Alright folks, thanks for tuning into the Diary and allowing me to share my thoughts, observations and ideas with you. Doug is back tomorrow, but hopefully I'll get to play in your sandbox again before too long.

Happy trails!

As we gear into the summer vacation season, this means looking at travel-related stocks such as United Continental (UAL)  , Alaska Air (ALK)  , Hertz Global (HTZ)  , Hilton Worldwide (HLT) , Hyatt Hotels (H) and New Jersey-based Wyndham Hotels & Resorts (WH) . With rising fuel costs, airlines are likely to see some margin pain in the short term, which likely means they'll underperform. We don't have that problem with car rental companies, but the year-over-year increase in gas prices could put a crimp in some travel plans. While hotels may feel the indirect pinch of higher gas prices, they are dealing with another problem all together -- the sharing economy and Airbnb.

As anyone who has stayed at a hotel recently, you know there is the tax component to the final bill. In my experience, it tends to be snuck in at the end and can pack quite a wallop depending on where one is staying. For example, the hotel room tax in New York City is 14.75%.

That helps explain the allure of Airbnb to consumers who are contending with pressured disposable income as they service student debt, auto loan debt and credit card debt in what is an increasing interest rate environment. But... of course there was as "but" coming... it's given rise to a competitive playing field toward Airbnb-listed properties vs. hotels. There are also the mounting complaints over how the short-term rental market, like the one that is Airbnb's bread and butter, is not good for neighborhoods. And that's before we talk about zoning and other safety standards.

This is something that I'll be watching in Washington, D.C. over the summer months to see if this notion of crony capitalism -- giving one business preferred treatment - is addressed. Until it is, it's something that is poised to weigh on hotel occupancy rates, a key determinant of their profitability and EPS generation.

Reuters is now reporting GameStop (GME) is holding talks with private equity firms, including Sycamore Partners, over a potential transaction.

More here.

When investing it pays to keep an open mind, whether that is regarding Blue Apron (APRN) , Snap (SNAP) or even Fitbit (FIT) .
Its been a bit since I checked in on FIT, but Jonathan Heller posted a solid note on the company today, and while he shares the same view I do - it's an eventual takeout, because it's offerings are more feature than product as Steve Jobs was fond of saying - he makes an interesting case to nibble on some FIT shares.

There are no companies reporting after today's market close. After hours tomorrow we'll have FedEx (FDX) and Oracle (ORCL) .

With little reporting going on, I expect these two will be gone over with a fine tooth comb, especially since June quarter earnings season kicks off in about a month. That means between now and then, investors will be looking for any and all signs for what that upcoming earnings season may bring.

With FedEx, I'm looking for a pick-up in business activity, but I'm also going to be listening for comments in and around the accelerating shift toward digital commerce. FedEx clearly called that out with regard to the 2017 holiday shopping season.

I'll also be listening to comments on fuel costs, and the degree to which surcharges and price increases are being planned. I expect FedEx's results to determine the next move in United Parcel Service (UPS) shares, which are up some 15% after bottoming out in late March.

GameStop (GME) is reportedly holding talks with private equity firms, including Sycamore Partners, over a potential transaction, according to Reuters.

More here. 

SurveyMonkey confidentially registered for an initial public offering with the SEC, according to Reuters. The online survey company, which sought the IPO through its parent company SVMK Inc., has not yet determined the number of shares or proposed price range for the offer.

Given the spotty performance of tech related IPOs in the somewhat recent past, this one bears watching.

I'm not sure how steep the barriers to entry are, and I suspect this could be one of those companies that could be crushed by an announcement that either Amazon (AMZN) , Facebook FB or Alphabet  (GOOGL) were getting into the market.

In other words, Blue Apron (APRN) all over again.

One of the company's that continues to deliver, at least to me, is Amazon (AMZN) , which has a number of tailwinds pushing its business if we look past the sector classification(s) for its businesses. One of the keys to the company's business is its expanding footprint that leverages its logistics. In recent weeks, we've heard far more about Amazon's private label apparel, how it's teaming with Sears (SHLD) and its auto centers, and now furniture.

"A One Click Retail study found that the eCommerce retailer has more than tripled sales in that category since 2015. And, in 2017, furniture brought in approximately $4 billion, retail news source Chain Store Age reported."

What's the largest category? Mattresses. Not good news for Select Number  (SNBR) and Tempur Sealy International (TPX) .

