Your Eyes On This

Hey Influence Traders,

In tonight’s live event with my Power Moves trading partner Andrew Giovinazzi, we’re going to reveal how we go behind the headlines to produce trades that are yielding profits of 100%, 155%, 400% and even 530%.

>> REGISTER HERE FOR TONIGHT’S EVENT. <<

In fact, something happened last night that has me on alert.

Bi-Partisan Infrastructure Vote

Seventeen Republican Senators voted with all 50 Democrats in the Senate  to start the debate process on a $550 billion bill aimed at transportation, broadband and utilities.

This is by no means the final hurdle, but it does give President Biden a bit of momentum.

Senate Majority Leader Chuck Schumer will have to keep at least 10 Republicans on his side, while Houseco-hort Nancy Pelosi will need to appease the AOC’s of the world, who are going to be upset with the bill’s “small” number.

Looming over this squabble is the Democrats $3.5 trillion spending bill that covers everything from childcare to climate change.

That’s a potential $4 trillion dollars combined, and even if just half of that is approved, imagine the massive money flows coming out of DC.

Predicting where that cash is heading and pairing profitable options trades with those ideas is what a secret project that Andrew Giovinazzi and I have been working on is all about …

You can get full details on it — and the gains we’ve made — when you register for tonight’s LIVE event.

See you at 8 p.m.!

Cutting Through the Noise for You,

Frank

 

A Tuesday Quicky

Hey Influence Traders,

I’m getting geared up for the personal hedge fund-fund building event that Andrew Giovinazzi and I are hosting this week.

So I’m going to keep this short and sweet.

The Launch

Hedge funds make big returns and hedge fund managers earn big checks.

But for investors, the enormous fees hedge funds charge suck.

What if, though, there was a way to trade like the big funds without shipping your cash out the door like an all-in May 7th Bitcoin (Ticker: BTC) trade.

To find out, join me and Andrew this Thursday at 8 p.m. EST as we reveal three huge hedge fund secrets that could send you to the high seas …

      • Secret 1. The Hedge Fund Info Advantage: What the funds know that you don’t … and HOW they know it.
      • Secret 2. Pulling the Profit Lever: How hedge funds turn their knowledge into MASSIVE profits.
      • Secret 3. Timing the Gain Train: How hedge funds know exactly when to enter/exit trades.

Plus receive a copy of Option Pit’s new Hedge Fund Secrets Checklist!

All you have to do is:

>> REGISTER HERE AT NO COST <<

Speaking of BTC …

There has not been a lot of good news for BTC of late.

It popped over the weekend, but pulled back a little yesterday.

New Jersey’s pension fund announced that it invested $7 million in BTC mining stocks.

One River Asset Management, which holds $600 million of BTC, has filed with the SEC for a carbon neutral BTC ETF.

One River is advised by former SEC Chairman Jay Clayton, who previously rejected others’ BTC ETF applications.

But some good news is flowing. Some “solid” rumors are circulating that Amazon (Ticker: AMZN) is looking to launch BTC and crypto payments by the end of the year.

It is also rumored that AMZN could launch its own token by 2022.

While none of this news portends BTC going to the moon, it does help create price support and does not hurt the trading volume of Coinbase (Ticker: COIN).

PowerMoves Portfolio Roundup

We closed out our Cleveland Cliffs (Ticker: CLF) Aug17.5/12 puts spreads for a 50% gain on credit and a 5% gain on risk.

The live updated trade log is here

Cutting Through the Noise for You.

Frank

 

Steely-Eyed Trading

Hey Influence Traders,

Like clockwork, it’s once again the weekend!

Weird how that works.

I, for one, had an awesome week – I attended a charity event to raise money for veteran suicide awareness and got to break bread with Medal of Honor recipient Clint Romesha.

Clint is a great guy helping with a great cause. Check out the movie “The Outpost” to see his story.

Highlights

      • The Olympics kicked off, with a team almost as impressive as the A-Team the Biden administration is putting together. (In this instance, A stands for antitrust.)
      • Big News for Bitcoin (BTC) – the Crazy Horse 3 strip club in Las Vegas announced that it is now accepting BTC payments through the Lightning Network for “VIP bottle package.” Or as I like to call it, the “Russian Oligarch Package.”
      • DC is taking dysfunction to all new levels.
      • The steel market is up; the debt ceiling is not … yet.

Trading Like a Hedge Fund

I’ve been telling you for a while that trading guru Andrew Giovinazzi and I have been building a #PowerMoves surprise for you.

Well, it’s here.

I’m a fan of the way hedge funds operate …

Sure, they get bashed in the press sometimes, but let me cut through the noise:

      • Hedge fund assets under management grew to more than $4.1 trillion at the end of Q1, a new record.
      • In 2020, the top-25 hedge fund managers made a combined $32 billion.

Bottom line: There is staggering wealth to be had using the same techniques employed by hedge funds …

And here’s a little secret – Andrew and I run the PowerMoves Portfolio that way.

This Thursday at 8 p.m. EST, we (along with OptionPit CEO Mark Sebastian) are going to show you how to do it in our all-new live webinar:

Hedge Fund Secrets Revealed: How They Do It. How They Profit. And How YOU Can Too.”

Andrew and I are going to crack open three HUGE industry secrets that can transform your trading forever:

      • Secret 1. The Hedge Fund Info Advantage: What the funds know that you don’t … and HOW they know it.
      • Secret 2. Pulling the Profit Lever: How hedge funds turn their knowledge into MASSIVE profits.
      • Secret 3. Timing the Gain Train: How hedge funds know exactly when to enter/exit trades.

PLUS all attendees will receive a FREE copy of Option Pit’s new Hedge Fund Secrets Checklist.

>> USE THIS LINK TO REGISTER NOW <<

See you there!

DC Dysfunction

We had a ton of bickering this past week in DC (shocker!).

January 6th Panel

House Republican leadership pulled all of their reps from Nancy Pelosi’s January 6th commission (you’d think someone in Pelosi’s office tested positive for COVID … oh, wait …).

