There was a time, when as the frontman for an IPO, I would have had to stand there and take a sucker punch right in the nose, if supply caved in on the deal price. Apparently they do things differently in the modern era. Perhaps that's one reason why startups that might not need the dough actually decide that they don't need to pay the investment bankers.

Mixed Day

Although the action seemed muted, I think the fact that markets remained stable after a fairly significant bull run that began last week has to be considered in a positive light. The S&P 500, or the index that traders refer to in simplest terms as "the market," closed basically unchanged. The Dow Jones Industrial Average surrendered 0.3% as Walgreens Boots Alliance (WBA) acted as an anchor on "the blue chip index." The Nasdaq Composite closed up small, while the Russell 2000 closed down small. Volume was light.

Investors bought Treasuries off of Monday's weaker levels, thus suppressing yields. The three-month T-bill now gives up almost 5 basis points less than the 10-year note. In 2019 that's a good thing. The dollar bounced around as did the euro and the pound. Regardless, WTI Crude was relentless in moving higher. That, however, did not benefit the energy sector. The REITs seemed to be the strongest sector, the airlines the strongest industry.

Have a Good Evening

As always, I enjoy being granted the opportunity to play the role. I may not be Doug Kass, but to walk in the company of giants is enough for this kid. I hope you all have a nice evening, Our best buddy Chris (Not the Designer) Versace will play the role on Wednesday. Let's go Mets.

Missed the obvious buy signal at 2:20 p.m. ET while I was writing. Buying the short back while the position is still on the plus side. I don't really want the risk overnight. So, that's that.

So Microsoft (MSFT) is considering selling e-commerce tools of it's own. At least that's what was reported earlier today at The Information. This would be in direct competition with Shopify (SHOP) . What Shopify does is help new businesses with the intent to run an internet-based model as well as help older economy type businesses move to what is now referred to as multi-channel. Facebook FB is also said to be testing an e-commerce model as well. Now, the fact is, I would think if a heavyweight like Microsoft (market cap: $913 billion) moves in on Shopify's (market cap: $23 billion) turf that it stands likely that Shopify - even if it were to retain all current business - would see forward looking growth stunted.

How to play this developing story? I remain long Microsoft. You already know that I likes Amazon (AMZN) for their AWS business cloud product, and I already was on board MSFT for the Azure program. As for SHOP, maybe there is something there to take a look at too.

Microsoft appears technically overbought at least to some degree. That said, I like that the name has finally retaken the central trend line of my Pitchfork model. My target price for MSFT has been and remains $125. When and if the stock gets there, it very well may have come close to regaining the upper trend line, which would be huge. Basically, I'm not selling my cloud names unless something dramatic changes. Now for SHOP.

Now, chances are the name keeps moving...however, if there should be a significant selloff, not today's 2% move, but something more. Short interest is not out of control, so that won't stop a selloff short of where it should go, and where it should go according to our old friend Leonardo could be $174.

Trade idea:

- Purchase May 17th SHOP $200 puts (value: $12.05)

- Sell May 17th SHOP $190 puts (value: $8.15)

Why? The trade draws a net debit of $3.90 from your account. Shopify reports on May 14th. Max profit... Ten bucks minus that $3.90.. so $6.10. Worst case... the trader eats the $3.90 and ends up with no position in the equity.

British pound spiking. Euro on the rise. Dollar finally catching a breather midday on this "need for a short extension" announcement. Watch the currencies. You and I both know that the UK makes out better than the EU post break-up.

Stupidest Idea. Ever.

Driving 25K high paying jobs and a potential 100K ancillary jobs out of your neighborhood destroying what hope the people that elected you had at a better life? Nope. The DH Rule? Nope. Those are pretty good, but I think we have a new candidate. You're going to love this one.

Enter Senator Ron Wyden

The Democrat senator from Oregon would like you to pay tax every year on unrealized capital gains. Oh really? How nice? Currently, capital gains are taxed at a lower top rate (23.8%) than ordinary income or wages (37%) for good measure. The most glaringly obvious reason for this discount is to promote, or encourage investment. Makes sense. The investor is needed in the economy, and the investor assumes a certain level of risk. You don't risk finishing the day with less money when you showed up in the morning at your typical full-time job. Secondly, the lower tax rate exists in order to counteract the impact of inflation risk on any long-term holding. Would there be an allowance for inflation? Senator?

Now, the problem here is that Wyden is the top Democrat on the U.S. Senate's tax writing committee. He is going to impact thought development in this arena. So... Wyden wants to tax gains made on long term investments annually, rather than how the law is now constructed where one takes a profit or loss when they sell the underlying asset. What happens when the investor takes a capital loss you ask? Under Wyden's plan, losses could be deducted from gains as they are in the current law. Wyden also wants to tax capital gains at the same rate as the already mentioned ordinary income. Hmmm... there goes the ability to create one's own upward mobility on a personal level. Talk about keeping people down. 

What I Think

I think that this plan would obviously drive investment and financial planning down to standstill levels for obvious reasons. On top of the overt negative impact that this would have on the national standard of living, it would also likely destroy an industry.

Now, imagine paying income tax year after year on an asset that turns against you later on, and then taking a loss larger than any profit one might have to take the loss against at that time. I am certain that this past December, there were a ton of folks that had paper losses without gains to pair them off against. Now suddenly, that same investor who maybe bought the market closer to the top last October, would suddenly have sizable gains for 2019, even though the securities involved might still be trading below cost.

If I read this right, that's just your tough luck, kid. Hopefully someone with a better grasp of economic concept and the resultant possible human response comes along and helps this senator out. Hopefully. Perhaps this is simply an absurd starting point in a completely unrelated negotiation meant to draw a concession elsewhere. Hopefully.