As we gear into the final 90 minutes of market trading today, equities remain well in the red as trade and tariffs emanating primarily from China and the U.S weigh on investors. We've got 10 of the 11 S&P 500 sectors down, but most of the FAANG stocks -- Facebook FB , Apple (AAPL) , Amazon (AMZN) , and Google (GOOGL)  -- are up. Energy's the best sector today, and we're getting ready for the eventual and expected upped Disney (DIS) bid for Twenty-First Century Fox (FOXA) .

Checking in on the Stocks Under $10 portfolio, GSV Capital GSVC  is continuing to move higher as it rides the coat tails of Dropbox's (DBX) ongoing climb. Other positive movers in the portfolio include Habit Restaurants (HABT) , which is poised to benefit from a West to East geographic expansion, and Energy Recovery (ERII) .

Over at Trifecta Stocks, the portfolio is enjoying the moves higher in Apple and Amazon as well as United Rentals (URI) and Dycom Industries (DY) . The latter two are not exactly household names but ones that we like given the need to rebuild U.S. infrastructure and the pending buildout of 5G networks by the likes of AT&T (T) , Verizon (VZ) , T-Mobile USA (TMUS) and others.

GameStop (GME) shares are rallying today, a day ahead of its presentation at the Oppenheimer 18th Annual Consumer Growth Conference tomorrow. I continue to see many forces working against the company's business model, especially mobile and downloadable gaming that is, in my opinion, removing the need to visit a GameStop location. As I pointed out last week, this company looks like a short for those investors that have the risk tolerance.

It seems that Walmart (WMT) is not only looking to challenge Amazon (AMZN) in digital commerce, but it is also looking to leverage what I call Disruptive Technologies as well. In particular, I'm referring to blockchain, which to me is far more interesting than Bitcoin.

This morning, Walmart was awarded three patents for blockchain-backed technology, according to Cryptovest. That report also mentions that one of the patents covers a system that would let households manage their electricity bills through cryptocurrency and would be operated with a public blockchain. 

While I'm not involved in WMT shares, nor is the Trifecta Portfolio, I continue to watch the company as it continues to evolve its business model, embracing digital as it does so. We've long heard that companies changing their business models are a lot of like tanker ships trying to turn - it takes tremendous time, but as the turn continues it tends to pick up speed. It would appear that Walmart's change is starting to pick up pace.

For those fans of InterDigital (IDCC) and other IP licensing business models, these blockchain patents could give reason to revisit valuing WMT shares in the coming quarters.

Today's lone piece of economic data was the June reading for the National Association of Home Builders-Wells Fargo National and Regional Housing Market Index, which is designed to be a barometer of the single-family housing market. As we know, that market has been plagued by a combination of rising prices and low inventory, that in my view has led homebuilders such as Toll Brothers (TOL) , D.R. Horton (DHI) and others, to increasingly focus on the upper end of the housing market.

Per the latest NAHB-Wells Fargo findings, the index slipped to 68 in June from 70 in May as advances in the Northeast and West were offset by declines in the Midwest and South. I'd try not to read too much into the June index results given that thus far in 2018 the index has spanned a rather tight range of 68-72.

That said, all three components - Single Family Sales, Present; Single Family Sales, Next 6 months; and Traffic of Prospective Buyers all slipped month over month setting new lows for 2018 in the process. To me, this reflects the combination of higher mortgage rate prospects and properties being increasingly priced out of the range of the average consumer.

As we move through the summer, I'll be looking to see if homebuilders bring incentives back into the fold to attract buyers, but given rising commodity prices - lumber, steel, copper and the like - doing so may signal margin pressure ahead.

Shares of Universal Display (OLED) have been bopping and weaving the last several weeks, tied to what Apple (AAPL) may do with its upcoming slate of iPhones and organic light emitting diode displays. Last Friday it was reported Apple would favor LCD displays in its upcoming line up over organic light emitting diode displays.

That naturally pressured OLED shares, but this morning we're seeing more fallout as the Wall Street analyst community catches up to the news flow. Case in point:

"Rosenblatt analyst Jun Zhang still estimates a total of 110M iPhone units being produced in the second half of this year, but has raised his estimate for the LCD models to 75-80M units, up from 60M units, and lowered his OLED model estimate to 30-33M units."