Just to continue needling Republicans, and to apparently make the panel look even more biased than it already does, on Saturday, Speaker Pelosi appointed a second Republican on her own to sit on the panel, Rep. Adam Kinzinger from Illinois, a fierce critic of former President Trump.

He joins Rep. Liz Cheney of Wyoming, also appointed by Pelosi, and someone who loathes Trump, as the only two Republicans on the committee.

Infrastructure Vote

Chuck Schumer got shellacked in his initial vote on the bipartisan infrastructure bill (it’s almost as if he took a knee prior to the vote).

BLM Appointee

The Senate Energy and Natural Resources Committee on Thursday voted along party lines to advance President Biden’s controversial nominee to head the Bureau of Land Management, Tracy Stone-Manning.

While never formally charged, Stone-Manning has had ties to eco-terrorist events which Republicans believe should disqualify her.

Her nomination now goes to the full Senate.

Debt Ceiling

And the end of the week did not disappoint, as a new topic was raised – the debt ceiling!

In order to pass their $3.5 trillion spending measure, which is short on payment details, Democrats will need to raise the debt ceiling by October or November.

But Republicans are digging in saying that they will not lift a finger to help Democrats raise it, and that it’s up to Democrats to figure out how to avoid a federal default.

Ah, kids!

Treasury Secretary Janet Yellen jumped into the fray and urged Congress to raise the limit as soon as possible or risk “irreparable harm to the U.S. economy and the livelihoods of all Americans.”

Here’s a little secret – it’s all games.

This nonsense happens every two years, and they always end up raising it or finding a compromise plan.

No one wants a federal default.

But strategically, it makes no sense for Republicans to discuss raising it until after the spending bills are negotiated.

It gives them leverage in the negotiations.

So, what is the debt ceiling anyway …

It’s a limit that Congress imposes on how much debt the federal government can carry at any given time.

When reached, the U.S. Treasury cannot issue any more Treasury bills, bonds, or notes. It can only pay bills as it receives tax revenues.

If tax revenue isn’t enough, the Treasury must choose which bills to pay (e.g., federal employee salaries or the interest on the national debt).

While it happens every few years, the government is in a particularly tight spot this time around, and will probably run out of cash in the fall, which will lead to delayed payments, defaults on debt obligations — or both.

Fortunately for the Treasury, the government writes its own rules. 

The debt limit was suspended for two years under President Trump in 2019, but that suspension expires on July 31.

The debt ceiling, which was $22 trillion when the limit was suspended, now sits at $28.5 trillion because of additional borrowing.

On August 1, 2021, the limit will reset to $22 trillion, and Republicans don’t want to borrow more to pay for the $3.5 trillion partisan “human” infrastructure bill.

Taxes

Republicans want to leave it up to the Dems to figure out how to manage and pay for their spending.

But one thing that Republicans are opposing is Biden’s proposal to change how capital gains are taxed.

Biden has called for taxing capital gains at death, which they currently are not.

Many believe that such a move would hurt family-owned businesses and farms, despite Democrats’ promises to include protections for such.

Moreover, when heirs sell an asset, they are taxed on a “stepped-up basis,” which means they have to pay capital gains taxes on the difference between the value of the asset when it was sold and the value of the asset when they received it (not on the difference from when it was originally purchased).

Biden wants to end stepped-up basis for capital gains in excess of $1 million per person and tax those gains at death.

Team Antitrust

President Biden named Jonathan Kanter to lead the Justice Department’s antitrust division.

Kanter spent years as a lawyer fighting Facebook (Ticker: FB) and Alphabet Inc. (Ticker: GOOGL) Google on behalf of rival companies.

If confirmed by the Senate, he will join Lina Khan, the spiritual and academic head of the antitrust coalition, who now leads the Federal Trade Commission, and Tim Wu, the special assistant to the president for technology and competition policy who has long argued for breaking up FB and similarly large companies.

This trio should put Big Tech on notice. Despite having created a collective zero amount of wealth themselves compared to the trillions created by Big Tech, they are going to come gunning.

Last month, a federal judge threw out an FTC suit against FB, which has them reeling like a first-round Olympic soccer loss and looking for retribution.

Khan plans on refiling the suit soon.

The Power Moves Portfolio

Andrew and I run a portfolio approach to trading options with stocks that have good long-term prospects based on the ripples that I see flowing from K Street to Wall Street. (I am a former DC lawyer and Wall Street exec, by the way.)

Pair that with Andrew’s options expertise, and it is a powerful combination … an information advantage that other traders just don’t have access to.

With that in mind, I’ve been a big fan of Cleveland-Cliffs (Ticker: CLF)

      • They are U.S.-based, which plays into Biden’s buy America plans.
      • Their CEO is highly regarded.
      • They’ve been managing their balance sheet well and have made smart, strategic acquisitions.
      • The company reported Q2 net income of $780 million on revenue of $5 billion.
      • A year earlier they ran a loss of $124 million on just $1.1 billion in revenue.

When the infrastructure bills are finally passed, CLF will see its contract prices for steel rise with demand. 

And as CLF noted in its most recent quarterly report:

      • “Steel demand remains excellent and, as we continue to negotiate our contract businesses with several clients in different sectors, it is progressively translating into substantially higher contract prices later this year and into 2022.”
      • “Our team has done a remarkable job in meeting the demand for steel we have been experiencing over the past six months, overcoming the impact of the automotive chip shortage as well as limited rail and truck availability.”

That news and analysis caused Andrew to jump all over CLF.

      • Andrew looked at CLF and decided that it’s a name that he wants to “buy on a solid dip.
      • He sold some CLF Aug. 20 12/17.5 put spreads at $.45 after the earnings report.
      • He played too close to the fire during the last cycle, selling the 21 puts, so he figured selling the 17-strike was a better area. And it was!

Also of note, our Coinbase (Ticker: COIN) flies are in and out of profitability and they are likely to get reduced by half since there is no trend. The saving grace has been the fly has held its value on some steep $25 adverse moves.

