Whitney Tilson's Daily is a must read.

Here is this afternoon's edition: Doug Kass and I are still bullish on bank stocks; Berkshire Hathaway's stock moves in the third quarter

Thanks for reading my Diary today - I hope it helped you in your trading and investing decisions.

Enjoy the evening.

Be safe.

I have moved my Hilton (HLT) and Hyatt (H) shorts to large-sized.

I am already in preparation of my 15 Surprises for 2021.

I am going to give you the last surprise in advance! 

Surprise #15Within one week after President-Elect Biden's inauguration, Twitter (TWTR) suspends former President Donald Trump's Twitter account for tweeting false claims about the "stolen" Presidential Election. On the Twitter suspension announcement, Twitter's shares fall by over -$5/share (or by about -10%) in one day.

One of the factors that got me more bearish yesterday was the continued strength in bond prices, and lower yields. 

To me, a strengthening and healthy equity market should be coupled with a weakening bond market, and higher yields. 

That wasn't the case on Monday and continues not to be the case today.

Update - 1:50 p.m.

In this morning's comments we said this felt like it might be a consolidation day and, after the Dow and several other indices closed at record highs, the action certainly looks like they are consolidating those gains, in particular, trying to work off some of the overbought condition that resulted.

We think, barring any new surprises, we will chalk it up as a general consolidation.

Stay safe.

Arthur

* And banks may be the beneficiary

Thus far, banks have a better look today.

The sector resisted breaking down - earlier in the morning - from recent gains and are trading at the day's highs.

__________ 

Long BAC (large), WFC (large), JPM (large), C (large), GS (small), MS (small).

XLF (large) - "Trade of the Week".

Yesterday I took a trading short rental in two hotel plays - Hyatt (H) and Hilton (HLT) : 

Nov 16, 2020 ' 11:05 AM EST DOUG KASS

Hotel California... Not Such a Lovely Place?

"There she stood in the doorway
I heard the mission bell
And I was thinkin' to myself
'This could be heaven or this could be hell
Then she lit up a candle
And she showed me the way
There were voices down the corridor
I thought I heard them say..."

- The Eagles, Hotel California

I am taking small short rentals in (H) ($71.09) and (HLT) ($109.30).

The shares are weaker today ($70 and $104) - but I am not covering the short as I believe they may have much more to the downside.

* Disappointing retail sales

* Strong housing data

Core retail sales in October rose just +0.1% month over month, below the estimate of up +0.5%, and September was revised down by five tenths to a gain of +0.9%. Auto's/parts, electronics, building materials and online retailing all rose month over month but was mostly offset by declines in furniture, food/beverage, health/personal care, clothing, sporting goods, department stores, misc. stores (like pet food or convenience stores), and restaurants/bars. 

In order to measure the pandemic vs. the pre-pandemic world, it's best to look at the year over year numbers, and here we have auto's/parts up (the geographic shift along with cheap financing), furniture up (strength in housing market), building materials up (DIY and fixer up), food/beverage (eat at home), health/personal care (stock up), sporting goods (get outdoors and be active), and online retailing (obvious). On the downside, electronics (we pulled forward a lot since March), gas stations (less driving), clothing (back to school was a bust), department stores (melting ice cubes), and restaurant/bars (obvious). 

Hugely generous transfer payments that more than offset the lost wages and income along with more job hiring's helped to maintain a level of retail buying on goods (less on services) that far exceeded expectations when thinking about the Covid world we're in. But, we also know that since August the added unemployment benefits ended and while jobs continue to come back, the pace was moderated after the initial rush back. And, with selective shutdowns and rampant Covid spread we know many will be back indoors in the coming months. 

A key in 2021 will be how much on the goods side saw a pull forward in 2020 and what is more sustainable. I'll say this as an example, people are not buying new laptops in 2021 to nearly the same extent after the rush to buy in 2020. The same can be said about many things bought for one's home this year. 

Here is a six year chart on core retail sales (mostly capturing goods and much less on services):

The November NAHB homebuilder survey jumped another five points to 90 from 85 in October and above the estimate of 85. Keep in mind that 50 is the breakeven and ranges between 0-100. Therefore it can't go much higher from the current record high. (I have sold "at the sound of trumpets" - I am short homebuilders as the seeds to a downturn are sown as affordability weakens from higher home prices and rising mortgage rates). 

