Trade ideas thread – European session 28 July 2020

Trade ideas thread - European session 28 July 2020

Daily thread to exchange ideas and to share your thoughts
For the case of gold, did Icarus fly too close to the sun? The quick pullback is a bit of a warning sign but dip buyers are still holding on for the time being.
By Justin Low The Chicago Bulls shouldn’t be in any rush to trade Zach LaVine, but they should listen to trade offers and be willing to pull the trigger if a Godfather offer is brought to the table. Here’s what you need to know about the rental market — from macro data like unemployment and vacancy rates to how various property types are faring. Campaign staffers for Joe Biden cannot have the TikTok app on their personal or work phones, and must get approval before trading individual stocks,… Joe Douglas addressed his biggest move as Jets GM: trading star safety Jamal Adams to the Seahawks. Many pundits say a new wave of low-to-zero-cost trading and high-quality market information has “democratized” investing, but the pros always have an edge.

WCRS 28-07

For the case of gold, did Icarus fly too close to the sun? The quick pullback is a bit of a warning sign but dip buyers are still holding on for the time being.

Elsewhere, while the dollar is a little firmer, it isn’t really changing much of the story for now with EUR/USD still above 1.1700 and USD/JPY keeping around 105.00 levels.

As for myself, I’ll be sharing some basics on ‘Expectations and Trading’ at 1200 GMT.

Anyway, the session ahead may be a bit more of a quiet one with the focus staying on dollar flows and the risk mood. US futures are keeping at flatter levels after an optimistic start yesterday, so we’ll see what the day ahead has to offer.

What are your views on the market right now? Share your thoughts/ideas with the ForexLive community here.


Chicago Bulls Should Do Due Diligence On Zach LaVine Trade Front

Chicago Bulls Should Do Due Diligence On Zach LaVine Trade Front

CHICAGO, ILLINOIS – JANUARY 04: Thaddeus Young #21 of the Chicago Bulls and Zach LaVine #8 of the … [+] Chicago Bulls during the second half against the Boston Celtics at United Center on January 04, 2020 in Chicago, Illinois. NOTE TO USER: User expressly acknowledges and agrees that, by downloading and or using this photograph, User is consenting to the terms and conditions of the Getty Images License Agreement. (Photo by Nuccio DiNuzzo/Getty Images)

Chicago Bulls shooting guard Zach LaVine had a career season in 2019-20, going for 25.5 points per game on a stellar 56.8% true shooting mark. LaVine’s scoring binges single-handedly kept the Bulls in a number of games and won some others.

Unfortunately, as has been the case his entire career, LaVine’s squad didn’t sniff the playoffs. Chicago went just 22-43 as part of its shortened campaign, failing to even qualify for the NBA restart in Orlando, Florida.

It’s hard to blame LaVine too much for this failure, but he’s not without fault. He got off to a sluggish start to the season and didn’t perform well overall in the clutch, even taking into account some of his heroics. The guard tried to play hero too often, resulting in forced shots and a poor shooting percentage in crunch time. Some of this was a function of the roster and coaching, but LaVine can get tunnel vision at times. He’s also no defensive savant.

Still, LaVine is a borderline All-Star on an affordable contract. He’s making $19.5 million each of the next two seasons to finish out a four-year, $78 million contract. That’s reasonable for his production, flaws and all.

With a new front office in place, though, the Bulls could look to shake things up. Arturas Karnisovas and Marc Eversley have praised LaVine and the potential of this young roster, but everything should be on the table given the failures since the Jimmy Butler trade.

That means trading LaVine should be a consideration, even if it’s not a likelihood.

NEW YORK, NEW YORK – FEBRUARY 29: Head coach Jim Boylen of the Chicago Bulls talks with Zach LaVine … [+] #8 in the second half against the New York Knicks at Madison Square Garden on February 29, 2020 in New York City.The New York Knicks defeated the Chicago Bulls 125-115.NOTE TO USER: User expressly acknowledges and agrees that, by downloading and or using this photograph, User is consenting to the terms and conditions of the Getty Images License Agreement. (Photo by Elsa/Getty Images)

A report from SNY’s Ian Begley on Friday sparked chatter about a possible LaVine trade, with Begley writing that the New York Knicks and Brooklyn Nets are among the teams to do “background work” in case LaVine asks for a trade this offseason.

LaVine has done no such thing yet. In fact, K.C. Johnson of NBC Sports Chicago responded to the Begley report by saying LaVine recently traveled to Chicago to meet with Karnisovas and Eversley before taking part in voluntary workouts at the Advocate Center. The meeting was reportedly positive, and Johnson says Thaddeus Young is much more available than LaVine.

