MidWeek Commentary

HI Market View Commentary 02-25-2019

HI Market View Commentary 02-25-2019

What I want to talk about today?

What do you do when nothing you are doing in the market is working?

Collar trade because SOMETHING has to be working

The Stock make money in bullish movement

The Long Put make money in bearish movement

And you can use the short call in stagnant to bearish movements

If you can add shares when bearish you have more explosive returns to the upside and when most are just trying to break even

My Core stock for those that lost more then 30% last year: AAPL, BIDU, FB, F, BAC, ZION, AOBC, FCX

That Lost 20% last year DIS, UAA,

Lost 10% last year 10% V

YES there are times that I get frustrated – Market, Clientele that won’t give the collar trade time to work, People that are looking at a drawdown but NOT calculating how much we made on the way up, Short term thinking

I’m not saying the market is easy and you who else doesn’t think the market is easy?

Where will our markets end this week?

Down

DJIA – Bullish a bit overbought

SPX – Bullish  almost overbought

COMP – Bullish almost overbought

Where Will the SPX end March 2019?

02-25-2019             0.0%

Earnings:   

Mon:            SHAK, DDS, DRYS, ETSY, MOS

Tues:            AZO, HD, M, TOL

Wed:            BBY, AES, LOW, ODP, TJX, HPQ, LB, MNST,  

Thur:           BUD, JCP, CROX, JD, DELL, GPS, JWN, VMW

Fri:              FL

Econ Reports:

Mon:            Wholesale Inv,

Tues:            S&P Case Shiller Home Price, FHFA Housing Price Index, Consumer Confidence, New Home Sales,

Wed:            MBA,  Factory Orders, Pending Home Sales, Fed Chair Powell Semi Monetary Policy

Thur:           Initial, Continuing, GDP, DGPO Deflator, Chicago PMI  

Fri:               Personal Income, Personal Spending, Construction Spending, ISM Index, Michigan Sentiment

Int’l:

Mon –

Tues –         

Wed –          CN: CFLP Manu PMI

Thursday –  CN: Manu PMI

Friday-       

Sunday –       

How am I looking to trade?

BUT I think the risk is to the downside and I want a Full Collar trade to be in place

MRVL – 3/17

RHT – 3/26

www.hurleyinvestments.com 

www.myhurleyinvestment.com = Blogsite

customerservice@hurleyinvestments.com = Email

Questions???

https://www.cnbc.com/2019/02/21/feds-bullard-rate-hikes-balance-sheet-reduction-coming-to-an-end.html?__source=iosappshare%7Ccom.apple.UIKit.activity.Mail

Fed’s Bullard: Rate hikes, balance sheet reduction ‘coming to an end’

  • St. Louis Fed President James Bullard tells CNBC he thinks interest rate hikes and the reduction of bond holdings is near an end.
  • The central bank official says he expects a timetable to be finalized in “the next couple of months.”
  • Interest rates now are “a little too high,” he adds.

Jeff Cox@JeffCoxCNBCcom

Published 7:15 AM ET Thu, 21 Feb 2019  Updated 8:56 AM ET Thu, 21 Feb 2019

The Federal Reserve is likely near the end of interest rate increases and the program to reduce the bonds it holds on its balance sheet, St. Louis Fed President James Bullard said Thursday.

“I think the message from my point of view is the normalization process in the United States is coming to an end,” the central bank official told CNBC in a “Squawk Box” interview.

Bullard added that he thinks rates are actually too high now but acknowledged that his view is in the minority on the policymaking Federal Open Market Committee. Bullard is a voting member of the FOMC and said he has tried to convince his fellow central bankers that they’ve gone “too far.”

In particular, he said the December rate hike, which was the fourth of 2018, was a mistake and helped trigger a negative market reaction.

“I thought at the December meeting, myself I thought it was a step too far. I argued against that move,” Bullard said. “We did get a bad reaction in financial markets. I think the market started to think we were too hawkish, might cause a recession.”

“I think all of this weighed on the committee and got people to change their thinking,” he added.

Indeed, 2019 has seen a pivot in Fed thinking, with minutes from the January FOMC meeting, released Wednesday, detailing the concerns officials had over the economy’s future path and the impact of the committee’s moves on how things develop.

In addition to a steady diet of rate hikes, the Fed had been reducing the size of a bond portfolio it had built up during its efforts to stimulate the economy during and after the financial crisis. The balance sheet had surged to more than $4.5 trillion, but the Fed has since reduced the bond holdings by more than $400 billion by allowing some proceeds from the assets to roll off each month without being reinvested.

The minutes indicated that the Fed likely will bring the balance sheet roll-off to a close by the end of 2019 as reserves get closer to the level where banks feel comfortable.

At the same time, officials indicated during the meeting that they now will take a “patient” approach to further tightening and will be guided by data before approving any additional rate increases.