Almost all of the gain was in the Present Situation which rose six points to 96 while the Future Outlook was up one point to 89. Prospective Buyers Traffic was up by three points to 77. 

The NAHB said what we know: "Historically low mortgage rates, favorable demographics and an ongoing suburban shift for home buyer preferences have spurred demand and increased new home sales by nearly 17% in 2020 on a y/o/y basis." They also included these caveats that we are also aware of: "Though builders continue to sign sales contracts at a solid pace, lot and material availability is holding back some building activity. Looking ahead to next year, regulatory policy risk will be a key concern given these supply side constraints." 

I'll add that pricing will also matter, particularly on the lower end of the spectrum that typically attracts the first time home buyer. Persistent price increases for those that aren't flush and are young families creates a hurdle to buy that first home notwithstanding the help of low mortgage rates. We'll also be watching, of course, the direction of rates in 2021 as the economy improves with the vaccine help. To my point, the NAHB also added: "Affordability remains an ongoing concern, as construction costs continue to rise and interest rates are expected to move higher as more positive news emerges on the coronavirus vaccine front."

Here is a 20 year chart on NAHB builder sentiment:

My pal Peter talks the U.S. dollar - those interested in gold should read this! 

We talk a lot about the euro heavy dollar index (euro is about half the index) when measuring the direction of the US dollar, which today is a hair away from the weakest level since April 2018. But, there has also been clear dollar weakness specifically against Asian currencies where today the Bloomberg JPMorgan Asia Dollar Index is rising (stronger Asian currencies) to the highest level since June 2018. The better containment of the virus, less of an economic contraction and thus a quicker rebound all are catalysts for this strength.

Asia Dollar Index



DXY

I expect further weakness in the coming year and continued strength in precious metals and which would be a boost to other commodities. The CRB Food index yesterday closed at a 15 month high and the CRB raw industrials index closed at an 18 month high. The only commodity missing from the rally has been crude and the vaccine will end that underperformance. I continue to like the group.

Speaking of the dollar again, against the pound it is falling to near $1.33 as it seems the UK is moving ever closer to a deal with the EU. Once signed I expect further strength in the pound. Remember, it was near $1.50 right before the 2016 vote. The Irish Foreign Minister yesterday said a deal could be had within two weeks but there is hope that there could be one even next week.

British Pound

Singapore's October non-oil exports fell 5.3% m/o/m and 3.1% y/o/y, below the estimate of up 2.7% and 5.1% respectively. We can blame a slowdown in electronics but that comes after a solid few months and is likely due to a slowdown in semi shipments to Huawei. Pharma remained a consistent contributor to exports but did see slower growth. Petrochemical exports slid too. Exports to China rose 5.3% y/o/y after a .1% drop in September. To the US, they rose 13.2% y/o/y. Notwithstanding the miss, the Singapore Straits was up by 1.1% but is still down 13.8% year to date. That market is still cheap and yields 3.9%.

From me:

(Monday's comments and update appear at the end.)

The bulls followed-up on the vaccine celebration with a little bit of a spike into the close but it was not enough apparently to panic the shorts and, we ended with a mild technical overbought. That may be part of the reason for the pullback that we are seeing overnight.

No new news and the political picture remains murky as they talk of assumed outgoing President Trump going to make some key moves before leaving, if he leaves office.

Part of the minor overnight pullback may also be the result of some speculation that we may be in a race between vaccine availability and the Covid surge cresting.

Some speculate that if the Covid surge grows too large, it can put us behind a kind of eight ball that will limit the initial efficacy of the vaccine on the economy. In essence, will the GDP fall in the first quarter and by how much? Will that postpone the "reopening celebration" that traders had initially hoped the vaccine would bring?

The difficulty is that the balance between vaccine availability and further Covid outbreaks is not clearly measurable and, unfortunately, we may only learn of its economic impact when the numbers begin to come out. It is a concern but, as I say not measurable and, therefore, not easy to fit into your trading pattern.