However, teams have seen LaVine lament his lack of team success in his career, as well as the speculation that Jim Boylen could be back as head coach. LaVine and Boylen have had a turbulent relationship over the last two seasons, with notable highs and a number of lows. Given this, it’s easy to see why teams are staying ready for a potential LaVine trade request, especially if Boylen stays.

Even if LaVine doesn’t explicitly ask for a trade, the Bulls would be wise to do their due diligence and listen if any offers come through. They shouldn’t necessarily shop him and shouldn’t trade him for pennies on the dollar, but if a big-time offer is put on the table, Chicago should think about pulling the trigger.

Would the Knicks or Nets be desperate enough to make a Godfather offer for LaVine?

NEW YORK, NEW YORK – FEBRUARY 29: Zach LaVine #8 of the Chicago Bulls tries to get past RJ Barrett … [+] #9 of the New York Knicks in the first half at Madison Square Garden on February 29, 2020 in New York City.NOTE TO USER: User expressly acknowledges and agrees that, by downloading and or using this photograph, User is consenting to the terms and conditions of the Getty Images License Agreement. (Photo by Elsa/Getty Images)

New York just hired former Bulls coach Tom Thibodeau, who also coached LaVine before he tore his ACL in 2016-17 with the Minnesota Timberwolves. The Knicks have a number of young players and a stash of draft picks at their disposal, and Thibodeau could desire more proven talent on the roster. Even so, it’s hard to see them being willing to offer up RJ Barrett, Mitchell Robinson or their 2020 first-round pick (currently slated at No. 6 in the lottery). The Bulls would need at least one of those assets to even think about making a trade, but even that might not be enough. Furthermore, Robinson would be an awkward fit with the presence of Wendell Carter Jr. and Lauri Markkanen in Chicago.

As for the Nets, they’re reportedly seeking a third star to join Kevin Durant and Kyrie Irving. They had previously been linked to Bradley Beal (the Knicks could also be in play for Beal) and continue to be, but LaVine could be a backup option if that falls through. One would imagine Caris LeVert would be a trade centerpiece, or perhaps even former Bull Spencer Dinwiddie. Brooklyn would have to include draft assets, but none of them are all that appealing right now. While the Nets making a massive offer for LaVine currently seems far-fetched, they may feel they have to do something splashy as Durant returns from an Achilles injury at the age of 32.

As Begley mentioned, there will likely be other suitors sniffing around. There were rumblings about the Denver Nuggets’ interest in LaVine before the trade deadline. The Orlando Magic could use an explosive scorer in the backcourt. The Philadelphia 76ers have long been an intriguing fit. There could be others.

Again, the Bulls shouldn’t be in any rush to trade LaVine. He’s their best player and has noticeably improved since returning from the torn ACL. Given the circumstances, though, nobody in Chicago should be untouchable. Other teams may not value LaVine as much as the Bulls and match their demands in any potential trade negotiations, but never say never in the NBA.


Author: Jason Patt

What's the outlook on the rental market now?

What’s the outlook on the rental market now?

Where does the rental market stand today? Seems like there’s positivity in the papers on Wall Street with the NASDAQ — somehow — reaching new heights. However, the main streets indicators are mixed with shuttered businesses and streets full of protesters.

But it’s important to note that even with everything that’s going on, the average American consumer seems to be getting over the shell shock that were the months of March and April, when COVID-19 first hit. Confidence rates are starting to mirror 2012 indexes.

If you’ve been around the block, then you know that 2012 was one of the best years to get into real estate investment because of the enormous gains in property value that followed. But I doubt it will be that good. The market hasn’t dropped enough for that type of rally.

Below, we will go into the more macro data that will likely affect any real estate investor and how. From there, we will drill into property types that are faring rather well in the current market and others that have seen better days.

Let’s try to separate ourselves, for a moment, from the pixie dust on Wall Street and the headlines in the news, so we can figure out where the rental market really stands and know how to stay in front of the chaos. First up, macro data.

To economists’ surprise, because this level wasn’t expected, unemployment is actually looking like it’s heading on down as the market reopens, with jobless claims dropping consistently since mid-April. Businesses are rehiring at least some of their workforce (see chart below), which has created a significant bump in employment from April.

That said, unemployment isn’t going down especially quickly, and with COVID-19 rates rising, it’s now foreseeable that more bankruptcies for small and medium-sized companies will be coming as their PPP loans dry up, hampering the comeback of local job markets.

