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US Weekly Jobless Claims Plummet to Lowest Since 1969

It appears that Americans are finally returning back to work. US jobless claims fell to the lowest since the 60s,
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This article was originally published by The Deep Dive

It appears that Americans are finally returning back to work. US jobless claims fell to the lowest since the 60s, suggesting that America’s labour market is heating up and may actually meet freshly renominated Fed Chair Jerome Powell’s goalpost of “substantial further progress.”

According to latest data published by the Labour Department, weekly first-time applications for unemployment benefits fell by 71,000 to 199,000 for the week ending on November 20, marking the lowest number of claims since 1969, and significantly below the consensus estimate of 260,000 applications forecast by economists polled by Bloomberg.

The latest figures come just as inflation across the US soars by the sharpest pace in over 30 years, as supply chain bottlenecks, shortages, and surging demand force producers to hike prices for goods and services. In response, the Fed has decided to gradually begin paring back its monthly bond purchases, but stopped short of issuing a comprehensive timeline for an interest rate hike.

To further add support for an update to the country’s ultra-dovish fiscal policies, the US economy also expanded by more than previously expected during the summer. According to revised figures from the Commerce Department, second quarter GDP growth was upwardly revised to 2.1%, up by one-tenth of a percentage point from previous estimates.

So, mission accomplished, Jerome Powell?


Information for this briefing was found via the Labour Department and the Commerce Department. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

The post US Weekly Jobless Claims Plummet to Lowest Since 1969 appeared first on the deep dive.


Author: Hermina Paull

Economics

The Most Crowded Hedge Fund Stocks Just Had Their Worst Month In History: Here’s How To Make Money From Their Misery

The Most Crowded Hedge Fund Stocks Just Had Their Worst Month In History: Here’s How To Make Money From Their Misery

It was almost exactly…

The Most Crowded Hedge Fund Stocks Just Had Their Worst Month In History: Here’s How To Make Money From Their Misery

It was almost exactly a year ago when just weeks before the first of many epic short squeezes observed in a handful of meme stocks such as GME, AMC and so on, which would eventually consume the retail public with a daytrading, short-squeezing frenzy, that we reminded our readers that the single best alpha-generating strategy in this irreparably broken market is to go long the most shorted stocks (as this tweet from Nov 30, 2020 clearly states)…

… a strategy that had worked like clockwork virtually every year in the past decade (with just one exception), and which we summarized as follows: “Do the opposite of Wall Street consensus and retire in a few years.”

Of course, while most of the US daytrading class is now in a furore over the “discovery” that most shorted stocks tend to outperform – to put it mildly – when a bunch of Gen-Z apes rams illiquid, heavily shorted names up the collective behind of hedge funds which “legally” collude during idea dinners to put on a basket of shorts, hence why stocks like GME can end up with a synthetic short that is higher than the entire float, none of this should be news to regular readers, as the theme of going long the most shorted names is one we first presented and discussed as far back as 2013:

We then reiterated this strategy in 2014…

… 2015…

… 2016…

… 2017

… 2019

… 2020

And so on.

It took banks about 6 years after our first post on this matter to admit we were right and that going long “the most shorteds” is not only the most profitable strategy but also the most successful one in the past decade; in Aug 2019 Bank of America showed that “buying the 10 most underweight stocks and selling the 10 most overweight stocks by active funds has generated alpha in the past years with the exception of 2017″...

… as we laid out in Going Against The Wall Street Crowd Has Been The Most Profitable Strategy.

What is the point of all this?

Well, the point is that almost ten years after we first pointed out this phenomenal trade which almost literally prints money with the same regularity as the Fed, only this one actually requires some effort, nobody has learned a thing.

As we first observed last week in “Most Popular Hedge Fund Stocks Suffer Record Stretch Of Underperformance” the hedge fund hotel that is Goldman’s hedge fund VIP basket of 50 most widely held HF stocks, has suffered the biggest 6 month drop on record at a time when nothing could go right for hedge funds.

Then over the weekend, we observed that even before last week’s historic Black Red Friday collapse. which saw the biggest post-Thanksgiving drop on record, hedge funds had a terrible week because according to Goldman prime, the GS Equity Fundamental L/S Performance Estimate fell -1.57% between 11/19 and 11/25, driven by alpha of -1.12% which was “the worst alpha drawdown in nearly six months” and beta of -0.45% (from market exposure and market sensitivity combined).