Two items are forcing the marketplace to take note as the morning unfolds.

One, We already know that the Trump administration has long opposed the Affordable Care Act. The president has at least been smart enough to insinuate that the GOP not take this on until after the next general election. Obviously this, for me as an investor, makes the healthcare space tough to put capital into. Not just the likely pressure that it puts on the hospitals, and the providers, but also the increased uncertainty as the last time the GOP gave this a whirl, they appeared wholly unprepared to adequately replace the law in its current form. Then there is the war on drug pricing that seems to be a cause embraced on both sides of the aisle.

I really am not at all sure about how I feel about what is left of Obamacare. I mean I have seen poor people get what they needed. I have also seen the quickly rising premiums put middle class folks in the position of choosing healthcare coverage or paying monthly bills, but not both.

Political footballs are never easy in the investing public. United Healthcare (UNH) remains the only name in the space where I am long equity after taking profits across the pharma space in February and early March.

Second is the friction on the border with Mexico. Should this put ratification of the USMCA in jeopardy. The deal is needed to normalize trade in North America, while setting up trade deals across other markets. Potential exists as well for other nations such as the U.K. to be included, if that nation can ever get their Brexit act together. There's a reason they dropped the "NA" from this version of NAFTA.

Most of you likely noticed the overnight run for Bitcoin. According to Coindesk, that run amounted to 16% overnight, landing the crypto-currency above $4,700, a level that Bitcoin has managed to hold all morning. In case you missed it, Bitcoin actually kissed the $5,000 level in the middle of the night in Luxembourg.

What gives? Lack of liquidity? Fat finger? Large investor? The move does come as some surprise given the apparent lack of volatility in these markets over several months. Interestingly, other crypto-currencies moved on the surge in Bitcoin as well. Both Ether and Ripple have moved in unison, and have also held onto overnight gains as well. the market cap of all cryptos in aggregate has increased by a rough $15 billion since Monday night.

Is This For Real?

The level for most of the crypto-crowd, of which I have never been one, is roughly $4,200 for those who trade this digital commodity. Experience tells me that to move forward there would need to be a re-test. Then again, depending on shorts behavior, the move could be exacerbated to levels not seen in quite some time.

My Feeling?

I do think that there is a place for some kind of international, digital reserve currency, especially in places where the local currency is virtually useless. That said, whatever does evolve will be controlled and regulated by the central banks that already run the monetary/reserve currency system. My feeling is that what's next will likely be a descendant of the IMF's Special Drawing Rights. Currently, one Special Drawing Right is worth about 1.39 in U.S. dollars.

As for Bitcoin, I see this commodity decreasing further in value as the central banks take control of this market. The bitter end is probably a value of less than $1K. Just my opinion. Buy gold if you want to own an alternative currency.

Question. What is more central to economic growth than Durable Goods Orders? Answer. Not much. This morning the Census Bureau released their data on February Durable Goods. The numbers are not stellar. Granted, they were not expected to be, but still... this reports is as welcome as a splash of cold water on the face about 30 seconds after drifting off to sleep.

At the headline, Durable Goods printed at -1.6% month over month. I see various numbers for consensus. I was at -1.3%, so the number was worse than my expectation. The all-important print for Core Capital Goods (non defense, non transportation), a proxy for business investment, hit the tape at -0.1% m/m, lower than the +0.2% that the industry had been looking for. Even more alarming, once the military is removed from the equation, though government spending is certainly a component of GDP, it certainly rings as growth that is less organic in nature than do core purchases. By the way, perhaps the most atrocious of all line items within this report was that ex-defense print. The number crossed at -1.9% versus an expectation that was somehow positive.

The treacherous path lower was indeed led down by orders for machinery, computers and electronic products. FYI, Boeing (BA) is reporting on their website that the firm only saw five incoming orders for aircraft in February. That's down from a print of 46 in January.

Another show of weakness here was in shipments which were unchanged from the month prior. Now, we wait on Atlanta to see what the impact on Q1 GDP is in real-time, as in my opinion the Atlanta Fed has become much better at modeling economic growth in recent years/months.

Shorting a little Boeing (BA) between $389 and the 50 day SMA (if I'm lucky) in pre-opening trade. Yeah, I see it as a pivot. That said, I also see the sharp, recent rise. I see the FAA's need for more time so work can be done on the firm's software revision meant to clear the 737 Max aircraft for flight. I also see more turbine engine issues for Rolls Royce which impacts the 787.

Obviously, the name is volatile, and dangerous. The trick here is to keep the size small. Large enough to take the bride out to a nice restaurant. Small enough so that losing a coupe of bucks doesn't ruin your day/week.

Your old pal, Sarge steps to the plate today to take a few swings and to try to fill shoes that cannot be filled. That said, however... we're still going to tape on the foil. We're still going to button our chinstraps, and we're still going to play the game.

As I have been writing in my Market Recon morning note over the past several hours, equity index futures have largely recovered from overnight lows. WTI Crude is now trading above $62 as visions of domestic growth now cloud out thoughts related to earnings growth. Even a stronger greenback has not slowed the trajectory for crude this morning.

That said, you might have noticed the trainwreck that is Walgreen's Boots Alliance (WBA) . This morning, that firm swung and missed on both EPS and revenue for the fiscal second quarter. The biggest miss however was in the guidance. Yikes. For the full fiscal year the firm now guides EPS growth toward a flat print in constant currency. That's down from prior guidance of 7% to 12%. Might want to sidestep that one.

So... let's get some more coffee. Let's do our push-ups. Let's say out prayers. (these are optional) Then, let us rock.