Nationally, for Q1 of 2020, the vacancy rate was sitting pretty at 6.6 percent for housing. And that’s tough to beat, given that people move and places need time to turnover and release.

A low vacancy rate is always good because it (usually) means you have your units filled with tenants. New numbers of this on a national level are coming, but given what I’m seeing in Phoenix and Tucson, it may be possible we get closer to 7.9 percent due to specific property type getting hit, which I’ll go into in a minute. (Phoenix is a primary city. Primary cities tend to trend together, kind of like the DOW or S&P.)

And with that said, I have all my investors write in a 10 percent vacancy before buying, because it’s more conservative, and because much of the time, we reposition the property to make it more valuable. That means we usually have to evict more tenants upfront.

Are people using them for things they need like food, gas and rent? Or are they putting the money into Starbucks and Apple stands? Well, according to the average savings rate, households are saving “a record amount of new income.”

It looks like we are being very conservative with our savings overall. So can we just applaud ourselves for a moment? We just hit the highest saving rate I could find by a lot — and I went all the way back to 1958.

In April, it was at 32 percent, but that’s tapered down to 23 percent in May. For comparison, the closest rate was 17 percent in 1975. In the short term, I’d say the increased savings is a good thing. People are saving but are still willing to open up their wallets a bit, given the sizable May drop in savings.

It’s a point for the “pent-up demand” argument because it looks like there’s money to spend if the market comes back soon. And if the market doesn’t jump back, at least Americans are being frugal with discretionary spending, heightening our chances as property owners to collect the rent.

So, at the 10,000-foot level, it’s looking like the average consumer or tenant is in a decent spot with businesses rehiring, stimulus checks being spent wisely and vacancy rates that started at very strong levels — all of which reduce the risk of tenants reaching a tipping point on making rent.

The main tipping point, in the short term, will be the $600 federal stimulus checks ending at the end of the month. But, for the moment, there’s far too much speculation (both good and bad) on that to give any meaningful analysis just yet.

This is generally positive data, but it doesn’t necessarily mean it will translate to your specific rental type. And buying and working this new market correctly is imperative to get any benefit from your rentals.

Because vacancies definitely don’t tell the whole story, we have to ask — how are rentals really performing right now? What rental types are getting hit most right? And who’s faring surprisingly well?

Since Fort Lowell, my family company, is rooted in property management, we’re part of a few industry groups like the National Association of Residential Property Managers (NARPM). So, we get these charts filled with other managers’ self-reported performances on the rents and how they’re handling things.

Note that NARPM is only collecting data on single-family home rentals. So, here’s May’s summary of what type of tenants are paying per an average of hundreds of management companies.

For June, the rates are looking pretty similar. We’re seeing the same activity as May as well.

Also, in the reports, management companies briefly go over new best practices. It seems to me what works best is essentially what I said in this video that goes over, in depth, how we’re handling managing tenants.

With our program, we’ve collected 97 percent of rents for June and July, making us a top performer. Note that a big portion of our portfolio is lower-income multi-family rentals, one of the harder-hit sectors. We hover at 99 percent collection for single-family homes. I’ll take my trophy now, thanks.

Student housing has had better semesters, especially if they haven’t announced a reopening of campus yet, making leases for next year very soft. That said, we’ve collected nearly all of the rents for current leases. Gotta love those parental guarantor forms.

I don’t see this renting issue directly getting fixed until the college your property is next to announces when it’s reopening. Currently, we’re pivoting the tenant base on many of these properties and pushing marketing efforts for what little tenant base is left. This market is brutal right now, and only the innovators in this sphere will hold onto their leveraged properties. 

Rentals meant for the elderly aren’t faring as well, which makes sense. People and the elderly are afraid of sharing a space with four of five other people.

I’m no expert, but this one will likely continue to be a huge issue until a vaccine is deployed. Even then, I see this tenant base just being more apprehensive moving forward.

As a counterpoint, the elderly are one of the fastest growing markets. So, it might get back to normal and continue to grow through sheer tenant population growth and, sadly, their lack of better alternatives.

Lastly, and unsurprisingly, affordable housing that’s not part of section 8 or a voucher program is getting hit due to job losses and cutbacks. The stimulus checks are keeping them afloat in the very short term, but anything short of a full market reopening with strong local rehiring will result in lower performance. If the stimulus checks don’t appear in their bank accounts soon, collections will go down.

Generally, the average-priced, single-family rental is doing pretty well. Nearly all of our single-family rental homes are paying rent. In fact, this property type is still booming.

For example, we put up three homes for rent in Phoenix on the same day. For days, we got over 100 emails and texts per day, and within 36 hours, we had eight to 10 applications on each home.