And then, the cherry on top was Friday’s meltup in a handful of pharma stocks like Moderna and Pfizer, which exploded higher as everything else was crashing, steamrolling hedge funds even more for one simple reason: Moderna was the third largest short in the hedge fund world according to Goldman.

Which brings us to the punchline: according to Morgan Stanley’s Quantitative Derivatives Strategy team, “The MS Crowded Long basket MSXXCRWD is down 13% vs. the S&P 500 over the last month — the worst rolling one-month relative performance on record (just edging out March 2020).

As QDS puts it “Think about that: WORSE than March 2020…. and again, this doesn’t even embed Friday’s move.”

There are several ways to interpret this stunning observation – none of them flattering for a hedge fund community which long ago forgot how to actually hedge – but perhaps the simple and most robust explanation is to keep doing what we said back in 2013 remains the most profitable strategy –  buy the most shorted names and go short the most popular names, a strategy which will keep on giving as long as the market remains as broken as it is today.

And just to help readers off on their mission to profit from a terminally broken market – because after all, everyone else does it – here again is a list of the 50 most popular hedge funds longs…

… and the 50 biggest hedge fund shorts.

And as an added bonus stepping aside from the hedge fund universe, here are the 50 most shorted names, i.e., those companies with a $1BN+ market cap that have the highest short interest outstanding as a percentage of market cap. Going long an equal-weighted basket of these names has historically generated returns of over 20% every single year.

The full reports from both Morgan Stanley and Goldman are available to pro subscribers in the usual place.

Tyler Durden
Mon, 11/29/2021 – 22:00


Author: Tyler Durden

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Economics

FTC Demands Wal-Mart, Amazon & Others Participate In Supply-Chain Probe

FTC Demands Wal-Mart, Amazon & Others Participate In Supply-Chain Probe

Shortly after President Biden sat down with top executives from…

FTC Demands Wal-Mart, Amazon & Others Participate In Supply-Chain Probe

Shortly after President Biden sat down with top executives from Wal-Mart, a handful of regional grocers and others to hold a “round table” to discuss “supply chain” issues, the FTC announced Monday afternoon that it would launch an investigation into the factors contributing to these types of disruptions, which have been blamed for contributing to inflation by helping to drive up prices.

Just as reports claimed the supply chain crunch appears to finally be waning, President Biden sicced the FTC on the issue. Once again, it’s bureaucracy to the rescue; and anybody who doesn’t go along with the Biden Administration’s preferred narrative (ie that this is part of a global phenomenon, and that the US isn’t unique) better hope the administration doesn’t accidentally make things worse.

At any rate, it’s bureaucracy to the rescue.

And we don’t say that because we think America’s ports need assistance (they clearly do). The problem is that the supply chain crunch goes far beyond the ships and the ports and the truckers. It’s what an economist might call a “complex”” issue.

While President Biden met with a senior Wal-Mart executive in person, and in front of the cameras, as part of Monday’s “supply chain round table” at the White House, Bloomberg says it is ordering large retailers, wholesalers and consumer good suppliers including Amazon and Walmart to provide the White House with “detailed information” that might aid in a newly launched inquiry into the ongoing supply chain disruptions that are contributing to President Biden’s inflation (or should we say, reflation?) fears.

In addition to Wal-Mart and Amazon, the investigation will target Kroger, Associated Wholesale Grocers, McLane, Procter & Gamble, Tyson Foods, Kraft Heinz and others who are expected to receive their orders from the FTC on Monday. Firms have 45 days to respond.

It’s believed the administration intended this is a message to companies everywhere: don’t raise your prices unless you absolutely need to, because the White House will be checking the receipts, waiting to bust anybody who can even be remotely construed engaging in price gouging.

According to BBG, information being sought by FTC includes primary factors disrupting their ability to obtain, transport and distribute products, impact of those disruptions on delayed or canceled orders, increased costs and prices, what firms are doing to curb disruptions.

The study will focus on determining whether supply chain problems have led to bottlenecks, anti-competitive practices or higher prices, the agency said in a statement.

FTC Chair Lina Khan said in a statement she was hopeful that the study would “shed light on market conditions and business practices that may have worsened these disruptions or led to asymmetric effects.”

The FTC is also asking firms to return the information it’s requesting as soon as possible. Firms will have 45 days from the date they receive the order to respond.

“Supply chain disruptions are upending the provision and delivery of a wide array of goods, ranging from computer chips and medicines to meat and lumber,” FTC Chair Lina Khan said in a statement announcing the investigation.

