Posts by Kevin Chupka
- Kevin Chupka at Breakout1 day ago
It’s a big week for the future of “television.” Popular TV streaming company, Aereo, is arguing for its life in front of the Supreme Court today and yesterday Netflix (NFLX) announced it would increase its subscription price by one or two dollars for new subscribers to help cover the fees they are paying Comcast (CMCSA) for the right to higher streaming speeds.
In short the war over how you receive and consume content is heating up. Technology that didn’t exist ten or even two years ago is now center stage and “old media” giants don’t like them playing on their turf.
What’s at stake?
What many forget is that the broadcast networks (like NBC, the one Comcast owns, for example) were essentially given life by the U.S. government in exchange for programming that benefited the public. As the medium evolved networks figured out how to make massive sums of money from the gift given to them. Powerful lobbyists were able to get laws tweaked to give the networks latitude to make even more cash.
- Kevin Chupka at Breakout8 days ago
It’s no secret that high flying names like Facebook (FB), Netflix (NFLX), Priceline (PCLN) and Amazon (AMZN) have had a rough go of it over the last month. Still, when it comes to shorting names like those nothing can hold a candle to Tesla (TSLA). According to the research firm Markit, Elon Musk’s electric car company was the most shorted name on the Nasdaq 100 over the past month. This from a stock that, despite recent troubles, is up close to 360% in the last year.
“It’s been highly shorted for a while and i think you need to look at the reason why these companies are shorted,” says Joe Fahmy of Zor Capital. “People aren’t comfortable when stocks make these big moves too fast.”
- Kevin Chupka at Breakout9 days ago
Stocks have been taking a beating and the dreaded “correction” has been tossed around a lot. There is one group of assets however that are squarely in the middle of their own bull market - metals. Sure, gold and silver grab all the headlines, but industrial metals can make for some great investment plays too.
Jonathan Hoenig of CapitalistPig.com weighed in on Breakout.
“Even in the first quarter of 2014 a lot of the commodities in general have been in legitimate bull markets,” he says before listing the likes of tin, nickel, zinc, copper, and lead as potential boons.
“Although they seem esoteric and out there,” Hoenig admits,”thanks to today’s world of ETFs there actually are ways that every investor can play what even a few years ago had been virtually inaccessible markets.”
The easiest way for investors to get into the industrial metals trade is through the Powershares DB Base Metals Fund (DBB) ETF.
- Kevin Chupka at Breakout9 days ago
High flying internet names like Amazon (AMZN), Netflix (NFLX) and Ebay (EBAY) have been brought back to earth of late, with share prices getting cut by multiple percentage points. Could a solid earnings season for names like these bring them out of the investing basement? Perhaps says Tom Lydon of ETFTrends.com.
“With the terrible weather everybody was in. Consumer goods companies are probably going to be in the toilet. People were home, they were shopping,” Lydon notes.
"I think what we’re gonna see is when earnings come out, nobody was buying cars, housing numbers were down, people weren’t in the store," he says. "Retail already has warned tremendously to the downside. But there’s a lot of continued activity on the internet. When you start to see these earnings come out that’s where the big demand is gonna be and I think.”
- Kevin Chupka at Breakout14 days ago
Thanks to new rules from U.S. regulators America’s eight largest banks must increase their leverage ratio to 5% from 3%, or about $68 billion dollars collectively. The aim of the new regulations is to force banks to be less reliant on debt, thus helping to prevent another financial meltdown.
According to officials most of the banks impacted are on schedule to comply with the new rules that go into effect at the end of 2017.
Many in the banking industry are crying foul citing that other banks around the world are not held to such strict standards. The Financial Services Roundtable, an American banking advocacy group, released a statement that said in part:
- Kevin Chupka at Daily Ticker16 days ago
It’s been easy to shrug off the U.S. sanctions against Russia as something that only impacts people half a world away. That could be changing. Anecdotal evidence suggests that wealthy Russians, who have become a big part of the luxury real estate market in places like New York and Miami, may be sitting on the sidelines while our two countries duke it out on the diplomatic stage.