This is due to a few factors. First, the Phoenix single-family home market is red hot and has been for years with supply far below our growing demand. Second, many people haven’t put their homes up for rent due to the outbreak. Financially speaking, this is a mistake given how low current supply is in Phoenix. Lastly, we have a heavy focus on online marketing.

If you don’t have a strong online presence, your rentals will suffer. People’s habits are changing when finding, viewing, signing and maintaining real estate. This subject is entirely another article, but the summary is that you need a strong online presence. The stick in the yard with a “for rent” sign won’t go as far as it used to. 

The market overall is showing that rentals have been bruised but have every ability to come back. However, some property types, like college housing and elder care, will likely require some adjustments to maximize their returns.

For my Arizona market specifically, our infection rate (25 percent) is the only thing that’s truly positive. The growth of COVID-19 nationally will likely hurt collection rates in the coming month or so, but by how much remains to be seen. 

Lastly, given new tenant habits and needs being created because of the outbreak, you will need to ensure you have a strong online presence or your properties won’t fill up like they used to.

Bob Collopy is an associate broker with Fort Lowell Realty and Property Management Inc. in Phoenix, Tucson, D.C. and New York. Connect with him on LinkedIn and YouTube.


Author: by
Bob Collopy |

July 27, 2020

Biden campaign staff barred from trading stocks without approval — and no TikTok

Biden campaign staff barred from trading stocks without approval — and no TikTok

Campaign staffers for Joe Biden cannot have the TikTok app on their personal or work phones, and must get approval before trading individual stocks, according to a new report.

Citing an internal email, Bloomberg News reported on Monday that the presumptive Democratic presidential nominee’s campaign has updated its employee handbook with new rules.

Staff may not trade stocks without the written approval of the campaign’s general counsel, Bloomberg reported, to “ensure that staff do not even inadvertently trade on nonpublic information.”

The stipulation is unusually strict, and President Donald Trump’s campaign reportedly has no such restriction.

“As we gear up to officially become the Democratic nominee, we took a moment to ensure that the policies of our campaign represent the highest ethical standards,” Bill Russo, a Biden campaign spokesman, said in a statement.

The move comes after a number of U.S. senators were accused of trading stocks based on inside information before coronavirus lockdowns took effect, belting the economy.

The ban on TikTok, the video app owned by Beijing-based Bytedance, is more in line with government recommendations. The app has also been banned by the State Department, the Department of Homeland Security and the U.S. military, due to fears that private data the app collects could make its way back to the Chinese government. TikTok has denied that it provides — or would provide — data to China.


Author: Mike Murphy

'I never promised an offer': Takeaways from Joe Douglas' post-Jamal Adams trade comments

‘I never promised an offer’: Takeaways from Joe Douglas’ post-Jamal Adams trade comments

It’s been quite the offseason for Joe Douglas.

He had his first free agency period, his first draft and… his first superstar contract dispute! After months of reports about the future of Jamal Adams, including plenty of fiery comments – both public and private – Douglas finally shipped the safety to Seattle for a bounty.

Douglas addressed the media Monday just two days after the trade. Douglas addressed why and how the Adams deal went down, how he felt about Adams’ public criticisms of both himself and Adam Gase and what he thinks about the future of the team.

Here are the biggest takeaways from Douglas’ conference call.

(Steve Luciano-AP)

Joe Douglas emphatically denied Adams’ assertion that the Jets weren’t honest about their contract negotiations with him this offseason.

“I never promised an offer to Jamal or his agent,” Douglas said. “I was never dishonest or ambiguous.”

Much of Adam’s frustrations with the Jets this offseason revolved around the team’s unwillingness to give him a contract extension offer. Adams said he talked with the Jets during the NFL combine about an extension, but those negotiations never progressed to the point of the Jets actually offering Adams a new deal. That angered Adams and led to multiple social media rants in which he bashed the team. His frustrations culminated in an explosive interview with the New York Daily News, in which Adams implied Douglas wasn’t honest about his intentions to pay Adams this offseason.

Douglas added that the Jets “weren’t in a position to do anything immediately” with Adams because of the uncertainty surrounding the salary cap.

“I think the communication from my standpoint was pretty clear,” Douglas said. 


Author: Spencer Aber

Insana: When market pundits say, 'this time is different,' brace for the possibility that it's not

Insana: When market pundits say, ‘this time is different,’ brace for the possibility that it’s not

Does financial market history even matter anymore?

