Hey Influence Traders,
It’s Weekly Roundup time!
The big news?
My youngest graduated 8th grade.
Also, there was a massive Bitcoin conference in Miami, with lots of #PowerMovers in attendance.
Look for my writeup on the event this week — a true homage to Bitcoin.
The Highlights
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- Delegates at the G7 meeting come out swinging on corporate taxes
- Infrastructure deal proving elusive — but not out of reach
- A Bitcoin power debate between two heavyweights
- BP (Ticker: BP) makes a #PowerMove
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DC Action
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- Global Taxes: The U.S. is backing a plan by the G7 nations to set a global minimum corporate tax rate of at least 15%.
- Infrastructure Counter to the Counter to the Counterproposal: The Biden administration keeps cutting and the Republican leadership keeps raising in the hopes of reaching an infrastructure compromise.
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Biden put forth concessions to try and secure a $1 trillion infrastructure deal this week, and has now cut more than $1 trillion from his initial $2.3 trillion infrastructure proposal.
Meanwhile, the Republican leadership raised the GOP’s offer by $50 billion, which puts it just under $1 trillion.
The deal is not done, but it is certainly not dead as some had previously reported. This week will be pivotal.
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- Crypto Taxes: Financial Crimes Enforcement Network (FinCEN), which is part of the US Treasury Department, is amending its reporting form to cover one or more accounts held outside the US if the aggregate amount exceeds $10,000, which will cover crypto accounts.
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Power Moves Portfolio Roundup
The Power Moves Starting Lineup continues to make waves:
Trading guru Andrew Giovinnazi caught and bought the BUG … four Global X CyberSecurity ETF (Ticker: BUG) Sept. 17 28-strike calls for $1.25. The stock is illiquid, but the IV in the calls is cheap, so this was our best way to play the Ransomware story.
Ford Motor Co. (Ticker: F) is moving out and we sold out three of five of the call part of the trade at $1.06. The trade is semi-mirroring the ratio AG has in the Trading Legion. Up 33% on the first leg and 88% on the second.
General Electric Company (Ticker: GE) is a play on green energy. We own two GE Sept. 17 14-strike calls for a credit.
Cleveland Cliffs (Ticker: CLF) broke out and way above the strike in our spread, so AG took the $100 gain and bought a midterm call, on CLF Jul16 21 calls for $1.61. Looking for a double in this call to close.
We sold three Taiwan Semiconductor (Ticker: TSM) June 18 120-strike calls at $2.31 on Friday, just because we were running out of time and the position was about even with the QQQ puts. The crazy thing is, of course, that TSM looks crazy strong, so AG bought two TSM July 21 125-strike calls for $2.51. Targeting a double on those calls and we still own the June 18 100-strike put too.
Palantir (Ticker: PLTR) stock is trading over $24. Since the net position was up around 8%, AG sold the stock and moved into cheaper calls. He bought five PLTR July 18 26-strike calls for $1.18.
Power Mover of the Week
The nominees …
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- Essential Quality: Made a #PowerMove down the back stretch to beat out Hot Rod Charlie for a win at the Belmont. He paid $4.60 on a $2 bet to win.
- Susan Rice: One of Washington’s true power-brokering insiders, Susan Rice, who is the head of the Domestic Policy Council and a former Obama confidant, invested $5 million in Canadian Pipeline company Enbridge Inc. (Ticker: ENB).
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ENB is a multinational pipeline company headquartered in Calgary, Alberta. It focuses on the transportation of crude oil and liquid hydrocarbons, primarily in North America. Enbridge has been in a dispute with the state of Michigan over a pipeline that has caused its stock price to flatline.
Does Susan know something that we don’t?
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- U.S. Jobs: The U.S. added 559,000 jobs in May and the unemployment rate fell to 5.8%, the first time it has dropped below 6% since the pandemic started.
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However, employers still report having trouble finding applicants, despite millions remaining on the jobless.
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- Nuclear Power: Wyoming is a making a nuclear #PowerMove with the help of two financial titans.
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While nuclear is not center stage for a lot of climate activists, it has its supporters who know that addressing their climate change concerns will require greater use of nuclear power plants, in addition to wind and solar energy sources.