The live Power Moves Portfolio trade log is here

And the portfolio is currently up more than 11% overall since launching in April.

Cutting Through the Noise for You.

Frank

 

Games, Games & More Games

Hey Influence Traders,

The gamesmanship and partisanship in DC are peaking like meme stocks!

But for those of you who don’t think that DC can move quickly, particularly when it smells revenue in the water, just one day after Jeff Bezos’s flight into space there was talk of taxing commercial space travel.

Rep. Earl Blumenauer (D-Ore.) is introducing a bill that would establish excise taxes on commercial space flights with human passengers that aren’t focused on scientific research.

The two-part bill would create a per-passenger tax on the price of a flight to space and create a two-tiered excise tax for each space launch:

      • One tier for flights between 50 and 80 miles above the Earth’s surface
      • A second tier — with a higher tax — for flights that exceed the 80-mile threshold

Can’t make this stuff up.

January 6th Commission

A January 6th Commission (as partisan and pointless as it is) was put together to investigate the breach of the Capitol … and then the Republicans pulled out.

Speaker of the House Nancy Pelosi granted the Republicans five of the 13 seats on the commission.

But she then refused to seat two of House Minority Leader Kevin McCarthy’s picks, Reps. Jim Jordan and Jim Banks.

In retaliation, McCarthy yanked all of his picks in protest.

Pelosi has vowed to move forward with her eight picks, one of which is Republican Liz Cheney.

That should help create incredible and unprecedented unity on the Hill.

Or not.

Infrastructure Bill

Senate Majority Leader Chuck Schumer pushed forward with an initial vote on the bipartisan infrastructure bill.

He lost.

Or did he…

Republicans suggested that he postpone the vote to allow more details on the bill to come forward or they’d block him.

He didn’t listen.

They blocked the bill.

Schumer went 0-for-50 with Republicans.

But the vote was actually 49-51, well short of the 60 votes needed to pass.

Wait, 51 against?

In a bizarre last-second move, Schumer himself sided with all the Republicans to create a procedural loophole that will allow him to bring the same bill up for a new vote more quickly than if he’d voted for it.

It will be interesting to see if Democrats take another shot at bringing this bill for a vote (my sources say Schumer will do that next week).

The other option is that Democrats use this as an excuse to push heavily on the $3.5 trillion partisan spending bill by claiming that they are unable to work with Republicans.

It might be the impetus that Democrat leadership needs to push Joe Manchin over the edge and agree to kill the filibuster.

Power Moves Portfolio Roundup

My trading partner Andrew Giovinazzi has made some #PowerMove trades into Coinbase (Ticker: COIN) and Ford (Ticker: F).

In May he made trades on F that have generated a 66% return to date.

In June he started trading around COIN and has generated an 80% return to date.

The live updated trade log is here

And BIG news coming soon for the #PowerMoves portfolio.

Cutting Through the Noise for You.

Frank

What Goes Up, Must …!

Hey Influence Traders,

I’m going to go on an old-fashioned Tuesday Rant.

But first … Billionaires at play!

Jeff Bezos, the world’s richest person, took off in a capsule built by his rocket company, Blue Origin, and headed more than 62 miles above West Texas.

That’s 12 miles higher than fellow billionaire Richard Branson went last week.

Yes – he came back down.

Boys and their toys!

Markets

The traditional and crypto markets all had a major smackdown.

The word on WallStreet is that the markets are concerned about the rebound from the coronavirus recession.

K-Street put the blame squarely on the Delta Variant and the unvaccinated … which is wildly misunderstood.

Whose Misinformation is Misinformation?

Ok, here comes my rant!

The White House continues to push for full vaccination.

The media has termed the Delta Variant a killer.

But the stats … and more importantly, the wording … are misleading.

Yes, the Delta Variant is more transmissible, but like with all other previous viruses that have mutated it is a less severe form of the virus.

And yes, the majority of people contracting the virus currently are unvaccinated, but almost exclusively unvaccinated who have not previously had COVID.

It appears that natural immunity is the best immunity … or at least on par with vaccinations (a recent study has shown that natural immunities are more effective against more strains since the vaccinations tend to target a particular strain and not the broad virus).

And all of that helps drive herd immunity … why natural immunity is being discounted and pushed under the rug is beyond me.

Everyone has an agenda, so you need to read into the data that is being used to drive those agendas.

The Selloff and the Rebound

This was the steepest selloff since January, and was driven by a lack of faith in stocks reliant on consumer activity, such as travel companies.

Some pharmaceutical stocks balanced out the declines.

The Dow lost 725 points (2.1%), with airlines, cruise lines, construction firms, energy producers and financial services companies leading the decline.

The S&P 500 fell 1.6%, and the Nasdaq 1.1%.

The good news is that the futures are looking good for stocks today.

Crypto

Bitcoin (Ticker: BTC) broke through the well-watched support level of $30,000.

Some prognosticators are looking at $25,000 as the bottom, but this slide is real.

This crypto implosion comes as Senator Elizabeth Warren indicated that legislation may be needed to give the Securities and Exchange Commission (SEC) the authority to regulate cryptocurrency exchanges.

She sent a letter to SEC Chairman Gary Gensler last week asking him if “Congress needs to act to ensure that the SEC has the proper authority to close existing gaps in regulation that leave investors and consumers vulnerable to dangers in this highly opaque and volatile market.”

She’s bored … it happens … and that’s dangerous for a serial regulator.

Warren argued that “The increased use of cryptocurrency exchanges presents unique risks to consumers. Although they describe themselves as cryptocurrency ‘exchanges,’ these platforms lack the same types of basic regulatory protections as traditional national securities exchanges like the New York Stock Exchange or Nasdaq.”

Crypto markets do not like talk of regulations.

K-Street Battle Royal

Senator Chuck Schumer plans on starting a Donnybrook tomorrow as he presses for the Senate to take up the bipartisan infrastructure bill.