Julie Satow, a contributor to The New York Times, took a closer look at the issue and told The Daily Ticker about a member of Russia’s parliament who “was looking for a $25 million-$52 million purchase and he sent [his realtor] an email after the invasion saying ‘I’m sorry. I’m pulling out.’” Related: Obama ruled out military engagement with Russia, but did the U.S. just move toward financial war?
The unidentified rich Russian isn’t the only one. Satow notes that anti-American propaganda runs rampant in Moscow and it may not be the best time for Russian citizens to flaunt the fact that they are making a big splash in the New York real estate market.
- Kevin Chupka at Breakout20 days ago
It may seem counterintuitive to classify the latest market rally as painful but for everyone sitting on the sidelines in cash it must have hurt to watch the tape tick higher. This “pain trade” goes back to legendary trader Jesse Livermore who posited that markets will move in whatever direction hurts the largest amount of people.
David Lutz of Stifel says we’re in the middle of the perfect example of Livermore’s theory. Since the 2014 low on the S&P 500 back at the beginning of February the index is up over eight and a half percent. Lutz cites a Reuter’s poll from around that low that said, “the 51 leading investment houses, the 51 smartest houses on the street...had cash at 20 month highs, they had bond holdings at four month highs [and] equity weighting at almost nine month lows.” So up the market went.
- Kevin Chupka at Breakout22 days ago
Within 24 hours of author Michael Lewis calling the stock market “rigged” on 60 Minutes every major Wall Street enforcement agency had stood up and proclaimed itself ready and able to start cracking heads. They sounded off in print, television and whatever passes for radio today. Apparently unsatisfied with the degree to which they were being taken seriously the FBI told CNBC’s Eamon Javers it was seeking tips from traders with information regarding HFT:
It’s unclear who how or why anyone with information about HFTs would use an 800-number to contact the FBI but no stone is going unturned in the effort to put an end to illicit computer trading.
Beyond sniffing a headline opportunity the government can’t have the financial center of the world called rigged without rising to the challenge. Heads will roll because the public needs to be assured Wall Street is not in fact rigged.
In the attached video Lee Munson of Portfolio LLC welcomes the show of regulatory force, but warns investors against thinking Wall Street has suddenly become a safe place for investing naifs.
- Kevin Chupka at Breakout23 days ago
As pitching mounds and home plates become active again this week in Major League Baseball stadiums across the country many of the heaviest hitters and fastest pitchers are playing under new, very lucrative, contracts.
Miguel Carbrera of the Detroit Tigers has just inked an extension that will earn him $292 million over the next ten years. Mike Trout of the Los Angeles Angels of Anaheim signed his own extension last week for six-years and $144.5 million and during the off-season Los Angeles Dodgers' pitcher Clayton Kershaw became the first major league player to sign a contract that averages $30 million a year. That makes him the highest paid player in terms of average annual income over the course of his contract, even if not the highest paid player this season (technically, Kershaw's salary is only $4 million in 2014 but with an $18 million signing bonus and raises to up to $33 million a year through 2020, his earnings average out to a little over $30 million a year).
With the average American pulling in $24 an hour Breakout decided to break down just what these major leaguers are making per hour.
- Kevin Chupka at Breakout23 days ago
A federal judge ruled Friday that alleged collusion between tech giants like Apple (AAPL), Google (GOOG), and Intel (INTC) will be going to trial. The story goes that between 2005 and 2009 some of Silicon Valley’s biggest companies had a tacit agreement not to hire each other's engineers. As a result engineer wages were kept low, saving all the companies involved a lot of cash.
The companies were in court last week trying to delay or cancel a civil court case set to begin May 27. The trial and eventual verdict could impact as many as 64,000 workers who were employed at Apple, Google, Intel and Adobe (ADBE) during those five years.
Josh Brown joined Breakout to weigh in on the growing scandal. He thinks the whole thing is a bit overblown.
“To wring your hands over ‘oh my God it’s so terrible that Apple and Google are fighting over engineers'...I mean it’s a very minor issue," he says.
He notes that Wall Street operates in similar ways.