like TIF — providing Chinese tourism wanes due to this stupid travel warning.

$TIF falling nearly $3 in the pre-market after they affirmed Q2 EPS to decline year/year, with the jewelry giant seeing sales pressures from the effect of lower foreign tourist spending

— Jon Najarian (@jonnajarian) June 4, 2019

China’s Ministry of Foreign Affairs announced Tuesday a safety warning for Chinese citizens and companies in the U.S.

The Ministry of Culture and Tourism also issued a warning Tuesday for Chinese tourists traveling to America.

These announcements follow the Ministry of Education’s warning on Monday to Chinese students studying abroad that noted recent U.S. restrictions on some Chinese student visas.

In other news, US futures are +200 and the 10yr treasury is up 3bps to 2.11%. I am couched by the fact that WTI is off by another 0.8%. Nevertheless, this bounce looks promising and it should provide hurting longs with a small respite and perhaps an opportunity to lighten up ahead of the storm of fire.

The title would make any skeptic believe this story would turn out to be #1 horseshit — but it’s true!

My reliable source is Bloomberg via Zerohedge.

Legendary investor and now shit-bear, Stanley Drunkenmiller domp’d his stocks and went into treasuries. POMP EET.

But it’s no longer just Albert who sees a deflationary tsunami flooding over the US. The grouchy permabear was joined by billionaire Stan Druckenmiller, who said he could see the Fed funds rate going to zero in the next 18 months if the economy softens, and that he recently piled into Treasuries as the U.S. trade war with China escalated.

“When the Trump tweet went out, I went from 93% invested to net flat, and bought a bunch of Treasuries,” Druckenmiller said Monday evening quoted by Bloomberg, referring to the May 5 tweet from Trump which threatened an increase in tariffs on China and which sparked the most vicious bout of trade-war related selling yet. Explaining his decision, Druck said that it’s “not because I’m trying to make money, I just don’t want to play in this environment.”

Incidentally, for those confused what going from 93% invested to flat means, the answer is he liquidated his entire equity book.

In an interview by Key Square Capital Management founder Scott Bessent at The Economic Club of New York, Druckenmiller went against conventional, and Beijing, wisdom which believes that Trump will capitulate ahead of the 2020 elections, and said that at the moment he doesn’t see Trump giving China room for negotiation because the president sees tariffs as a winning strategy for the 2020 election. That, of course, could change if the economy and markets get weaker, he said.

“If you can analyze Donald Trump more power to you. I’ve been more wrong footed by this guy, and shame on me”, Druckenmiller summarized his feelings toward Trump.

At the same time, as we noted earlier when we pointed out that several of Druckernmiller’s key warning indicators are flashing an “amber alert”, while the former chief strategist for George Soros wouldn’t say whether the U.S. is headed for a recession, he said he sees “many warning signs” adding that he was concerned that Trump may have broken a fragile economy going into the next election and assumes he won’t be re-elected in 2020.

Looking at other asset classes, Druckenmiller said that while Treasuries have become less interesting amid the furious rally in recent days, they remain “the best game in town” if the economy deteriorates, and certainly if rates tumble another 2% to zero or below. “Gold’s not bad either,” he added.

As we reminded readers earlier today, last December Druckenmiller warned that trading conditions could worsen, and that while the indicators he historically used were not red yet…

This isn’t important because Drunkenmiller is a guru anymore — because he’s not. He’s probably a drunk senile bastard. But sentiment is important and CNBC and other networks eat stories like this up and then broadcast it around the world for clickbait in an effort to scare the shit out of Joe Public and get him to sell his stocks.

This is how panics start, with small ripples that turn into tsunamis. Can we talk about leveraged loans yet?

A few personal updates for you.

There is presently a bidding war for my house, with several all cash offers. We are expecting 5 bids in total, if not more.

Now for the bad news.

My Benz was shaking yesterday, so I left it at the dealership. Fucker called me up today and said my cylinder was busted and just to peruse into it — $1500. To fix, we’re looking any $5k. I asked for my car back. I’d rather junk the fucker than pay someone $5k to fix a fucking cylinder, believe me. I’ll likely drop it off at a local mechanic, who dings out at $120 per hour — way better than the dealership FAGS at $144.

Now whenever I get bad news like this — it could only mean one thing: MAJOR WINSHIP IS PENDING. Trust me, this is how I keep myself sane, believing in some sort of cosmic energy out there to justify all of the horrible horribles that seem to afflict me. I’m the most cursed person that I know and I know many people.

The close was solid. The core issues remain the same. “The Fly” made a bold move towards the end of the day — but cannot share it with you because that’s for Exodus members only (NEW POLICY ALERT FOR YOU GRIFTERS OUT THERE).

You like my style and panache? Good.

The one thing I can report is that I sold my largest position today, LK, for a 15% gain. It was a 15% weighting for me, so the win was significant. My NUGT position surged today, now +15% from my basis. I might move on that bitch soon, or double up, or do nothing. Wouldn’t you like to know?

Ah, the pangs of misery and scorn and the devils that surround me. Soon I’ll be leaving this place for good — until then — stay tuned!

You thought you were going to make it — but now look at you. I preside over you with 60% cash and several irons in the fire that all are working swimmingly. I’d tell you what those idea are — but they’re for Exodus closers only.

You need to pay attention to the 10-yr now. Recession is all but a foregone conclusion. We will retest the January lows.

Look at this news.