Barring any new news on either vaccines or the political front, today looks somewhat like a consolidation day. As we noted, we are mildly overbought and, we will be looking at the further testimony from the social tech stocks and, Powell will be making comments, although not a major address later in the day. Some look to see if he will talk about increasing the size or frequency of their purchases.

So, overall, we will look for a little pushmi-pullyu and, a somewhat heightened sensitivity to the newsticker.

Stay safe.

Arthur

__________

Overnight, futures got a major boost as the vaccine news from Moderna began to leak out. Once again, it appears to have a high efficacy rating of 90% or higher. But this vaccine can be stored at reasonably normal temperatures in a kitchen refrigerator or the like for up to 30 days, which makes transfer and shipping much easier. There are other features in the vaccine report, including some hint that it can be modified to treat or control, to some degree, the disease once it has begun. That can be a big deal. All this is only in the preliminary stage, but we will keep an eye on it. That is why as dawn hit New York, the Dow futures rallied 500 points or so. A level which could take them to 30,000 all things being equal.

Prior to the vaccine news the futures were looking a little bit better. That is because the weekend talk shows raised the possibility of a lame duck stimulus package and, several pointed to the President's recent tweets, which are somewhat modified. While still claiming the vote was rigged, there is a mild concessionary tone that the Biden team won, although, they "stole the election". The mere fact of saying they won hints we may get a traditional orderly transfer of power and, that helped put a bid under the markets.

As you may recall, traders have been concerned that they could not tell whether we were building a rectangular resistance band trading around the early September highs or consolidating and preparing for a breakout to brand new highs. This morning's action and some of the late action last week suggests that the bulls may have the ball and may be ready to run with it.

The key will be can they hold the early gains and build on them.

Stay safe.

Arthur

I admire Susan Berge's technical work as I admired her dad's. 

Susan has turned bearish:

badgolfer22

btw, saw that BKHT sold 40pct of their GOLD they had acquired the quarter before..guess warren or his minions aren't new believer gold bugs after all. makes no difference to me..I own GOLD irrespective of mr. buffet's position. didn't care when he didn't own it, don't care that he sold it.

dougie kass badgolfer22

Here was my quote in my Diary:
"Berkshire also purchased nearly $600 million in Barrick Gold Corp. (GOLD) . Gold bugs will regal in this move but I see it as hardly noteworthy. The small size of the investment, thus far, is meaningless to Berkshire, and the $600 million holding suggests that either Ted or Todd, and not Warren, initiated the buy."
Dougie

dougie kass badgolfer22

As you know - as I wrote - I believed the hyprerbolic and bullish response to Tedd or Todd's purchase was unjustified and did not represent a change in Warren's view of gold - as many in FIN media contested.
Dougie

Dennis Gartman responded (via email) to my opener, "Group Stink" Is Forming A Convoy": 

The ratio of insider sales to purchases hit 58:1 last week! Anything over 40:1 is ridiculous; the market is vulnerable here after an amazing run to the upside.

- Dennis Gartman, The Gartman Letter, L.C.

FIN TV's optimism after yesterday's large market gain was on display last evening. 

Ever self confident, especially from the "unusual call" buyers, it was taken for granted that we move higher in the days ahead. 

Pencil meet eraser.

* "Stop trying to make fetch happen!"
* The investment mosaic is so much more complex than some pretend it is
* Investing in reaction to headlines, like the vaccine news yesterday, is "first level thinking"
* Revelations occur when the market tide goes out, as it did in February- March and, perhaps, as the market tide recently has rolled in
* Simple answers to a complicated market patchwork should not be satisfactory and acceptable anymore
* Nor should we be responsive to the self confident of view in a world of rising uncertainties
* Increasingly, price is no longer "truth" - consider the disproportionate role and the massive intervention of the Fed as well as the dominance of Passive Investing
* Avoid skating the surface, dig deeper and stay away from the foul odor of "Group Stink"
* "Price has a way of changing sentiment" (h/t Divine Ms M)
* Political paralysis may weigh on the markets if the Georgia Senate seat/s go Republican - but so could the markets suffer if the Democratic party wins in Georgia
* Michael Wilson's (Morgan Stanley) ambitious S&P EPS forecasts for 2021 seems to set too high of an expectation bar 
* I start the day with a medium net short market exposure

"Gretchen, stop trying to make fetch happen. It's not going to happen."
- Mean Girls

"Investment wisdom is always 20/20 when viewed in a rear view mirror."
- Warren Buffett 

In no way do I have a concession on the investment truth as there are many ways to beat Mr. Market, both technically and fundamentally. 

