Thanks for reading my diary today.

It was much appreciated

Enjoy the evening.

Be safe.

T-Mobile (TMUS) had a qood quarter -- could help AT&T (T) tomorrow.

Match Group (MTCH) , which I recently covered, misses by $0.15/share (in line revenues) and guides sales lower than consensus.

Covered too soon as the stock should tank.

I'm adding further to Invesco Ltd. (IVZ) in here.

I have covered the balance of my (ROKU) short at about $313.

Bidding for more (GRBK) and (SONO) now.

I am taking in more of my Sleep Number (SNBR) short now.

I have rarely heard such universal confidence about the market's advance continuing as I have had in listening to the business media. 

I have been the view that there are numerous possible market and economic outcomes - many of them market unfriendly - and that the headwinds of continuing supply chain dislocations, higher interest rates and inflation could kill the goose that has continued to lay the golden egg. 

Admittedly the consensus has been correct. 

But I have to say that pride goeth before a fall.

I am covering more of the following shorts: (LSPD) and (YY) .

(FGEN) is undergoing a Stage of a Phase 3 Study for Roxadustat for treatment of anemia in patients with lower risk myelodysplastic syndrome - open label, dose selection. 

Here is the abstract: 

"Anemia is the predominant cytopenia in myelodysplastic syndromes (MDS) and treatment options are limited. Roxadustat is a hypoxia-inducible factor prolyl hydroxylase inhibitor approved for the treatment of anemia of chronic kidney disease in the UK, EU, China, Japan, South Korea, and Chile. MATTERHORN is a phase 3, randomized, double-blind, placebo-controlled study to assess the efficacy and safety of roxadustat in anemia of lower risk-MDS. Eligible patients had baseline serum erythropoietin =400 mIU/mL, and a low packed RBC transfusion burden. In this open-label (OL), dose-selection, lead-in phase, enrolled patients were assigned to 1 of 3 roxadustat starting doses (n=8 each): 1.5, 2.0, and 2.5 mg/kg. The primary efficacy endpoint of the OL phase was the proportion of patients with transfusion independence (TI) for =8 consecutive weeks in the first 28 treatment weeks. A secondary efficacy endpoint was the proportion of patients with a =50% reduction in RBC transfusions over any 8-week period compared with baseline. Adverse events were monitored. Patients were followed for 52 weeks. Of the 24 treated patients, TI was achieved in 9 patients (37.5%) at 28 and 52 weeks; 7 of these patients were receiving 2.5 mg/kg dose when TI was achieved. A =50% reduction in RBC transfusions was achieved in 54.2% and 58.3% of patients at 28 and 52 weeks, respectively. Oral roxadustat dosed thrice weekly was well tolerated. There were no fatalities or progression to acute myeloid."

This is above my pay grade but I am trying to get a pro analyze this for me/us!

Buying (C) , (MSOS) , (DISCK) , (VIAC) and (BA) .

We are undergoing an internet upgrade - I will return when completed.

With everyone getting all excited at the same time regarding the Russell Index overnight - it is not surprising that (IWM) is down on the day.

I added to (IVZ) at $26.14.

Good stuff from Peter: 

I'm reposting this history lesson I wrote a few months ago ahead of tomorrow's FOMC announcement which has been pretty well telegraphed with the taper and its pace. It just lays out the stock market behavior around tightening periods since 2010.

Outside of the August 2015 selloff related to the Chinese yuan modest devaluation and the COVID induced crash, every notable correction in stocks surrounded a change Fed policy toward tightening. QE1 ended on March 30th 2010. We rallied for the next 3 weeks and then proceeded to fall by 16% from high close to low close in early July. On June 30th 2011 QE2 ended. We held in for the next 3 weeks and then sold off by 18% into early October. Around the time QE3 was ending in the fall of 2014, the S&P 500 was down as much as 10% intraday into mid October. Yellen finally got around to hiking rates in December 2015 after 7 years of zero. We rallied for 2 weeks and then sold off by 12% into mid February 2016. Yellen didn't hike rates again until December 2016 but 2017 was saved by the hopes of the corporate tax cut which was signed at year end 2017. After that excitement and another rate hike in December 2017, the vol trade blew up in January/February 2018 with a 10% correction. Fast forward to Q4 2018 and we all know what happened when Powell kept hiking and the S&P 500 fell 20%.

