Earnings are going very well.
While there are plenty of misses in companies you probably don't care about (ABCB, ASTE, BANC, EDU, FCF, FBC, IRDM, MLI, PII, SHW and WAT missed just this morning), there are plenty of beats from large-cap companies you probably do care about like DGX, HOG, HAS (by a mile), JBLU, KO, LMT, NTRS, PG, PHM, STT, TRU, TWTR (by a mile) UTX and VZ – all from this morning.
Of course large caps are benefitting from tax breaks and buybacks but, as a shareholder, money (per share) is still money so up and up we go. This is why we still have our longs – FOMO continues to be a thing and it doesn't matter that a stock is already high in anticipation of earnings – good earnings take them up anyway. We're still adding hedges on the way up but it's silly to close down too many positions if the market is determined to break out to new all-time highs.
One thing that is too high is Oil (/CL) Futures at $66 – that's a good spot to put our foot down and play for the short but be very careful around inventories tomorrow (10:30, EST) – as they can move us pretty violently but $66 is a good stopping out line, so a good place to short with tight stops above.
Generally, with our /CL trades, as soon as we make $500 we try to lock in $350 and then $500 at $700, etc – a $1,000 gain ($1 in price) on a single move is not something you often catch though, as you can see – it happened TWICE on Friday night with an over $2 move from $64 to $66.
For bigger companies and commodities, weak Dollars are a benefit and the Dollar was generally weaker in Q1 than it was in Q4 and that's giving everything a boost but we may be heading back to the top of that range (98) as the UK is back in turmoil mode – with Theresa May very, very close to being forced to step down – perhaps as soon as next week. That would be Pound/Euro negative and Dollar-positive.
And poor Elon Musk seems to have lost his ability to fool all of the people all of the time as Tesla, last night, rolled out what Musk called the "Best Chip in the World" and promised to sell 1M cars in 2020(they haven't sold 200,000/yr so far) WITHOUT LiDAR (which everyone else uses and Musk calls "a fools errand") AND Musk claims the cost of operating a self-driving Tesla will be 0.18/mile vs $2-3 traditional costs.
Well, fantasies like that should make UBER and LYFT shareholders very happy but TSLA's stock is selling off this morning as Musk's nonsense is finally starting to sound like nonsense to his long-suffering shareholders.
Tesla has promised that eventually, they will create a ride-hail service (similar to Uber in appearance) where the private cars of Tesla owners provide the rides in autonomous modes, making money for that owner. ie. you would declare that you don't need your car for the next 5 hours, and it would join the network, and scoot off to give rides, then return to you.
We'll see how this shakes out but, with TSLA earnings on Thursday – they'll be very lucky to see $300 again – even with great earnings and another miss can send them below $250 for the first time in years.
Be careful out there!