Market 2018-04-12 (Banks, Costco, BBBY and more)

Market has a rally after Trump twittered "Never said when an attack on Syria would take place. Could be very soon or not so soon at all!" Stupid idiot as always.

Banks lead the rally as earnings season kicks off tomorrow (C +3.2%, JPM +2.5%, WFC +1.5%). XLF +1.8%. Semiconductor sector continues to fight back, SOXX +1.9%.

However, volume remained light with just 746M shares changing hands at the NYSE vs. the 50-day moving average of 953M shares, and some late selling dragged the major averages off their session highs to finish near the middle of today's ranges. The light volume indicates weakness.

U.S. Treasury prices fell across the curve, pushing yields higher: 30-year -0.62%. 10-yr -0.35%. 5-yr -0.25%. Utility XLU -1.3% and REITs IYR -0.9%.

Crude +0.43% to $67.11. Gold -1.64% to $1,337.70.

OPEC says its crude oil production fell last month to the lowest level in a year as it complies with its supply cut agreement, but the world’s total oil supply continues to rise due to U.S. shale growth. OPEC also raises its global oil demand forecast for this year by ~30K bbl/day from last month’s estimate, now forecasting growth of 1.63M bbl/day and total consumption of 98.7M bbl/day.

The U.S. needs to invest $150B in infrastructure to support growing natural gas production, with some producers facing shutdowns as they try to increase output, says Tellurian (TELL +4.2%) Senior VP Amos Hochstein. Shale oil producers, including those in the Permian Basin, “are reaching a point where they have to make a decision whether to restrain their production in oil because they don’t have the ability to evacuate their gas.”

Winner

Costco's (COST +2.3%) net sales grew 10.9% Y/Y to $12.92B in March. Comp sales +8.6%. U.S. +8.3%, Canada +7.1%, Other international +12.3%. Stifel analyst Mark Astrachan says the Costco value proposition is "winning with consumers" in the U.S. and abroad. He also thinks Costco is coexisting just fine amid competition from Amazon and Walmart.

DAL's mixed ER (DAL +2.9%) leads airlines higher. JETS +2%: LUV +2.7%, UAL +1.9%, AAL +2.6%.

BlackRock (BLK +1.5%) after reporting ER beats.

Chicago Bridge (CBI +9.5%) jumps on preliminary first quarter results for 2018: revenue of $1.7B-$1.8B and net income of $37M-$43M.

Semiconductor sector: MU +4.2%, NVDA +3.7%...

Hotels continues to rally as well.

Losers

Bed Bath & Beyond (BBBY -20%) plunges after disappointing guidance. LB -4.6%.

Mall/shopping center names are lower across the board. CBL & Associates (CBL -2.7%), DDR (DDR -2.3%), GGP (GGP -1%), Kimco (KIM -2.2%), Kite Realty (KRG -2.2%)...

 LB -4.6% although the company reported sales rose 7% to $1.02B in March.

 Chinese internet companies are mostly down: YY -1.4%, MOMO -5.4%, WB -1.1%, NTES -2.1%, SINA -1.7%. The recent decline is related to tighter media regulation in China. Several high flying media startups and YY peers (Kuaishou, Toutiao) have seen some of their popular portals/hosts banned for inappropriate content.

My Trades Today

Sold NVDA @ $232
Sold half TELL @ $8.7
Sold half C @ $72.2

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