Having ZERO opinion on Tesla stock and putting aside the extraordinary market cap add over the past week and the Musk comments last night, I did find it amazing that the 7 day Relative Strength Index closed yesterday at 97.5 out of 100. It's an incredible amount of upside technical thrust. I went back 10 years and there was not an RSI this high.

TSLA 7 day RSI

This was a tweet that my friend Ben Hunt retweeted last night that highlighted a 'Supply Chain Chrg' of 4% slapped on a retail sale of a quart of paint at Sherwin Williams. It's the first time I've seen that.

So it is true that Zillow was choking on too many houses rather than just being backed up in terms of being able to renovate them. A Keybank analyst looked at about 600 of the 7000 houses for sale and determined that 2/3 of them are being offered below what Zillow paid. Another unintended consequence of the Fed letting the housing market run too hot. A lesson apparently not learned after the mid 2000's shockingly.

Speaking of housing, Apartment List published its November National Rent Report and it showed an .8% m/o/m increase in rents. While this is the slowest pace since February, they are up "a staggering 16.4%" year to date. Apartment List then said, "To put that in context, rent growth from January to October averaged 3.2% in the pre-pandemic years from 2017-2019." The positive from the point of view of renters is that their vacancy index "ticked up for a 2nd straight month" and "While the market remains extremely tight, we're now seeing the first signals of that pressure beginning to ease." The problem though is that prices are already up sharply with "35 of the nation's 100 largest cities have seen rents jump by more than 20% since the start of the pandemic. Even if rent growth is finally cooling, this year's rent boom has already added significant housing affordability pressure for America's renters."

With respect to shipping, we've seen a partial give back over the past month in the large increase in the Baltic Dry Index shipping rate but as iron ore is a main commodity that's being shipped there is a close relationship in the price of each. And, China is the reason why iron ore prices have recently fallen because of their crackdown on steel production. There was restocking in the beginning of the month which correlated with the jump in the Baltic Dry Index and then fell off in response to production cutbacks of steel because of not just the government attempt to control emissions but also due to the property market slowdown.

IRON ORE price in white, Baltic Dry Index in orange

In contrast to the fall in iron ore prices, the price of wheat has broken out to a fresh 9 year high. High food and energy prices have been the center of major country protests over the past decade. See Arab Spring and the Yellow Vest protests in France.

WHEAT

With deference to The Clash and the law, The Reserve Bank of Australia fought the market and the market won. That was clear last week when they implicitly ended YCC and short end yields ripped higher. Today Governor Philip Lowe of the RBA said "The decision to discontinue the yield target reflects the improvement in the economy and the earlier than expected progress towards the inflation target." They didn't however change their overnight rate from the very low .10% and Lowe said "the latest data and forecasts do not warrant an increase in the cash rate in 2022. The Board is prepared to be patient." In the inflationary world we're now living in, being "patient" when rates are so far below the rate of inflation is not a good strategy and as seen in the Australian bond market, the market will instead set the level of market rates. There was not much movement in Australian bond yields in response to the still dovish RBA and the Aussie $ is lower vs the US dollar but so are many other currencies today. The ASX closed down .6%.

The Swiss National Bank we know has been quite aggressive with its monetary policy by having rates at -.75%, constant FX intervention and expanding their balance sheet to well above the level of GDP in part by buying stocks around the world including all the mega cap US stocks. Only by having low inflation have they been able to get away with this without incident. Today though we saw CPI rise .4% m/o/m, double the estimate and by 1.3% y/o/y, 2 tenths more than expected. It will be really interesting to see how the SNB will get out of deep NIRP without a market hissy fit. Yields actually went down in Switzerland today, along with all of them in Europe, so no concern yet.

Markit revised its October Eurozone manufacturing PMI slightly lower to 58.3 from 58.5 initially and vs 58.6 in September. That is the weakest since February and we can attribute that to "a worsening of the supply chain situation in October, which curbed production growth sharply during the month. Average delivery times for raw materials lengthened at a rate exceeded only twice in almost a quarter of a century of survey data as companies reported demand once again running ahead of supply for a wide variety of inputs and components. Production constraints at suppliers were reported alongside a growing list of logistical issues. These include a lack of shipping containers and inadequate freight capacity, port congestion, driver shortages and broader transport delays linked mainly to the pandemic" according to Markit. Everything we know all too well at this point. As stated, European bond yields are down across the board after the recent jump. The euro is down slightly but back below $1.16 vs the dollar. European stocks are mixed.

This is consistent with Morgan Stanley's Mike Wilson's consumer cooling off theory.  (h/t Badgolfer)

Bought more (DISCK) .