The vote on Wednesday is a vote to begin debate on the bill – it’s pretty standard.

But some Senate Republicans have vowed to block it from moving forward.

To get it passed, Schumer needs 60 votes, including the support of at least 10 Republicans.

It is called a “vote on cloture.”

The bill is just a shell into which senators will then swap the text of the bipartisan deal once it is finished.

Republicans are feeling snubbed on the process, particularly regarding the larger partisan bill, and are skeptical of the spending on non-economic issues.

The bill comes at a time when Democrats are having a tough time selling their economic vision.

They have put forth a number of massive spending bills, have not defined what they will do for the economy, and have given little guidance on how they plan to pay for them.

That formula does not make for a coherent message that they can sell to the American people.

Some Additional Taxes

In addition to traditional tax plans that have been floated – taxing the rich and corporations – Democrats are eyeing a tax on imports from countries that don’t have strong policies aimed at combating climate change.

An “unnamed source” said that the partisan $3.5 trillion Democrat budget deal would propose “polluter import fees.” What those are was not defined.

The European Union has also stated that it will propose carbon border taxes.

The goals of the tax and spend climate policies are to meet President Biden’s objective of 80% clean electricity and a 50% reduction in carbon emissions by 2030.

Democrats also indicated that they want to tax polluter imports.

Sen. Chris Coons (D-Del.) and Rep. Scott Peters (D-Calif.) have introduced legislation that would levy an import fee on goods including aluminum, cement, iron, steel, natural gas, petroleum, and coal starting in 2024.  

Pursuant to the bill, the list of products subject to the fees will be expanded as the U.S. determines the carbon intensity of producing various types of items. 

The fee would be determined based both on the greenhouse gas emissions that occur during the item’s production and annual U.S. estimates of costs incurred by companies to comply with American environmental laws.

Despite these moves, many climate change advocates are expressing disappointment that the $3.5 trillion budget does not do enough to combat global warming.

Truth bomb: no amount will ever be enough for the “advocates.”

The progressive Sunrise Movement pushed for a $10 trillion deal and Budget Committee Chairman Bernie Sanders proposed $6 trillion. 

Scarily, Sanders is gaining more influence with his Senate colleagues … or at least that’s what the media tells us.

Cutting Through the Noise for You,

Frank


“Electric Budgets”

Hey Influence Traders,

It’s not just the Weekend – it’s my birthday weekend!

My wife made a #powermove and threw me a big one.

I had surprise guests, surprise dinners, golf, and midnight karaoke at a great Korean bar.

And last week, we saw a big #powermove as Mark Sebastian, Andrew Giovinazzi, and Bill Griffo teamed up for a special “triple threat” mentorship event.

Not only did they release five exciting trades, but they also offered a pretty incredible opportunity to attendees … you can see more about it here.

I am definitely going to need to recharge the batteries after the past few days.

EV Acceleration

Speaking of batteries, Nissan Motor Company (Ticker: NSANY), the largest auto manufacturer in Japan, has joined a growing list of carmakers to accelerate the move to electric vehicles.

CEO Makoto Uchida said “the pandemic has made us more conscious of the future – there’s an increased focus on climate change. While electrification has been a significant trend in the automotive industry, the pace has been accelerated recently.”

Audi AG (Ticker: AUDVF) recently announced that it will go all electric by 2026.

Between budgets in the US pushing for more EV adoption and the European Union pledging to be fossil fuel free by 2050, I’m going to keep an eye on NSANY and AUDVF.

DC Moves

The Senate unveiled a $3.5 trillion budget proposal that, if passed, will reshape the government’s role in some parts of the economy.

President Biden believes that the $3.5 trillion budget proposal is necessary to rebuild the American middle class, lift people out of poverty, and address climate change by:

      • Adding years of guaranteed public education to fight inequality
      • Lifting more women into the workforce with subsidized child care and paid leave
      • Sending monthly checks to parents to reduce child poverty
      • Expanding Medicare beyond Biden’s own health care proposals to include dental and vision coverage
      • Imposing massive taxes on corporations, high earners, and the greenhouse gas emissions that drive climate change

The proposal is still short on many specifics. For example, to address climate change, Democrats want to tax imports from countries that don’t have strong policies aimed at combating climate change. They are calling it a “polluter import fee” but did not give any specifics on its application.

The scope of the proposal, particularly the poverty and climate provisions, shows the growing influence of Senator Bernie Sanders who is chairman of the Senate Budget Committee.

He wants to make some portions of the bill, like sending monthly checks to parents, a permanent feature of the government.

The lack of clarity on the details, including how much of it will be paid for, further shows Sanders’s influence.

The $3.5 trillion proposal is one part of the $4 trillion economic program that the President is trying to get passed.

The other entails spending nearly $600 billion to upgrade roads, bridges, water pipes, broadband, and other physical infrastructure. 

The President has reached a tentative agreement with a bipartisan group of centrist senators to move that through. I’m monitoring that too to see who will benefit the most.

The Power Moves Portfolio

Andrew made a small adjustment to our Palantir Technologies Inc. (Ticker: PLTR) trade idea.

The July 23 23-strike calls went to $0.10, so our short leg went out worthless, which is good.  We took the credit from those calls and bought five PLTR July 30 20-strike puts for $0.32. 

The plan is to close the puts if the market sells off. PLTR can have steep drawdowns, and we want to be ready. If PLTR rockets, we are naked long the Aug. 06 21-strike calls.

This week we bought:

Four PLTR July 23/Aug. 06 21/23-strike diagonal call spreads for $1.50.

I like PLTR as a long-term hold, but the stock is very “range bound” so Andrew is using a diagonal call spread to generate some income dollars before earnings. We’ve found when trading this name that waiting for pullbacks is the best play, and PLTR is currently $5 off of recent highs.

I’ve also been eyeing several other big cyber security names. Ping Identity Holding Company (Ticker: PING) looks like a good candidate for cheap options. If the PLTR plays pay, we’ll most likely roll into PING.