Bullard said he expects a timetable for balance sheet program to be revealed “in the next couple of months.”

“I think we’re in a good place today,” he said. “We had a lot of success. People said it couldn’t be done.”

While U.S. interest rates are low historically, they’re actually high compared to the rest of the word, Bullard said. That’s part of the reason why he thinks rates could be cut.

“I actually think we’re a little bit tight here, a little bit too high with the rates,” he said. “But I’m in a minority view compared to the committee, I would say.”

As far as the balance sheet is concerned, Bullard said he was surprised that there remains a high demand for bank reserves, meaning the bond portfolio can stay at a higher level. “That’s going to mean a bigger balance sheet, that’s for sure,” he said.

https://www.cnbc.com/2019/02/20/deutsche-bank-lost-1point6-billion-on-a-trade-involving-buffett-wsj-says.html?__source=iosappshare%7Ccom.apple.UIKit.activity.Mail

Deutsche Bank lost $1.6 billion on a single trade involving Warren Buffett, WSJ says

  • Embattled German lender Deutsche Bank lost $1.6 billion on a single bond trade that involved insurance from Warren Buffett’s Berkshire Hathaway, according to The Wall Street Journal.
  • The bank bought a $7.8 billion portfolio of municipal bonds in 2007, according to the report. Deutsche Bank bought default protection on the bonds from Berkshire the following year, paying $140 million in the transaction.

Hugh Son@hugh_son

Published 3:35 PM ET Wed, 20 Feb 2019  Updated 4:47 PM ET Wed, 20 Feb 2019CNBC.com

Embattled German lender Deutsche Bank lost $1.6 billion on a single bond trade that involved insurance from Warren Buffett’s Berkshire Hathaway, according to The Wall Street Journal. 

The bank bought a $7.8 billion portfolio of municipal bonds in 2007, according to the report. Deutsche Bank bought default protection on the bonds from Berkshire the following year, paying $140 million in the transaction. 

In the decade after its purchase, Deutsche Bank managers delayed the recognition of losses on the trade, sparking an internal debate among executives and the bank’s auditor, the newspaper reported. The trade had become an albatross for the firm, which ultimately chose to sell the bonds at a loss and retire its Berkshire insurance, recognizing the $1.6 billion loss in 2016.

The bank’s executives debated up until last year whether it should have restated previous earnings based on the wrong-way trade, ultimately deciding not to.

“This transaction was unwound in 2016 as part of the closure of our Non-Core Operations” unit, a bank spokesman told the Journal. “External lawyers and auditors reviewed the transaction and confirmed it was in line with accounting standards and practices.”

https://www.cnbc.com/2019/02/25/warren-buffett-says-berkshire-stock-managers-weschler-and-combs-have-trailed-the-sp-500.html?__source=iosappshare%7Ccom.apple.UIKit.activity.Mail

Warren Buffett says Berkshire stock managers Weschler and Combs have trailed the S&P 500

  • Warren Buffett says Ted Weschler and Todd Combs have each trailed the S&P 500 by a “tiny bit” since they joined Berkshire as investment managers.
  • However, the billionaire investor admits they’ve done better than he has in the market over the same time frame.
  • Combs came to Berkshire in 2010. Weschler joined two years later. Both were former hedge fund managers.

Matthew J. Belvedere@Matt_Belvedere

Published 13 Hours Ago  Updated 8 Hours AgoCNBC.com

Billionaire investor Warren Buffett told CNBC on Monday that Berkshire Hathaway investment managers Ted Weschler and Todd Combs have trailed the S&P 500 by a “tiny bit” since each joined the company.

However, the Berkshire chairman and CEO points out that they’ve done better in the market than he has over the same time period. He said it’s a tough time to beat the S&P 500.

“Overall, they are a tiny bit behind the S&P, each, by almost the same margin,” Buffett told Becky Quick on “Squawk Box” from Omaha, Nebraska — where Berkshire is located. “They’ve done better than I have.”

Weschler and Combs, both former headge fund managers, now manage about $13 billion each.

Combs, in his late 40s, came to Berkshire in 2010 after a three-year search for someone to help manage the company’s massive portfolio of stocks. Weschler, in his late 50s, joined Berkshire two years later, after paying a combined $5.3 million to win the 2011 and 2010 auctions for an annual charity lunch with Buffett.

“The first few years, … they got well ahead of the index and they got paid,” Buffett said, noting their compensation is dependent on performance. “It came in thirds. So it could be clawed back, two-thirds of it, if they missed the second year and so on.”

“Both of them have done an incredible amount of work in terms of acquisitions; Todd, in particular, on our medical venture,” said Buffett, referring to the Berkshire-AmazonJ.P. Morgan venture aimed at figuring out how to reduce health-care costs for their employees and how that may possibly help cut health-care costs in the United States.