But, I have a view towards my version of the truth that I communicate daily in my Diary. 

Bold, dispassionate, contra (short term trend) positioning have delivered very good results at most of the big inflection points since late 2018. 

By contrast, often the most obvious trading and investing moves, adopted by the crowd, can be deleterious to investment performance. I have called this behavior, "Group Stink" or, as Howard Marks may call it, "first level thinking."

In some ways the S&P today, standing above 3600, stands at the polar opposite to the third week of March, 2020 when the S&P was at 2200, more than 1400 S&P points lower. Back in March my market optimism was based on my confidence in the scientific and medical communities' ability to innovate and deliver therapeutic and vaccine antidotes to Covid-19, a cooperating Federal Reserve, and the near unprecedented bearish investor sentiment that coincided with the spread of the virus. With the great vaccine news over the last week, investor sentiment has gotten "bulled up" as price has a wonderful way of changing market outlooks - while our Central Bank continues its monetary largesse. 

Low stock prices are the ally of the rational buyer while high stock prices are the enemy of the rational buyer. 

At 2200, the S&P Index was at the largest percentage discount to my "fair market value" (3000-3100) eight months ago in years. Today, at over 3600, it is approaching the largest premium to my "fair market value" in years. 

Thus, in an extraordinary swift period of time, we have moved from substantial undervaluation to meaningful overvaluation. 

The Political Backdrop May Prove Market Unfriendly

* Heads investors lose, tails investors lose?

Despite the Biden election victory, there remains a great deal of political uncertainty. 

Should the Republicans maintain control of the Senate, a divided house and political paralysis may weigh on the markets. Under this circumstance, an aggressive stimulus bill would be unlikely, especially as we move closer to the delivery of Pfizer's (PFE) Covid-19 vaccine. 

On the other hand, should the Democrats win both Georgia Senate seats, this, too, could weigh on the markets as investors might anticipate higher taxes and other anti-business legislation. 

A Review of My Outlook

Here are three recent missives that describe my contrarian point of investing view - and the need for "second level thinking": 

1. Classic Sell on The News?

* Was it a classic sell on the news? It might have been!

* My actions today were as extreme - going from large net long in exposure to small net short - as in any one trading session in several years

* More on "Group Stink"

The comfort of the crowd, herd and consensus, as I noted in this morning's opening missive,"The Rip Your Face Apart Rally and Mother of All Short Squeezes Will Likely Continue -- 'Get It While You Can'" often produces the foul odor of "Group Stink."

"It takes nothing to join the crowd. It takes everything to stand alone, and to buy when others are selling, and sell when others are buying."

I was struck by the near unanimity on FIN TV -- with the Dow exploding by over 1,600 points this morning -- that the market now has a "green light" to head higher.

I didn't hear one skeptic or naysayer all day, as traders and investors were intoxicated by the remarkable response to the vaccine.

Spyders (SPY) traded -$10/share from the day's morning high and closed the day only +$4.40 higher while the Invesco QQQs (QQQ) were -$11 off of the earlier high and closed -$6 from Friday's close.

I have often written that one must trade unemotionally -- and today was a very good example of that credo.

There are a number of other important market tenets that have guided me over the years. One of the most important ones is:

"Bull Markets are borne out of bad news and Bear Markets are borne out of good news."

Equities bottomed in the third week of March, when fear of Covid-19 was at the extreme and businesses closed down.

By contrast, stocks may have have made a 2020 top coincident with the great vaccine news announced early this morning.

For the first time in a long while the S&P (at this morning's height) traded at a near 20% premium to my calculus of "fair market value (3000-3100)."

Now, at the very least, it may be the time for corporate profits to grow into the nearly unprecedented rise in prices and valuation since the March lows 1350 S&P handles ago.