 

PLTR 6 month price and volatility chart

The live updated trade log is here.

And BIG news coming soon for the #PowerMoves portfolio.

Cutting Through the Noise for You.

Frank Gregory

We’re Gonna Have a Good Time!

Hey Influence Traders,

We had some big news out of D.C. yesterday, with a possible $3.5 trillion (with a “T”) spending deal put forth.

That’s going to finally bring some traditional and green infrastructure spending to the plate.

Birthdays

But first, today is July 15, and some famous people were born on this day, including Rembrandt van Rijn, the Dutch painter.

But as the Beatles said – It’s my birthday too, yeah!

Which it is, and Option Pit CEO Mark Sebastian, Director of Education Andrew Giovinazzi and Head Income Trader Bill Griffo are ensuring that “We’re Gonna Have a Good Time.”

Were in a low for the VIX cycle — and we are only heading lower.

But those three traders with nearly a century of combined experience are on your side.

Join them LIVE today at 11:30 a.m. for a …

Mentor Trio event — and you can register for free right here.

Last Friday they did a successful all-hands on deck event (6-for-6 in profitable trades), and they want to give even more instruction and insights.

Yes we’re going to a party party

Yes we’re going to a party party

Yes we’re going to a party party

July 15th Birthdays

  • Rembrandt, pretty good painter
  •  
  • Clement Clarke Moore, author of “T’was the Night Before Christmas”
  • Edward Shackleton, English explorer
  • Jan-Michael Vincent, actor
  • Linda Ronstadt, American singer (did you know her original back-up band became the Eagles?)
  • Jesse Ventura, professional wrestler, actor and former governor of Minnesota
  • Johnny Thunders, punk rock guitarist for the New York Dolls
  • Forest Whitaker, actor
  • Brigitte Nielsen, actress
  • Frank Gregory, Option Pit DC and Wall Street insider

CPI to the Moon

Consumer prices rose 0.9% in June, according to data released this week by the Department of Labor.

The consumer price index (CPI), a closely watched gauge of inflation, increased to an annualized rate of 5.4% last month.

That blew away the anticipated 0.5% consensus estimates and followed a 0.6% jump in May.

June’s was the largest recorded since a 1% percent increase in June 2008.

Spending

Despite the economy going vertical, President Biden and Senate Democrats outlined a path forward on two infrastructure bills — one bipartisan and one with only Democratic support.

That meeting followed Senate Majority Leader Chuck Schumer and Sen. Bernie Sanders announcing they had reached a deal on a $3.5 trillion Democratic-only package.

The Dem-only bill includes spending on health care, family care, education and climate initiatives that was left out of the bill backed by 20 bipartisan senators.

Democrats intend to pass the Dem only $3.5 trillion deal via the budget reconciliation process with support from all 50 Democratic senators

Sen. Joe Manchin, who had been the lone holdout on the Dem side, appears to have capitulated after saying earlier in the week that he opposed the measure.

Surprisingly, no mention was made of tax measures needed to pay for the bill, but the word on K Street is that it will include tax reforms to the corporate and international tax codes, as well as more intense enforcement.

There is Republican whispering that some may withhold their support for the bipartisan deal, given this new wrinkle.

The Dem proposal has a heavy focus on climate change, including:

  • A proposed tax on imports from nations that lack aggressive climate change policies
  • A mechanism known as a clean electricity standard that would require power companies to gradually ratchet up the amount of electricity they generate from wind, solar and other sources until they’re no longer emitting carbon dioxide
  • Tax breaks for wind, solar and other renewable energy, as well as electric vehicles
  • A “methane reduction fee”
  • Funding for a civilian climate corps, modeled after New Deal-era programs, to create jobs in addressing climate change and conservation

EV Charging Stations

The infrastructure bill proposed earlier this year contained money for renewable energy. 

This proposed bill amped up that original call.

That means money will go to the production of electric vehicles and the infrastructure needed to support them.

Electrify America, which is owned by Volkswagen Group of America (Ticker: VWAGY), just announced the doubling of its charging network through 2025.

They want to get 10,000 chargers into 1,800 fast-charging stations in the US and Canada.

VW has committed to transition to EV by 2035 …

And with this infrastructure buildout, it now has the top fast-charging network open to all electric vehicles in the US.

VWAGY is already the largest open DC (direct current) fast-charging network in the U.S. and, according to its president, the “Boost Plan” will “double … current charging infrastructure in North America over the next four years.”

EV is coming to a corner station near you!

Cutting Through the Noise for You.

Frank

Tech Assault!

Hey Influence Traders,

Big Tech has been on a big roll since, well, forever.

But public and private entities alike are gunning for our new-age overlords …

The Biden administration wants to break up the digital oligarchy.

Russia and China want to crack it.

The G20 wants to tax it.

Will Big Tech survive?

The Vegas oddsmakers say …

That I’ve lost count of how many times the CEOs of Facebook, Google and Twitter have been called to testify in front of Congress.

They are under the gun for, among other things, issues of antitrust and cybersecurity … and taking advantage of tax havens.

Antitrust Action

A federal judge recently threw out antitrust lawsuits brought against Facebook (Ticker: FB) by the Federal Trade Commission (FTC) and more than 40 states. (That’s 80% of them!)

The judge denied the argument that FB holds a monopoly over social networking, saying prosecutors failed to provide enough facts to back up that claim.

But the crux of the decision was that the states waited too long to bring their case — which centers on deals made in 2012 and 2014 — not on the merits of the antitrust claims.

The door is open for the FTC to try again.

President Biden badly wants to emulate FDR on antitrust — and he has built a team to make it happen.

Team Antitrust

Biden believes FDR’s focus on antitrust enforcement helped usher in an era of entrepreneurship and small-business growth.

And he’s making moves in the form of aggressive personnel.

The new U.S. Attorney General, Merrick Garland, has pledged to “vigorously” enforce U.S. antitrust law.

Throw in Lina Khan and Tim Wu and you have the makings of an antitrust tech tsunami.