Seen as a must-read for investors, Buffett covered many topics in his weekend investor letter, including Berkshire’s $112 billion cash pile and what he wants to do with it, his first stock purchase, the dangers of too much debt, and what he sees as the biggest risks.

Berkshire’s portfolio of stocks, including top holdings American ExpressApple and Bank of America, was valued at nearly $173 billion at the end of 2018.

Monday’s interview with Buffett, 88, was conducted at Berkshire-owned Nebraska Furniture Mart.

https://www.cnbc.com/2019/02/22/how-to-prepare-your-heirs-for-the-68-trillion-great-wealth-transfer.html?__source=iosappshare%7Ccom.apple.UIKit.activity.Mail

We are entering the largest wealth transfer in history.

Over the next 25 years, according to a report from research firm Cerulli Associates, 45 million U.S. households will pass a mind-boggling $68 trillion to their children — the biggest generational wealth transfer ever.

Individual retirement accounts alone in the U.S. held more than $9 trillion in assets at the beginning of last year, according to the Investment Company Institute’s 2018 Investment Company Fact Book. To that point, many Americans are inheriting substantial wealth from their parents through IRAs. But mistakes in handling these accounts could result in needlessly losing much of this wealth to taxes. In order to increase the chances of a successful wealth transfer, it’s important to understand the proper steps to follow.

Any mistakes in handling inherited IRAs can incur hurtful taxes. To avoid these errors, heirs should have a thorough understanding of rules, preferably with the help of a qualified tax professional. Otherwise, they could end up paying an unexpectedly large portion of this inheritance to Uncle Sam and prematurely losing the main benefit of these accounts: long-term tax-deferred asset growth.

The rules for non-spouse beneficiaries are more restrictive than those for spouses. Common errors by non-spouse heirs of traditional IRAs include:

  • Taking cash out too soon or under the wrong circumstances can invalidate these accounts and make withdrawals taxable as ordinary income. (For single individuals or heads of households, this tax rate is 37 percent for incomes greater than $500,000.) To avoid this hit and keep these accounts valid as tax-deferred, heirs should be careful not to touch them before transferring them directly into accounts created expressly and solely for this purpose.
  • Titling inherited IRA accounts incorrectly will be costly. These accounts must be titled with precise wording that designates them as being inherited, stating the name and date of death of the benefactor. Thus, it’s clear from the title that rules for inherited IRAs apply. Transfers shouldn’t be executed until the new account is correctly set up and titled.
  • Don’t overlook the required minimum distributions. Owners must make these required minimum withdrawals annually, starting at age 70½. Heirs of IRAs must take RMDs in proportions based on their age. Failing to do so can trigger a painful 50 percent IRS penalty on the amount that should have been withdrawn that year. After learning that RMDs don’t kick in until the age of 70½ for original holders of IRAs, some heirs mistakenly assume that this applies to inherited IRAs. If the benefactor had begun taking RMDs but had not taken one in the year of their death, heirs should be sure to take the withdrawal required for that year before transferring the account.
  • Failing to divide IRAs by having them transferred to separate accounts of multiple heirs. Benefactors may choose to split up their IRAs among their heirs, but often they don’t. In these cases, it’s up to heirs to do this. This is especially important if there’s a significant age difference among heirs. Let’s say three siblings inherit an IRA, and one is much older than the other two. If the IRA isn’t split into three accounts, the age of the oldest sibling is used to determine the amounts of RMDs for all three. This could mean that the younger heirs would have to take out more money sooner than they’d like, incurring more tax. (Though no minimum withdrawals are required for Roth IRA owners, there are for heirs of these accounts, but these RMDs are tax free.)
  • Making contributions. Tax rules forbid heirs from contributing to inherited IRAs. Doing so can invalidate accounts, making all of the assets in them taxable as ordinary income. Some heirs inadvertently make contributions to their inherited IRAs that they intended for their own IRAs. This can be costly. Let’s say you inherit a $1 million IRA and make a $100 contribution to it. This could trigger federal tax of $370,000 — plus applicable state and local taxes. The idea is to grow the account as long as permissible under the rules, taking RMDs and incurring taxes incrementally.

“By understanding the rules before acting, heirs of IRAs can plan in ways that avoid unnecessary taxes and assure continued tax-deferred growth.”

  • Assuming that creditor protections still apply. In many states, IRAs tend to be protected from creditors and bankruptcy judgments, but inherited IRAs may lose this protection. Thus, when leaving an IRA to a financially irresponsible heir — perhaps one with gambling or spending issues — one option to protect these assets is to leave it to a trust created to serve the heir’s interests.

By understanding the rules before acting, heirs of IRAs can plan in ways that avoid unnecessary taxes and assure continued tax-deferred growth.