1. It May Be Time to Be a Contrarian Again... And Sell/Short on Favorable Moderna Vaccine Efficacy:

* Buy the rumor (S&P futures +42 handles), sell the news?

* Look for Ss (S and P) over Ns (Nasdaq) as Moderna's great vaccine news will hasten the pivot from growth to value

* Look to value investments - banks (my favorite group) and other beneficiaries - and away from large, high tech growth over the remainder of 2020 and for 2021

* The post-pandemic world will have added trillions of dollars of debt just to get back to the status quo

Throughout 2020 it has paid to dispassionately sell/short extreme strength and buy extreme weakness.

Now may be another time for the later.

Stock futures are ripping on Moderna's (MRNA) strong results:

Many will view this news as uber bullish - with the prospects for defeating the virus now at hand.

From my perch the time to buy equities was back in March, 2020, when confidence in innovation made by the scientific and health was low.

Now, with confidence high and valuations and prices lifted (S&P futures were recently +42), Nasdaq futures are muted, as many of the components of that Index will be actually be "hurt by the news" as Covid-19 pulled forward much in the way of sales and profits.

Now, the pivot from growth to value can intensify.

In support of shorting now, it is important to recognize that the damage has been done to small businesses as well as a number of larger businesses that have taken on huge amounts of debt to traverse the pre vaccine terrain.

Most will not receive the vaccine until late in the first quarter of next year and our normal routines will not return until the first half of 2022.

Both Pfizer's (PFE) and Moderna's vaccine (two shots, four weeks apart) will produce only a limited impact (relative to consensus expectations in 2021) and will only pull forward expectations by about eight weeks.

Two months ago only about 25k Americans have been diagnosed daily with Covid-19. By contrast, over 160k cases were confirmed on Saturday. Though morbidity is less than April, daily deaths are now in-line with the spike during the summer months. Over the next three months lockdowns will likely be imposed, schools closed, quarantines will escalate and public and private gatherings are likely to be limited, etc.

Despite the grave consequences of the virus, bullish investor exuberance has been rising in anticipation of a a therapeutic and vaccine resolution - and could peak with the Moderna news.

And so could the pivot from growth to value be hastened now as investors begin to worry about how much in sales and profits have been pushed forward since early 2020.

My favorite group, banks, could finally break out to the upside from the recent trading range.

Bottom Line

My contention is that, even with the recent vaccine announcements, consensus S&P EPS forecasts for next year of $170/share are far too high. (Yesterday I heard Morgan Stanley's strategist talk about $183/share yesterday afternoon on CNBC. No way!)

And, as we move into the next few years, the mountain of private and public debt will serve as a governor to domestic and global growth and to corporate profits - producing a lengthy period of sub par growth in the economy and in the markets. The post-pandemic world will have added trillions of dollar of debt just to get back to status quo.

The market is ignoring this and is not taking into account the anti-growth effects of the debt or the damage incurred by so many businesses and long-term changes in consumer and business behavior - especially where there is a strong case for higher interest rates and rising inflation and inflationary expectations.

    3. Mean Girls: 

"In the 2004 cult movie Mean Girls, Regina George tells Gretchen "to stop trying to make fetch happen" (hoping to make it the new - it word). The quote has achieved its own popularity as a means of mocking the out-of-touch." While "fetch" started as a joke in the movie, it has caught on off-screen in many memes using the phrasal template, "Stop trying to make X happen? It's not going to happen" - as in, "Stop trying to make Google Plus happen? Its not going to happen." (The word's actual meaning is supposed to be 'nice', 'fresh', 'desirable,' or 'cool'. It is most likely a shortened version of the word "fetching," a now less-common term for attractive.)

That's my entertaining way of explaining that the investment mosaic is complex - self confident, trivial and non rigorous explanations to a complicated investment backdrop no longer work for me and shouldn't for all of you. Like the word "fetch", or what happened to Amelia Earhart and even what the heck is on top of President Trump's head -- the answers are not as simple as many "talking heads" suggest when they are asked about the market's or individual equities' daily price action.

Moreover, observations and interpretation of price action is now deeply complicated by Covid-19 and its economic (and market) ramifications.