Recently, Nuclear Fuel Services, Inc., a subsidiary of Lynchburg, Va.-headquartered BWX Technologies (Ticker: BWXT), was awarded a $57.5 million contract from the National Nuclear Security Administration (NNSA) to convert natural or depleted uranium (DU) to purified highly enriched uranium (HEU) metal.
This week, Wyoming Gov. Mark Gordon announced that a next-generation nuclear power plant will be built at a soon-to-be-retired coal-fired plant in Wyoming. The project is a joint venture between two financial titans, Bill Gate’s TerraPower and Warren Buffett’s Berkshire Hathaway-owned PacifiCorp. The project will feature a 345-megawatt sodium-cooled fast reactor with a molten salt-based energy storage system, which would produce enough power for roughly 250,000 homes.
But my Power Mover of the Week is … Solar
There are numerous bills and executive orders circulating around D.C. that promote green energy spending and reduced tax benefits for fossil fuel companies. Some fossil fuel companies see the writing on the wall.
Power Loser of the Week
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- BTC Power Consumption – When Elon Musk announced that Tesla (Ticker: TSLA) would no longer take Bitcoin as payment for its electric vehicles because he is “concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel,” he launched a debate over BTC’s energy consumption.
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Ark Investment scion Cathie Wood, who went heavily into BTC, counters that Musk is wrong. She cites separate studies that claim that between 39% to 73% of BTC power consumption is from renewable sources.
The debate rages on!
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- College Basketball: Duke’s Coach K announced that he will retire after the next season, ending an era in college basketball that might never be matched. (YES – I’m a highly biased Duke fan.)
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Mike Krzyzewski is the winningest coach in men’s college basketball, with 1,170 total victories. Jon Scheyer, Duke’s associate head coach and one of Krzyzewski’s former players, will succeed Krzyzewski as the team’s first new head coach since 1980.
In my three years at Duke Law, I witnessed back-to-back national championships and a 29-1 post-season record. PURE MAGIC!
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- The Legal Profession: The legal world lost a heavyweight this week when F. Lee Bailey passed away at the age of 87. He represented some of the most famous defendants, from Patti Hearst to O.J. Simpson to the Boston Strangler. But he first gained attention in 1966 when he succeeded in reversing the murder conviction of Dr. Sam Sheppard, the Ohio doctor whose case inspired the television series and movie “The Fugitive.”
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But my Power Loser of the Week has to be … Global Taxes.
Finance leaders from the Group of 7 countries agreed to back a new global minimum tax rate of at least 15% that companies would have to pay regardless of where they locate their headquarters.
The G7 delegates, which represent Britain, Canada, France, Germany, Italy, Japan and the United States, want to stop large multinational companies from seeking out tax havens and force them to pay more of their income to governments.
The agreement could also force large multinational companies, like Amazon (Ticker: AMZN), Facebook (Ticker: FB) and Google (Ticker: GOOGL), to pay taxes to countries based on where their goods or services are sold, regardless of whether they have a physical presence in that nation.
Such moves could definitely impact earnings and companies’ bottom lines.
The next step is for the G7 countries to sell the idea to the G20 nations at their upcoming meeting in Italy.
Not everyone is happy. Ireland, for example, has a 12.5% tax rate and believes that a 15% minimum rate would disrupt its economic model. China has not taken a public position.
But the U.S. is fully behind the idea because it wants to raise its corporate tax rate from 21% to 28% to help pay for Biden’s infrastructure proposal. Treasury Secretary Janet Yellen needs the global rate to go up to minimize the disadvantage she wants to levy on American companies to make it less likely they’ll move operations offshore.
Its Logo is the Sun, After All
Seeing the writing on the wall for fossil fuels, BP (Ticker: BP) just boosted its investment in U.S. renewables with a $220 million purchase of solar projects from developer 7X Energy.
The new assets will be developed and operated through its 50-50 joint venture with BP-owned Lightsource. The 7X business is a nice addition to BP’s U.S. power trading business, which includes onshore wind and natural gas electricity.
BP has plans to reduce carbon emissions by reducing oil output and growing its renewables business 20-fold between 2019 and 2030 to a capacity of 50 gigawatts.
BP is making #PowerMoves and deserves to be in the Power Moves Portfolio Starting Lineup … stay tuned.
Cutting Through the Noise for You,
Frank