Bullard says Fed may have to cut interest rates soon due to trade wars, low inflation

And the market is responding with more selling. What does it all mean? Why are we only now burning in hell? It’s because we belong in hell and cannot bounce — because things are spiraling lower.

This is what you get when you get that exuberance going.

SAAS -5.6%.

Let’s recap.

Oil plunging.

Yields plunging.

Analyst talking global recession.

Fucking retarded morons telling you to BTFD.

Listen to me now.

It’s better to be in cash, rather than losing it all in long bets gone horribly long. You don’t owe the market anything, and most certainly not your allegiance. Your job, by definition, is to extract value from the gyrations in price. Right now, and for the most part of a month, stocks have been trending LOWER.

What’s alarming about this drop?

It’s coupled with a shocking decline in semis — off by 25%.

Gold is soaring.

The Yen is strong.

Oil is collapsing.

Bond yields are collapsing.

Talking heads are now pounding the table for ‘global recession’ thanks to trade wars.

Pray tell me, where does one place the market at the trough of said trade war? Just 5% off the highs? I think not.

Do yourselves a favour and raise some cash. I’ve been doing so all day, fortunately taking profits. I will no longer provide the readers of this fine site FREE STOCK PICKS for the duration of late spring and summer — so if you want my actionable trades — you’ll need to subscribe to Exodus — you absolute cheap bastard mother-fuckers.

The cost of Exodus is $1.36 per day. Fuck off if you think I can’t produce that much value in a given day. Fuck off I said (shakes cane furiously at young whipper snapper on lawn).

For the month of May, my quantitative portfolio netted +0.6% for the month — far outstripping the 6% loss in the SPY. Year to date, the Quant has returned +17.7%, crushing the SPY’s +10% showing to small bits and microscopic pieces.

How does it work? Why is it better?

It draws from two pools of stocks, one growth at a reasonable prices (GARP) and another value. There’s also hedges involved, all to do with TLT and GLD. But mostly, the portfolio’s strength is in its diversity, allocating to all 8 sectors of the market evenly and being steered strongly towards stocks with strong technicals. We used the Sharpe ratio as the final arbiter in this picking process.

Last year we had a similar process, but only focused on growth. This year we started a value pool in the hopes of slowing down losses during periods of duress.

So far, so good.

I’m taking the summer off in terms of providing iBankCoin readers with stock picks. I’m taking a cue off so many of you absolute manlets who are choosing to vacation this summer instead of toil. I will, of course, still offer commentary and I will be sure to brag and boast about my adventures and wins — but the picks will remain exclusive domain to the good folks in Exodus — those who choose not to vacation and drink away their time in some tropical locale amidst beautiful things and people. I choose to live amongst monsters, hardened people made from concrete, and I eat gruel, and I trade — even when it’s bad and unprofitable. I STILL TRADE.

Speaking of which, my last pick for you FAGGOTS this summer was NUGT. How’s it doing this morning? Indeud.

Futures are SOFT, but semis are up and so is my largest position LK. I am sure some of you would want to know when I intend to sell LK — but I suppose you’ll have to figure it out on your own — since I will not be telling you. Perhaps I will provide you with a rundown of my wins, just to frustrate you fucking morons and highlight the fact you are nothing compared to Le Fly.

Oil is up, but bond yields are lower. Before barreling back into stocks, you’re gonna want to see bond yields bounce higher, otherwise more panic will set in.

GOOD LUCK TRADING ON YOUR OWN FUCKED FACES!

Greetings plebs!

Based upon some back of the napkin math, the gurus at Morgan Stanley are warning of GLOBAL RECESSION — thanks to Trump’s trade wars. As such futures are hammered down 150.

Investors are overlooking the threat posed by the U.S.-China trade war, which could send the global economy into recession in less than a year, according to a research note published Sunday by Morgan Stanley.

“Investors are generally of the view that the trade dispute could drag on for longer, but they appear to be overlooking its potential impact on the global macro outlook,” wrote Chetan Ahya, the investment bank’s chief economist.

Ahya noted that the outcome of the trade war at the moment “is highly uncertain” but warned that if the U.S. follows through with 25% tariffs on the additional Chinese imports, “We could end up in a recession in three quarters.”

I don’t consider -150 hardly anything to worry about. It strikes me as tepid and I suspect it won’t stick. We’ll either accelerate rapidly to the downside or bounce. Gold is up, however, and that’s where I’m positioned now and I’m glad I bolted out of GUSH before the close on Friday. This is not a time to be brave and resolute, but instead malleable and open to the idea that we can, in fact, collapse from present levels — into the dirt and into the fiery flames of hell — skin removed from bones, bones removed from muscles and CRUSHED into dust and sent back to the earth to nourish the plants and the trees.

May you live in interesting times. Everyone is going to get poleaxed Sunday night.

Exodus closed OVERSOLD on Friday, relaying a signal on our 36 mo algorithms that means the market is highly distressed. In the past 36 mos, this level of stress led to some bottoming out action — providing the end of the world isn’t upon us.

I am only cautioned by the extreme levels we endured this past Oct-Jan — when the scores dove back down to 2009 levels. If we are only to use those score, the 6 mo algorithms, the market IS NOT oversold.

In fact, taking a look at the technology sector — we’re not even close.

Conclusion: I’m cautiously optimistic stocks can bounce here because the 36 mo algo is OS — but if we’re dealing with the issues that harangued us in late 2008 (recession, leveraged loans, plunging crude) — we probably have lower to go before a bounce.