Former Columbia Law professor Lina Khan now heads the Federal Trade Commission. She was a leader in the progressive movement known as “hipster antitrust,” which calls for new ways of reviewing companies’ market control, including how that affects people’s “roles as citizens.”

Kahn is a staunch antitrust advocate and her nomination signals an intent by the administration to be aggressive on enforcement. She has been known to call out Amazon (Ticker: AMZN) and other major tech platforms and has actively advocated for an overhaul of competition law.

She is paired with her Columbia Law colleague, Tim Wu, who was recently named to the National Economic Council and who has been vocal about attacking consumer welfarism in antitrust.

Exec Order Muscle

And President Biden has Kahn’s back.

He recently signed a broad executive order promoting competition through 72 initiatives cracking down on anti-competitive practices across multiple industries.

The provisions aim to, among other things:

      • Bolster competition
      • Encourage innovation and competition among tech companies
      • Ban or limit non-compete agreements for workers

The full impacts of these policies are not clear.

For example, one plan restricts mergers between “dominant internet platforms, with particular attention to the acquisition of nascent competitors, serial mergers, the accumulation of data, competition by ‘free’ products, and the effect on user privacy.”

This order comes as several lawsuits have been brought against big tech companies such as Alphabet’s (Ticker: GOOG) Google and Facebook (Ticker: FB) alleging violations of antitrust laws.

The administration also wants to make it easier for employees to switch jobs by limiting the use of noncompete agreements, particularly for non-executive level jobs.

Banning non-competes puts more leverage in workers‘ hands as it provides more freedom to move to competitor firms.

Today, a third of U.S. businesses require non-competes.

Unions approved of this measure; Big Tech did not.

Khan and Richard A. Powers, who is serving as the acting assistant attorney general for antitrust, said that their agencies would review the current guidelines “with the goal of updating them to reflect a rigorous” approach toward mergers because “we must ensure that the merger guidelines reflect current economic realities and empirical learning and that they guide enforcers to review mergers with the skepticism the law demands.”

This spells trouble for tech firms and increases the scrutiny from Capitol Hill.

Tax Haven Take a Hit

As the G20 group pushes 130 nations to adopt a 15% global minimum tax, Ireland, Estonia and other tax havens’ days in the sun might be coming to an end.

Ireland has an official corporate tax rate of 12.5%, and fears that a 15% minimum rate will ruin a competitive advantage that puts billions of euros into Ireland’s tax coffers and creates hundreds of thousands of jobs.

Ireland was one of only nine countries to forgo signing onto the tax proposal.

In addition to setting a 15% minimum rate, the proposal would force technology and retail multinationals to pay taxes where their goods or services are sold, rather than where the company has its headquarters.

Again, that does not make Big Tech happy.

Cyberwar

Let’s be honest – the U.S. is in an all-out cyberwar with Russia and China, and China, in particular, is playing to win.

American business is under constant attack.

China, Russia and other bad actors are engaging in daily incursions into US tech.

This year data from more than 500 million FB users was found on a website for hackers.

According to Business Insider, the information included phone numbers, FB IDs, full names, locations, birthdates, and email addresses.

The announcement highlighted the vast amount of information collected by FB and other social media sites, and the on-going concerns as to how secure that information is.

This is not the first time FB has faced security issues.

In 2019, the names, phone numbers, and unique user IDs of more than 267 million FB users were found in a database on the open internet.

Cybersecurity firms are going to grow in demand and impact as time goes on.

A recent survey found that nearly 75% of tech leaders think the government’s response to the SolarWinds hack and its aftermath has been average or fair — and not a single respondent said the response was excellent.

Meanwhile, 33% of respondents said that the chief technology priority for the Biden administration should be defining a national cybersecurity protocol.

That is bad for Big Tech, good for traders who look at cybersecurity opportunities.

Cybersecurity

U.S. companies have to beef up their cyber protocols.

Enough red flags have gone up indicating that we need to better ensure security.

Defense in the years ahead will be more about computers than tanks.

China and Russia have made it clear that we need to expect constant threats to our tech infrastructure.

Those threats can be countered through strong cyber programs.

That got me looking at a number of strong cyber companies like:

      • CrowdStrike Holdings (TICKER: CRWD)
      • Ping Identity Holding Corp. (TICKER: PING)
      • CyberArk Software (TICKER: CYBR)
      • Proofpoint (TICKER: PFPT)

The #Powermoves portfolio has been crushing it in Palantir (TICKER: PLTR).

And while we are not active in PLTR at the moment, it is the type of nimble company with solid tech that can pivot to address ongoing threats.

That’s why it’s still in the starting lineup.

Power Moves Portfolio

We cashed in the Taiwan Semiconductor (Ticker: TSM) July 23 124-strike calls for 40% position gain and now just hold the remaining TSM Jul16 125s through the earnings. 

We have our all-in cost on the TSM Jul16s down to $1.25 per contract, so we will ride those and see if some gains develop until the 15th.

We also own some Cleveland-Cliffs (Ticker: CLF) puts in case the market melts down.

The live updated trade log is here

Cutting Through the Noise for You.

Frank

 

“Starman, Waiting in the Sky”

Hey Influence Traders,

It’s the weekend!

We’ve got flying billionaires, digital news, global taxes, and executive orders.

But first …

Some Winners

      • Ashleigh Barty won the Women’s Wimbleton singles championship
      • Novak Djokovic won the men’s championship giving him his 20th Grand Slam title and a tie with Roger Federer and Rafael Nadal
      • Argentina beat Brazil to win the Copa America tournament and gave Lionel Messi his first championship with the national team
      • Richard Branson made it to space … kinda.
      • An overheated economy gets more stimulus

Some Losers

      • Tax havens take a hit
      • Anti-competitive practices are on the run

Starman Waiting in the Sky

Billionaire Richard Branson became the first billionaire to go to space when he launched on one of his Virgin Galactic ships this morning. 