The key is to not touch the account without awareness of the consequences and to get a grasp of tax rules quickly, as various deadlines are involved. After the account is correctly transferred into a properly titled inherited account, cash can be taken out with minimal tax consequences in the form of RMDs.

— By David Robinson, founder/CEO of RTS Private Wealth Management

https://www.cnbc.com/2019/02/25/warren-buffett-says-bitcoin-is-a-delusion.html?__source=iosappshare%7Ccom.apple.UIKit.activity.Mail

Warren Buffett says bitcoin is a ‘delusion’ and ‘attracts charlatans’

  • Billionaire investor Warren Buffett says he sees “no unique value” in the world’s largest cryptocurrency.
  • “It is a delusion, basically,” Buffett tells CNBC’s Becky Quick.
  • The Berkshire Hathaway CEO has been a long-time critic of cryptocurrencies. He called bitcoin “probably rat poison squared,” ahead of the 2018 Berkshire Hathaway annual shareholder meeting.

Kate Rooney@Kr00ney

Published 10 Hours Ago  Updated 6 Hours AgoCNBC.com

Billionaire investor Warren Buffett is doubling down on his bitcoin criticism.

“Bitcoin has no unique value at all,” Buffett told CNBC’s Becky Quick in a “Squawk Box” interview Monday. “It is a delusion, basically.”

The Berkshire Hathaway CEO said he is sympathetic to optimists who bought the world’s largest cryptocurrency in hopes that “it would change their lives.” Bitcoin has lost more than 80 percent of its value since reaching a high near $20,000 at the end of 2017. The cryptocurrency was trading near $3,781 on Monday, according to CoinDesk.

“It attracts charlatans,” Buffett said. “If you do something phony by going out and selling yo-yos or something, there’s no money in it — but when you get into Wall Street, there’s huge money.”

Buffett has been a long-time critic of cryptocurrency. He called bitcoin “probably rat poison squared,” ahead of the 2018 Berkshire Hathaway annual shareholder meeting. A “mirage,” “not a currency,” and “tulips” are among the descriptors Buffett has used for bitcoin, according to CNBC’s Warren Buffett Archive.

In the interview Monday, he did point to potential in bitcoin’s “important” underlying technology blockchain but said its success does not depend on cryptocurrency.

Buffett is not alone in his skepticism. Business leaders including Bill Gates, economists Nouriel Roubini and Robert Shiller, and fund managers Ray Dalio and Howard Marks are among those who have questioned bitcoin’s legitimacy. J.P. Morgan CEO Jamie Dimon was also a vocal critic of bitcoin. Yet earlier this month, J.P. Morgan became the first major bank to launch its own proprietary cryptocurrency for cross-border payments.

https://www.cnbc.com/2019/02/20/samsung-galaxy-fold-release-date-price-specs.html?__source=iosappshare%7Ccom.apple.UIKit.activity.Mail

Samsung just announced the first foldable phone you can buy and it will cost $1,980

  • Samsung announced the Galaxy Fold during a press event in San Francisco.
  • The Galaxy Fold is the first phone that consumers will be able to buy with a folding display.
  • You will be able to use it like a tablet or in a smaller form factor like a phone.

Todd Haselton@robotodd

Published 2:05 PM ET Wed, 20 Feb 2019  Updated 6:17 PM ET Wed, 20 Feb 2019CNBC.com

Galaxy Fold

Samsung

Galaxy Fold

Samsung announced the first consumer-ready foldable smartphone Wednesday at a launch event in San Francisco.

The new phone, called the Galaxy Fold, has a special display that can fold open if you want to use it like a tablet. The new device will launch at a time when consumers are looking for innovative new features in smartphones to justify increased prices in the $1,000 range.

Samsung said that, when closed, the phone can easily fit in your hand like a traditional phone. But it also opens up into a large tablet for when you want to watch movies. You can also switch between screens on the fly. Samsung said that means, if you get an alert on the front screen, you can open into tablet mode and see the notification automatically in the app.

There are two batteries, one on each side of the fold, that allow the tablet to fold in half easier.

Both Samsung and Apple have seen their smartphone market share lose ground to companies like Huawei, which makes phones with similar features at a lower cost. Folding phones, which so far have only been shown as prototypes by Samsung and other companies like Xiaomi, could usher in a new wave of unique smartphone form factors that will excite customers to upgrade.

Samsung first unveiled a prototype of the Galaxy Fold in November2018, when it promised that a model people will actually be able to buy was launching “soon.” The Galaxy Fold runs a version of Google Android that automatically adjusts the software so that it works in both tablet and phone modes.

“You can simply unfold the device to get a larger tablet-sized screen,” Google Android’s vice president of engineering, Dave Burke, said in November. “As you unfold, the app seamlessly transfers to the bigger screen without missing a beat.”

It will launch in LTE and 5G versions beginning April 26 for $1,980.

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