President Biden and his team clearly intended Monday’s “round table” with “supply chain” executives like the leaders of Wal-Mart, Food Lion and others as a distraction. Readers can watch the “round table”, held at the White House Monday afternoon, at their convenience.

But allow us to save you some time, because, at the end of the day, Biden doesn’t need their help.

But he may need them to pay higher taxes, on top of rising costs and expenses for their businesses, to help offset the costs of his social spending package which is expected to further stoke inflation.

Tyler Durden
Mon, 11/29/2021 – 18:00

Author: Tyler Durden

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Economics

4 Cyber Monday Stocks to Buy: ROKU, PYPL, TWLO, V 

As the markets continue to chop around all-time highs — leaving both bulls and bears believing they are “in the lead” — I wanted to veer from our…

As the markets continue to chop around all-time highs — leaving both bulls and bears believing they are “in the lead” — I wanted to veer from our typical top stock trades routine and look at some potential bargain-bin Cyber Monday stocks to buy. These may not be the typical quick-trade candidates, but longer term swings so long as they do not break down too much further from current levels. Let’s get started.

Cyber Monday Stocks to Buy No. 1: Roku (ROKU)


Click to Enlarge
Source: Chart courtesy of TrendSpider

Roku (NASDAQ:ROKU) is the first on our list, with shares down around 50% from the highs — more than any other stock on this list. Nonetheless, you will notice in the disclosure that I am long a majority of these stocks, and I believe in their long-term futures.

I am a trader first and an investor second, but when I see high-quality stocks — “quality” being the key word — on a 40% to 50% discount, I like to begin accumulating them for long-term holds.

I discussed this strategy once in a lengthy YouTube video.

In any regard, we’re in that stage with many of these growth companies. Here is a weekly chart of Roku, which is trying to find its footing in the low-$230s.

Surprisingly, Roku finished higher last week, giving us the potential for a weekly-up rotation over $238.27.

In the short-term that could put the $250 level in play, followed by the gap-fill level and the 21-month moving average near $270. Above that, and the $290 to $300 zone is on the table.

A sustained move below the $223 low, and we could see $200 next. However, after such a beating, the risk/reward is shifting toward the bulls’ favor.

Cyber Monday Stocks to Buy No. 2: PayPal (PYPL)

Cyber Monday stocks to buy PYPL
Click to Enlarge
Source: Chart courtesy of TrendSpider

PayPal (NASDAQ:PYPL) is not down as much as Roku, but it’s still about 40% off the highs. Shares are trying to hammer out a bottom down here, but it’s not clear if that will be the case.

Now, check out Monday’s action. Shares undercut the prior week’s low near $184, then reversed higher. It did so with some bullish divergence on the charts, too.

From here, let’s see if PayPal can clear $293.90, putting $200-plus back in play.

What we don’t want to see is a break below this week’s low and sustained move lower. That could put $175 back on the table.

Cyber Monday Stocks to Buy No. 3: Twilio (TWLO)

Cyber Monday stocks to buy TWLO
Click to Enlarge
Source: Chart courtesy of TrendSpider

Twilio (NYSE:TWLO) has some life, putting in its third-straight daily gain. Shares are up more than 10% from last week’s low, and are going weekly-up over last week’s high.

That’s a great start, but we need more.

Back over $300 would do a lot of good for bulls this week. That puts Twilio back above the 10-day and 21-day moving averages, as well as the 21-month moving average.

If we get that, then Twilio could see an additional push to the 10-month and 50-day moving averages, followed later by the 200-day moving average.

On the downside, however, a break of $275 and the November low really deals this one a tough blow and will likely stop out a lot of longs.

Cyber Monday Stocks No. 4: Visa (V)

top stock trades for V
Click to Enlarge
Source: Chart courtesy of TrendSpider

Last but not least is a high-quality company, but one that’s been caught in a landslide lately: Visa (NYSE:V).

Shares are trying to hammer out a bottom in the $190 to $200 range, but so far, it’s struggling to gain upside traction.

If it can regain $200, I think we need to start talking about the $205 to $208 area, where Visa faces plenty of prior moving averages of various timeframes. The monthly VWAP measure is also there.

Above $208 puts $211.66 in play, the gap-fill from earlier this month. Those are the “immediate upside levels” if bulls gain some traction.

On the downside, though, a break and close below $192 could put $180 in play.

On the date of publication, Bret Kenwell held a long position in ROKU, TWLO, PYPL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.

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Author: Bret Kenwell

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