Near-term, it's going to be a tough road for OLED shares as this latest news keeps them in the "show me" category of stocks. Why is Apple making the change? To help reign in the high price point of its iPhone X and entice the upgrade cycle from older iPhone models.

Expect to hear far more rumblings over the next batch of iPhones that will debut September/October as the summer months move past us.

My suggestion is do what we did over at Trifecta, step to the side with OLED shares and keep them in your Bullpen for later. More aggressive traders, may look to get a small short position in and odds are the company's June quarter results will include an outlook for the back half of the year that is lower than previously expected.

Be sure to read Sarge's Morning Recon where he talks about investors and traders keeping their helmets on this week, touching on trade concerns as well as the upcoming OPEC meeting and what it could mean for oil prices. 

We've also got several ratings downgrades that are worth mentioning:

- Intel (INTC) is moved to Under Perform from Market Perform at Northland Capital.

- Disney (DIS) is downgraded to Sell at Pivotal Research Group. My take on this Trifecta holding: While the stock has had a strong run of late, the real focus for me is the streaming services and what that can mean for the shares as investors re-think how to value the business. Netflix (NFLX) anyone?

- Zillow (ZG) was cut by Goldman to Neutral from Buy.

- Blackrock (BLK) was upgraded by Citigroup to Buy from Neutral.

- Chevron (CVX) was bumped up to Outperform from Market Perform by Raymond James.

Aside from trade reverberation headlines this morning, I'm seeing a number of pieces on the media M&A landscape, and refreshingly it's not all roses. Over at The Wall Street Journal, questions are being raised about the balance sheet impact on the likes of AT&T (T) as it looks to complete its bid for Time Warner (TWX) as well as what the one at Comcast (CMCSA) would resemble if it does swallow 21st Century Fox (FOXA) .

We've seen a lot of corporate debt issuance over the last several quarters, and while it may not need to refinanced this year or next it will need to be refinanced at some point, and as of now odds are those future rates will be higher. To me, this means to hit financial targets described as part of the M&A synergies we're likely to see greater cost cuts, price increases or both.

Don't get me wrong, I love the idea of being able to get video content, streaming or downloaded on the fly, but in my experience investors tend to focus on the revenue prospects and synergies, not so much on the cost, debt and bottom line dilution implications.

Something to mull over as these companies look to wrangle these deals over the finish line.

At the same time, I'm reading that Unilever (UL) is "is cutting ties with digital media 'influencers' that buy followers, saying it wants to help make advertising more transparent." This is likely to have some reverberations on Twitter (TWTR) and Instagram, which is owned by Facebook FB , and I'll be watching to see if more advertising friendly, consumer product companies follow Unilever's lead.

Good morning folks, as I fill in for Doug Kass today.

We've got a full week of housing data coming at us this week, as well as a number of Fed heads making the rounds following last week's FOMC decision.

Of course, trade and tariffs as well as their implications will be a main topic as well.

And lest I continue to be rude, it's me Chris Versace - thematic investor as well as co-portfolio manager for Trifecta Stocks and Stocks Under $10, who also contributes to Income Seeker as well as Real Money. I'm going to fill up my morning coffee cup, and I'll be back with you shortly.

Again, good morning and happy trading.

Though many believe that the markets recently broke out (led by the Nasdaq) -- I continue to respectfully disagree.
From my perch, we have recently hit the upper end of my projected trading range (2750-2800).
Adjusted for cash, the S&P (futures are down by 12 handles) Index is about 2760 this morning.

• The possibilities of policy errors (fiscal and monetary) are multiplying.
• The Global Citigroup Economic Surprise Index is weakening -- growth is becoming more ambiguous.
• Treasuries now yield more than the S&P dividend yield.
• The market is narrowing (see my repost of Bob Farrell's Ten Rules of Investing).
• Valuations of the median stock on the NYSE is already contracting.

I start the week in a medium-sized net short position -- having built up my S&P hedge on strength (and at higher prices) about 10-14 days ago.
My favorite asset class and largest commitment is in short-term Treasuries (of a six month or lower maturity).
Today, you will be in the very capable hands of Chris Versace, and I will be returning from my golfing sojourn tomorrow morning -- bright and early.
Here is a picture of me marshalling the second hole in back of golfer Jordan Spieth and another one with me and the U.S. Open trophy at Shinnecock over the weekend at the U.S. Open Golf Championship.

Good luck trading and investing.
And, hey, let's be careful out there!