Trading around my (TSLA) short - covered some in premarket weakness and just reshorted some.

Not surprisingly, (KKR) beat by a dime, reporting EPS of $1.05. 

Revenues were stronger as well. 

As good as it gets? 

Let's see how the market reacts... I have been adding to my short recently.

Joyy (YY) , the object of my disaffection, is downgraded at Goldman Sachs as the price target is taken down to $57. 

Keybanc takes down price target of (ROKU) from $490 to $460. 

(HOOD) got a few price downgrades.

Discovery (DISCK) has declined to a point where there is some value. 

Should the execution of the merger with Warner - early next year - be successful, the combined entity will have more than "some" value. 

I was more than a little bit early on this name and suffered a loss and sold most of my shares at higher prices. 

I am reassessing DISCK weighting now. 

I will try to get an update out in the next few days. 

Meanwhile if you get Morgan Stanley's research they have an excellent piece out on this name today. 

I added small to a small DISCK position.

The Deere (DE) labor contract suggests wage inflation is not temporary.

This article by my pal Lance Roberts is worth a read.

I continue to add to a very large position in Viacom (VIAC) . 

This is not a trade. I don't care about the chart or the FIB numbers. I am looking at upside reward vs downside risk in terms of years and not weeks. 

VIAC, for me, is a long term investment - as such, I look at the recent price decline as an opportunity to add. 

My investment case was made here.

VIAC has an abundance of valuable assets and plenty of free cash flow. 

Under its umbrella is a major studio - big films can guarantee future cash flow - and library at under 5x EBITD. 

Earnings are to be reported on November 4th and they won't be robust - this is well known, but I am not buying the stock because of next quarter's EPS. 

Shari Redstone is getting older and she is not her dad. 

Despite her control position, she will not hold out forever as an independent company. 

My guess is that the company is ultimately sold - and in a timeframe within my investing horizon.

There is a place to speculate in most portfolios.

It all depends on your individual risk profile and appetite.

But speculation takes many forms:

* In small-cap gewgaws that may blossom into beautiful flowers.

* In (long AND short positions) in large-cap stocks (like Tesla (TSLA) and other EV OEMs).

* In other concept stocks (again both long AND short positions).

I prefer to speculate by shorting overvalued stocks -- (DWAC) and (TSLA) are two recent examples of speculations I have entered into.

But I recognize that most prefer to speculate in stocks that are priced under $5 that they perceive to hold more value than the markets price into them currently.

Whatever your object of speculation is, it is most important to weigh the size of the position relative to the aforementioned risk profile/appetite.

On speculative shorts this is particularly important owing to the asymmetry of upside vs. downside -- and in recognition that in today's markets, the tail risk of an individual short can be quite large as the crowds often behave "ape like."

I recently took a long position in Sonos (SONO) .
I failed to mention (yesterday) that the stock was featured in Barron's. 

The shares rose 6% on Monday.

Digital World Acquisition Corp. (DWAC) is trading lower in premarket - to $58.90/share.

That's down from $174 about 1 1/2 weeks ago.

Danielle DiMartino Booth on a possible "bottleneck recession":

• The ISM New Orders-Inventories spread shrunk to 2.8 in October, the lowest since last year's re-opening; as a z-score, this is below trend at -0.67, and mimics the rest of the world, with only 59% of major economies seeing spread expansions, the worst since June 2020
• The factory workweek plus overtime collapsed from 45.7 hours in February 2020 to a low of 41.3 hours in April amidst pandemic shutdowns; since recovering in January, performance has been up-and-down, before settling just below January's print at 45.6 hours in September
• ISM's lead time commitment for production material advanced to 96 days in October from September's 92 days; higher upstream costs have manifested into a near-record level of credit extension, with the NACM's Credit Managers' Index registering a 70.0 print in October

Tesla (TSLA) is trading -$80/share (to $1,128/share) in premarket.

The proximate cause for the decline is that (in contradiction to a previous statement from Hertz) Elon Musk says the Hertz (HTZZ) contract (for about 100k vehicles HAS NOT BEEN SIGNED) and that the deal will have no impact on the company's economics! 

History books will be written about Tesla's parabolic rise over the last three months.

I remain short:

Nov 01, 2021 ' 01:57 PM EDT DOUG KASS

Tesla Short Basis

Tesla (TSLA) short basis now (scaled up on strength) about $1,170.

For a change, it was a quiet night for futures with little in the way of "night moves."
Flat.