"Price Has A Way Of Changing Sentiment" (h/t The Divine Ms M)

I remain critical of "first level thinkers" who fail to question (what is "underneath" the surface of) the price action and are not forward thinking and who, routinely, change their views and worship almost entirely at the altar of price momentum.

Importantly, the perversion of prices and price discovery in the evolving change in market structure also complicates the picture.

Price Is Not Truth

As I concluded yesterday's Diary commentary with "Buyers Live Higher and Sellers Live Lower," there is less than meets the eye in this market. Just like the Fed and Treasury, who is backstopping almost every known credit, there is so much artificiality which dulls artificial price discovery in equities. We must be aware in order to capitalize in our trading and investing:

* Price distortion and absence of price discovery are a continuing 2020 theme -- both in up and down markets
* Expect even more volatility and perversion of price discovery ahead

A constant refrain of mine in my Diary has been that "buyers live higher and sellers live lower." To be sure, the last five weeks (and especially today) are a demonstration that the evolving market structure (and dominance of ETFs and risk parity) in which passive products and strategies worship at the altar of price momentum distort price by chasing stock prices (up and down). Just as the panic that went viral in mid-March created a buying opportunity, a selling opportunity could lie close at hand -- as the machines and algos continue to pervert natural price discovery.

"On Wednesdays we wear pink!"
- Karen Smith, Mean Girls

It's Wednesday.

On Wednesday and on most other days, there is a tendency for commentators, strategists and others to believe "price is truth" - and to respond accordingly in our trading and investing.

If one is consumed by price it is imperative to recognize the potential pitfalls to that approach - and the artificial influences of that price action.

But to me, this is a failing - more so today than ever, and certainly when the market's are less friendly - as passive products and strategies are the tail that wags the market's dog.

With the spread of Covid-19, the investment mosaic has grown even more complicated in the last several months.

Always question the legitimacy of short term price action, stay independent in view and avoid the self confident and "Group Stink."

Above all, as Regina George exclaimed to Gretchen in Mean Girls, "stop trying to make fetch happen."

Bottom Line

Fear and greed ebb and flow.

Fear, prevalent in March, has been replaced with greed in November.

Be opportunistic but patient as you wait for the right pitch, stay independent in view, avoid the crowds and remember, above all else, Mr. Market is a discounting mechanism.

The news that appears in a headline in front of you may have already been discounted.

Trading gains can typically be made by following a trend, but much wealth is created by taking unpopular investment positions when both uncertainty and certainty may be high.

The S&P, according to my calculus, is substantially overvalued at over 3600, against my "fair market value" of 3000-3100.

Thought the vaccine news is wonderful, I expected it, helping to explain my March, 2020 bullishness, and the market has arguably discounted the news.

Yesterday afternoon on CNBC, Morgan Stanley's strategist, Mike Wilson, talked about the potential for a $183/share S&P 2021 EPS (David Kostin is at $170/share and I am at $150-155/share). Mike's forecast may be "pie in the sky." To me, there is a reduced probability that the ambitious consensus economic and income forecasts will be realized next year. Indeed, the short term domestic economic outlook is deteriorating and is looking fundamentally problematic as a divided government and the proximity of the vaccine's delivery/distribution could mean a lesser stimulus bill than I initially expected. Moreover, lockdowns are looking more likely, reflecting the continued and accelerated spread of Covid-19.

Indeed, the way things are going, and as the rate of growth in Covid cases accelerate, the real domestic economy will be very weak over the near term - as 1Q2021 Real GDP could actually be a negative print!

As we look out beyond this year and into 2021-22, profit and economic expectations seem too optimistic as a number of small and large businesses have been gutted by Covid-19. The amount of private and public debt that has accumulated over the last year (and 10 years!) will serve as a governor to growth at a time in which the Federal Reserve has little ammunition left and is "pushing on a string." Indeed, 2021 may mark a reversal of aggressive monetary easing which has been the straw that has stirred the market's drink.

Finally, always remember, price is what you pay but value is what you get.

Constantly measure the changing market dynamic of upside reward vs. downside risk.

I do.

S&P futures are now down by -25 handles. 

Remember the self confidence and unanimity of bullish sentiment expressed in the financial media after the close of trading yesterday? 