Weather at Virgin Galactic’s Spaceport America in New Mexico caused a slight delay for SpaceShipTwo Unity, but it eventually carried Branson and a few others to an altitude of 50 miles, which the Federal Aviation Administration recognizes as the edge of space.

The Billionaire Space Race has begun.

Digi-SPAC-Man

Tom Farley, the ex-President of the New York Stock Exchange, announced that he will bring the crypto exchange Bullish public through a reverse merger with his SPAC, Far Peak Acquisition Corp. (Ticker: FPAC).

This is an interesting merger of traditional regulated finance, venture, and crypto.

Bullish, which plans to launch a cryptocurrency exchange later this year, is backed by venture capitalist Peter Thiel.

Farley, who will serve as the CEO of Bullish when the deal closes, stated that “Digital assets are here to stay. The smartest engineering talent is going into digital assets; digital assets are solving very important problems. Anybody who tells you they know exactly how it’s going to turn out is lying or delusional, but in general, you’re going to see more and more interesting use cases, more and more dollars go into the space.”

This could also mean that crypto regulation could go mainstream with Farley’s experience with financial regulators.

The Power Moves Digi-View

We like the crypto exchanges, and remain long Coinbase (Ticker: COIN).

Many armchair QBs argue that recent moves by China are helping to drive the volatility in Bitcoin (BTC).

Some are even arguing that Chinese bans and the impending launch of the digi-Yuan will lead to BTC’s demise.

#Truthbomb – China has previously banned Google, Facebook, Twitter, Reddit and Netflix.

BTC will be just fine.

The exchanges just might be better.

Anti-Competitive Practices Lose

President Biden signed a broad executive order on Friday promoting competition through 72 initiatives cracking down on anti-competitive practices across multiple industries. Some of the provision aim to:

      • Bolster competition
      • Make broadband services affordable
      • Encourage innovation and competition among tech companies
      • Address prescription drug pricing
      • Allow hearing aids to be sold over the counter at drug stores
      • Ban or limit noncompete agreements for workers
      • Make it easier for people to get refunds from airlines

The executive order will direct over a dozen federal agencies to implement the initiatives.

The impact of these policies are not clear. For example, one plan is to promote competition in the health care sector to lower drug prices by making the importation of prescription drugs from Canada easier. But history shows that will have a negative impact on R&D efforts at home.

Biden also wants to restrict mergers between “dominant internet platforms, with particular attention to the acquisition of nascent competitors, serial mergers, the accumulation of data, competition by ‘free’ products, and the effect on user privacy.”

This order comes as several lawsuits have been brought against big tech companies such as Google (Ticker: GOOG) and Facebook (Ticker: FB) alleging violations of antitrust laws.

There are a couple of rules that I can get behind. The order will make it easier for Americans to switch banks by requiring the institutions to allow customers to take their financial transaction data with them. Also, airlines will be required to refund baggage costs when a flight is delayed and clearly disclose cancellation fees.

The administration also wants to make it easier for employees to switch jobs by limiting the use of noncompete agreements, particularly for non-executive level jobs.

Banning non-competes puts more leverage in workers‘ hands as it provides more freedom to move to competitor firms. Today, one in three U.S. businesses require non-competes.

Unions approved of this measure; the Chamber of Commerce did not.

I do not like when employee control is taken from business owners. There are valid reasons for employers to seek non-compete agreements, particularly in tech-driven jobs. Moreover, courts have been highly reluctant to enforce overreaching non-competes, with terms of more than one year (or even six months) viewed as suspect. So this is an unnecessary overreach by the executive office.

The order creates a White House Competition Council, led by Brian Deese, the director of the National Economic Council, which will “coordinate the federal government’s response to the rising power of large corporations in the economy.”

Lina Khan, the F.T.C. chair, and Richard A. Powers, who is serving as the acting assistant attorney general for antitrust, said that their agencies would review the current guidelines “with the goal of updating them to reflect a rigorous” approach toward mergers because “we must ensure that the merger guidelines reflect current economic realities and empirical learning and that they guide enforcers to review mergers with the skepticism the law demands.”

That’s clear and unambiguous. Again, such hyperbole leaves open the possibility for massive overreach.

Tax Haven Take a Hit

As the G20 group pushes 130 nations to adopt a 15% global minimum tax, Ireland, Estonia and other tax havens’ days in the sun might be coming to an end.

Ireland has an official corporate tax rate of 12.5%, and fears that a 15% minimum rate will ruin a competitive advantage that puts billions of euros into Ireland’s tax coffers and creates hundreds of thousands of jobs.

Ireland was one of only nine countries to forgo signing onto the tax proposal.

In addition to setting a 15% minimum rate, the proposal would force technology and retail multinationals to pay taxes where their goods or services are sold, rather than where the company has its headquarters.

Ireland and other countries are trying to force subsidies for the loss of revenue that they will suffer, which Ireland anticipates to be 2 billion to 3 billion annually.

In securing the 15% minimum rate, Treasury Secretary Janet Yellen declared a victory, but she still has to sell it to the Hill where it faces an uphill battle to have it become law in the U.S.

A global minimum tax is a key element of the Biden administration’s plans to raise taxes on U.S. companies to help finance new spending on infrastructure, education and antipoverty programs, and it is believed the international tax changes could generate nearly $1 trillion of revenue over a decade.

More Stimulus Hitting the Overheated Economy

On July 15th, the US Treasury will start sending out Child Tax Credit payments.

The amount will depend on household income and the number of children in the household.

The IRS will pay $3,600 total per child to parents of children up to five years old. That changes to $3,000 for each child ages six through 17.

Half of the total owed will be paid in six monthly installments and half as a 2021 tax credit.

The IRS will make a one-time payment of $500 for dependents age 18 or full-time college students up through age 24.

If you don’t want the money, the IRS provides families the ability to opt out of receiving the payments (No, this is not The Onion!).

Some Democrats are fighting to make the expanded child tax credit permanent … and, no, they’ve not explained how they’d pay for it because … federal money grows on trees.