Many pundits say no, since a new wave, of low-to-zero-cost trading, and another wave of high-quality market information has “democratized” investing so much so that the retail public is just as informed, or certainly can be, as multibillionaire investors.

Now, some of us have recently questioned this line of reasoning as a more nuanced way of using the dreaded phrase “this time is different” when it comes to describing a bubble-like environment in financial assets.

It’s a phrase we often hear before the inevitable, and broad-based, price decline asserts itself.

The rationalizations have been uttered by such notables as Chamath Palihapitiya, a billionaire investor himself, to Barstool’s David Portnoy, a centimillionaire who claims stocks, or “stonks,” in his parlance, can only go up.

Chamath, on CNBC last week, opined that individual investors have access to the same information as the pros, an idea that was popularized in the 1990s, during the internet bubble, and that the maturing of business television networks, of which CNBC was the leader, had so democratized information that individuals could trade like the pros.

While I was a full participant in that experience, we found out that democratization only goes so far, and the real pros always have an edge.

The broader financial media have, somewhat belatedly, begun to take notice of the extraordinary increase in day-trading being undertaken by individual investors today, many of whom have been sheltering-in-place during the pandemic, are bored with the inability to gamble on sports, or just want to make a killing on Wall Street as stocks, large and very small, continue to soar.

The relatively recent action on Wall Street, about which I have expressed a great degree of caution, has been met with an equally great degree of derision by some internet gurus of current vintage … no need to belabor that point.

However, The Wall Street Journal reported over the weekend that day-trading among individual investors is now more popular than it was during the internet frenzy of the 1990s, and that more and more inexperienced individuals are rolling the dice on Wall Street expecting day-trading to turn into a day job.

As in the 1990s, 1960s, 1920s, 1870s, and even the 1630s, this raises the question as to whether or not extreme day-trading, the concentration of unprecedented gains in mega-cap stocks coupled with rampant speculation in so-called “penny stocks” is indicative of yet another stock market bubble.

Many market historians have written important books about financial market bubbles. Charles McKay, author of “Some Extraordinary Delusions and the Madness of Crowds,” published in 1841, was among the first to chronicle Holland’s excess speculation in tulip bulbs in the 1630s.

Prominent economists and historians from John Kenneth Galbraith, “The Great Crash 1929,” published in 1954, and “A Short History of Financial Euphoria,” from 1993, to Edward Chancellor’s, “Devil Take the Hindmost,” published in 1999, to Charles P. Kindleberger’s, “Manias, Panics and Crashes,” from 1978, have written eloquently and clearly about the commonalities and repetitive nature of speculative episodes and financial market excesses.

Books by Hyman Minsky, Naseem Taleb, Jeremy Grantham, and myself, among others, have sought to identify the makings of a bubble and assess its impact on the economy as a whole.

Kindleberger is most adept at describing the necessary conditions that define a bubble. They are as follows:

  •  Displacement                (We call it technological innovation)
  • Monetary Expansion     (We call it zero-interest-rate policy and quantitative easing)
  • Overtrading                   (We call it retail speculation)
  • Revulsion                      (We call it a crash)
  • Discredit                       (We call it a secular bear market)

It would appear we are in Phase III of Kindleberger’s five stages of a bubble.

It’s also a quite common feature of a bubble that those who question the euphoria of the moment to be criticized, excoriated publicly, and sometimes even threatened, for pointing out that bubbles are routine, repetitive and eventually damaging events that separate many from their money.

Let me just say with certainty that speculative episodes, one of which is currently being rationalized as a democratizing event in the financial markets, will end badly.

I’ve seen it happen many times in my career.

Wild speculative episodes in shares of public companies date back as far as 1st Century Rome, Chancellor wrote.

There is also archaeological evidence that futures markets, mortgages, and other derivative financial instruments, were introduced to the investing public as far back as Ancient Sumeria. (And by the way, I have a ziggurat in Ur to sell you … cheap!)

In our infinitely more-advanced society, meanwhile, the individual’s expanded access to new technologies for inexpensive trading, unlimited amounts of information (even if some of it is questionable or not nearly as helpful as that which can be accessed by professionals), and the rise of popular figures who extol the benefits of day-trading has made this America’s national parlor game once again.

A word of caution, those who are drawing you in will likely exit the market well before you do. Trust me.

Or, if you don’t, read the works of anyone I mentioned above.  I may not, according to some, know what the hell I’m talking about, but I am certain as hell that they sure do.

Commentary by Ron Insana, a CNBC and MSNBC contributor and the author of four books on Wall Street. Follow him on Twitter @rinsana.


Author: Ron Insana

Trade ideas thread - European session 28 July 2020

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