Well, that bullish market commentary maybe should have been written in invisible ink!

Staying on the Walmart (WMT) theme, here's a good review of the EPS report.

I continue to reduce Walmart (WMT) in the pre-market gap higher.

From the Walmart EPS release, more analysis later: 

Quarterly Highlights

• Launched Walmart +, a new membership offering with the initial list of benefits of unlimited free delivery, Scan & Go checkout in stores and discounts on fuel
• Announced a reinvented Black Friday shopping experience called "Black Friday Deals for Days"
• Hosted first-ever virtual Open Call Event for U.S.-manufactured products, as 175 small businesses found an opportunity with Walmart
• Announced new drone delivery pilots in the U.S. with Zipline, Flytrex and DroneUp

• Announced a pilot with Cruise, an all-electric self-driving car company, to test grocery delivery
• Launched Walmart Insurance Services, LLC, a licensed insurance brokerage, which will assist people with enrolling in insurance plans
• Opened three new Walmart Health Centers in Newnan, GA, Cartersville, GA and McDonough, GA
• Launched Free Assembly, a modern fashion brand for women and men, found exclusively at Walmart

• Launched Eloquii Elements, a new private brand of everyday fashion for women
• Announced initial rollout of a new store design in the U.S. focused on a digitally-enabled shopping experience
• Launched a team-based operating model in U.S. supercenters to better serve customers and provide associates with more room for career and pay growth
• Partnered with Goldman Sachs to offer online marketplace sellers access to capital

• Announced the agreement to sell Asda, Walmart's subsidiary in the U.K., to the Issa brothers and TDR Capital
• Announced the sale of the company's business in Argentina to Grupo de Narvaez
• Announced the agreement to sell a majority interest in Seiyu, Walmart's subsidiary in Japan, to KKR and Rakuten
• Announced additional investment in Ninjacart, India's innovative startup for supply chain and technology solutions

• Announced strategic partnership with Flipkart and Aditya Birla Fashion and Retail to enhance the consumer fashion experience in India
• Announced the acquisition of the intellectual property of mobile gaming startup, Mech Mocha, by Flipkart
• Launched first self-checkout stations for Sam's Club in Mexico
• Announced collaboration with Sam's Club and 98point6, a virtual primary care provider, for exclusive telehealth offerings via text-based app

• Announced partnership with Door Dash to deliver prescriptions from Sam's Club pharmacies
• Announced expansion of Scan & Go to all Sam's Club U.S. fuel stations
• Announced ambitious goals targeting zero emissions in Walmart operations by 2040, including harvesting enough wind, solar and other energy sources to power the company's own facilities with 100% renewable energy by 2035
• Named as one of this year's Forbes JUST 100, a list of companies that strive to benefit all of its stakeholders

Consistent with my comments yesterday, I am making more sales of Walmart  (WMT) above $155 after the expected EPS and sales beats announced earlier.

Got gold?

I agree.
I have made several profitable short trades in Tesla (TSLA) in 2020 -- I plan to re-enter this short, shortly:

Danielle DiMartino Booth on the trajectory of the not so great domestic growth outlook:

• At 6.3, November's headline in the NY Fed's Empire State Manufacturing Survey fell to a three-month low and underwhelmed; gains since July had helped lower the consensus U.S. recession probability to 30%, but uncertainty about the recovery's persistence remains high
• Since 2001, the Empire Future Capex Index has had a 0.62 correlation with the quarterly growth of real nonresidential investment; this is much higher than the 0.38 had by Future Inventories and the New Orders-Inventories Spread, alternate guides for investment activity
• Future Inventories point to upside risk for U.S. capital expenditures in Q4, but Future Capex remains sluggish; the dispersion in the Empire Manufacturing Survey's business activity metrics speak to the current uncertainty, with the speed of a vaccine rollout the key unknown

In the 1800s, rising political instability, economic distress, and religious persecution plagued Europe, fueling the largest mass human migration in the history of the world. Around 1890, it became apparent that Castle Garden, the New York State immigration station at the time, was ill-equipped and unprepared to handle the mass influx, pressing the Federal government to construct a new station. On January 1, 1892, the new structure on Ellis Island began receiving arriving immigrants. Accompanied by her two younger brothers, Annie Moore, a teenage girl fleeing Ireland, made history as the very first immigrant to be processed. Over the next 62 years, more than 12 million immigrants would arrive in the United States via Ellis Island.