The Power Moves Portfolio

We closed the Taiwan Semiconductor Mfg. (Ticker: TSM) July 23 116-strike puts at $2.23 average price and have a couple of weeks to run with the calls. This put sale gives us the calls for less than $1.

Buy to open 2 TSM July 23/July 09 116-strike put calendars, pay $1.36. Buy to open 2 TSM July 23 124-strike calls pay $1.80 – filled $1.35 and $1.75.

We do own some Cleveland Cliffs (Ticker: CLF) puts in case the market melts down.

The live updated trade log is here.

And BIG news coming soon for the #PowerMoves portfolio.

Cutting Through the Noise for You.

Frank Gregory

 

Lawyers – Sharpen Your Pencils!

Hey Influence Traders,

How about some Thursday deep thoughts on the intersection of K-Street and Wall Street?

But first, I need to give a quick shout out to the Tampa Bay Lightning …

The Bolts clinched a Stanley Cup in five games to repeat as champions.

What can I say?

I love winners.

I also love to talk about the White House and the Hill …

After all, that’s where policy is made.

But there is a third branch of government, as you’re probably aware …

And public and private lawsuits are making ripples from K Street to Wall Street.

Specifcially, litigation gunning for Big Tech.

He’s Baaaccckkk!

Former President Trump filed a class-action lawsuit in Florida Federal District Court against Facebook (Ticker: FB), Twitter (Ticker: TWTR) and Alphabet subsidiary Google (Ticker: GOOG) alleging that their suspension of his accounts amounted to unlawful and unconstitutional censorship.

Most K Street legal prognosticators agree that the case has no merit because private companies are not subject to the Constitution, in this case the First Amendment, which is the basis of the complaint. 

If the suit somehow survives summary judgement and is not immediately dismissed, it could raise some interesting questions, namely whether private companies cross the line from private to public if they are seen enforcing the will of one political party.

But it is most likely DOA.

Break’em Up!

A potentially more interesting suit has been brought by a bi-partisan group of attorneys general from 36 states and Washington, D.C., against GOOG.

The suit alleges that GOOG’s app store policy of charging developers a 30% commission on digital content or subscription purchases violates antitrust laws.

Specifically, it is alleged that GOOG shuts-out potential competitors and limits app choices, which artificially drives up prices.  

This is the third antitrust lawsuit filed by states against GOOG

Google leadership described the suit as “strange.”

This case comes on the heels of the recent dismissal of another antitrust suit by attorneys general against FB …

However, that case was dismissed because of a procedural error, not the merits.

The suits don’t appear to be having a big impact on the recent tech run and, as I always say, I’d rather own five pieces of a broken up monopoly rather than the monopoly itself.

Suits in Your Favor

The Department of Defense’s recent cancelation of the Joint Enterprise Defense Infrastructure, or JEDI, cloud computing project has been all over the news.

The $10-billion program was awarded in 2019 to Microsoft’s (Ticker: MSFT) Azure platform.

But do you know why it was cancelled?

Because Amazon (Ticker: AMZN) contested the decision in court alleging that former President Trump unduly influenced the award process because of animosity towards Jeff Bezos.

Bad news for MSFT; good news for the B-Man.

The cancellation caused AMZN’s shares to rise, which put Bezos’s net worth over $211 billion, allowing him to surpass Elon Musk as the world’s richest man.

Tesla’s (Ticker: TSLA) Musk is just under the $200 billion mark, so don’t cry him a river.

Who or What Does Paul Know?

One person unphased by the tech lawsuits is House Speaker Nancy’s Pelosi’s husband, Paul, who raised some eyebrows this week with some apparently well timed trades.

According to a July 2 financial disclosure, he made a little over $5 million on GOOG options contracts. 

This announcement raised eyebrows because Nancy Pelosi is leading the debate on a series of antitrust bills targeting Google, Apple (Ticker: AAPL) and Amazon.

Since House and Senate members have been accused in the past of trading on insider information, people took note.

While suspicious, it appears that Paul Pelosi just made some options #PowerMoves. (Maybe he’s a Volatility Edge member!)

On February 27, Pelosi bought 40 GOOG call options at a strike price of $1,200, which were exercised on June 18 and gave him the right to convert into 4,000 Alphabet shares.

At the time of exercise, GOOG was trading around $2,550, so the options were in-the-money and worth about $5.4 million.

The options were set to expire on June 18, the day he exercised, so Paul Pelosi had to either sell them or execute. 

This is not the first time that PP has made some timely bets.

I’m not throwing accusations … just stating facts.

#PowerMoves Portfolio

Option Pit Director of Education — and my Power Moves Portfolio running partner — Andrew Giovinazzi has been making some #powermoves of his own.

      • We closed our Cleveland-Cliffs (Ticker: CLF) July 16 21-strike puts for $.77. 

It was a small gain on those puts and we still own the CLF July 16 16-strike puts from the spreads. 

      • CLF is not holding a bid for any length of time. There will probably be a better reentry point.

      • We added two Coinbase (Ticker: COIN) Aug. 20 250/270/290 call butterflies for $2.55. We’re spending the COIN call spread money to see if the stock can make a move back to the $270-level.

      • Palantir (Ticker: PLTR) is moving back up the list for call buys. Stay tuned.

      • Taiwan Semiconductor (Ticker: TSM) was a Trading Legion idea, but the trade fits our investment thesis, so Andrew is adding it to the Power Moves Portfolio.

He wants the put calendars to pay the decay for his calls as TSM powers up to earnings.

The stock looks poised to break out and the two big semiconductor makers, Advanced Micro Devices (Ticker: AMD) and nVidia Corp (Ticker: NVDA), are showing crazy momentum that should help TSM.

Here’s the idea:

Buy to open two TSM July 23/July 09 116-strike put calendars; pay $1.36. Buy-to-open two TSM July 23 124-strike calls; pay $1.80 … These were filled for $1.35 and $1.75, respectively.

The live updated trade log is here

And look for big Power Moves Portfolio news coming soon …

Cutting Through the Noise for You.

Frank