Today, Ellis Island is a poetic symbol of the American Dream. But for QI, it holds a truly special place. Two sets of Danielle's great-grandparents and all four pairs of Dr. Gates's great-grandparents entered America there. New York was their gateway into a new life in a new world.

New York also is first up each month to report on U.S. regional manufacturing activity. The Empire State Manufacturing Survey, conducted by the Federal Reserve Bank of New York, is dispatched on the first day of each month to the same pool of about 200 manufacturing executives in New York State, typically the president or chief executive officer (CEO). About 100 responses are received. Most are completed by the tenth, although surveys are accepted until the fifteenth. Respondents come from a wide range of industries from across New York State. No one industry dominates the respondent pool. At 6.3, November's headline slipped to a three-month low and missed expectations.

Investors default to manufacturing surveys when taking the pulse of the economic outlook. These soft data metrics not only come first in the reporting sequence each month, manufacturing is more cyclical than services and tends to be a more accurate guide of the variability of growth rates quarter in and quarter out.

The COVID-19 shock produced the most acute decline in the two-decade history of the Empire Manufacturing Survey. From March to May, on a zero breakeven scale, the headline General Business Conditions index averaged -49.4, worse than any three-month stretch during the Great Recession of 2007-2009. In June, the headline number stabilized (at -0.2), and from July to November registered uninterrupted expansion. The sustained improvement was one factor that helped bring down the consensus U.S. recession probability from 100% in July and August to 50% in September to 30% in October and November.

Don't get us wrong - 30% recession probability is good news. But it's still twice the median likelihood of 15% since Bloomberg began tallying expectations in 2012. With the COVID resurgence staring the U.S. in the face, uncertainty about the persistence of the recovery is high and risk of a backslide remains a front burner issue.

Turn back the clock with us 18 years to a concise comment delivered by then Fed Chair Alan Greenspan during his February 2002 semiannual monetary policy report to the Congress: "...the broad contours of the present cycle have been, and will continue to be, driven by the evolution of corporate profits and capital investment." The Empire Survey does not inform about profits, but it regularly provides forward guidance on the capex front.

The Empire Future Capex index is a direct gauge for real nonresidential fixed investment, the capital investment line item in gross domestic product (GDP). Survey recipients are queried about capital expenditures increasing, decreasing or staying the same over the next six months. For a more complete analysis, we added two other guides for business investment activity - Empire Future Inventories and the New Orders-Inventories spread, useful guides that help inform the capex outlook.

Over the entire timeframe depicted above, Future Capex has had a higher correlation (.62) to the quarterly growth path of real nonresidential investment, compared to Future Inventories (.38) and the Current New Orders-Inventories spread (.38). From a slightly different angle of rolling three-year (or 12-quarter) correlations, we zoomed in to the most recent pre-COVID period ending in 2020's first quarter. The result still had Future Capex (.70) in the correlation lead with Future Inventories a close second (.69) and Orders-Inventories a distant third (.52).

Our favorite normalizer, the z-score (deviation from the mean adjusted for volatility) was utilized to level the playing field between all three measures. Preliminary fourth-quarter indications reveal three distinctly different paths for U.S. capital expenditures. Future Inventories point to upside risk, the Orders-Inventories spread is closest to the moderate consensus projection, while Future Capex continues to imply a sluggish investment profile.

C-suite occupants are not foreign to the capital investment outlook of their respective firms. They know the path forward; they help draw it up. The dispersion in the Empire Manufacturing Survey's three guides for U.S. business investment speaks to the uncertainty of the moment. We defer to the Future Capex index which is the least bullish of the lot.

It's no aside. We applaud the second dose of good vaccine news. We remain uncertain as to the speed with which a rollout can staunch the U.S. economic damage given the virus will be left to continue spreading relatively unchecked vis-à-vis this past spring. Until further clarity on precise timing and acceptance is attained, conviction for a sustained economic recovery is unlikely to return to normal.