Disney, Macys, retail hammer lazy Wednesday markets

All major market averages off over one percent as Tuesday’s stock market rally is reversed, big time. Crude oil continues to rise.

Today's market sentiment seemed best expressed by these lazy walruses who couldn't care less. (Image by Jay Ruzeski via unsplash.com, CC 0.0)

WASHINGTON, May 11, 2016 – Wednesday has been one of those days when the Maven actually sympathizes with the transparent hucksters, book-talkers and assorted blow-dry media types who are forced daily to blather on about this or that in order to feed that hungry and ruthless 24/7 cable TV-Internet-streaming video monster known as the “news cycle.” They rattle on about this or that, whether they really know anything about the topic or not.

Likewise today, the Maven himself finds he’s challenged to describe today’s trading action, which reacted swiftly to the downside. This happened even as both market trading volume and traders themselves seemed to be experiencing a lazy day, perhaps a bit like the indolent walruses lounging about in the above photo. As in, “Oh, hell, let’s just sell.”

But, having taken the Tuesday’s rally day, the Maven feels obligated to punch in a few words here moments after Wednesday’s 4 p.m. market close, just to make up for yesterday’s dead air.

Wednesday’s trading started off badly, leveled off, and then proceeded to get worse, particularly after 2:30 p.m. EDT, the departure time for the afternoon “Sell Program Express,” according ETF Digest’s Dave Fry. Dave, like the Maven, has been a consistent hater of the HFTs and algos for lo these many years. That said, it is what it is and if we want to try to make money, we have to deal with it.

Oil caught a tremendous bid again today, hiking WTI prices up into the $46 range, something that might at least bring a faint, flickering smile to the faces of many beleaguered and overleveraged wildcat drillers and master limited partnerships.

On the other hand, retailers like Macys (symbol: M) continued to get pounded today, with the stock of that iconic chain off $5.61 per share to close at $31.38, down a whopping 15.17 percent. Very nasty if you were holding some of these shares. It seems most retailers are suffering from prolonged buyer-reluctance coupled with the consumer and marketing monster otherwise known as Amazon.com (AMZN).

Making matters worse, massive Dow component Disney (DIS) also got face-planted today, having earlier posted disappointing numbers, particularly for its currently reeling TV component. DIS was off $4.31 today, a minus 4.04%, closing at $102.29. Given the chaos these days in the Cable TV-Internet-streaming download paradigm re-shaping, pundits and investors alike apparently decided en mass that currently declining ESPN represented all of Disney’s business, reasoning, therefore, that this massive entertainment conglomerate would cease to be, perhaps even tomorrow.

Such nonsense, of course, creates buying opportunities, and we’re interested. But given the market’s nasty tone today, and it’s total ignoring of energy’s strong performance, it feels as if we are once again entering the kind of scoundrel time we experienced in January and February 2016. Which means that something like Disney, or even Macys, could be a better bargain tomorrow. Patience, after all, is a virtue even in this game.

Trading diary

We’ve been trying to get back in to at least some of the Teekay Tankers shares (TNK) we recently dumped, fearing that “they”—i.e., well-connected investors who always seem to have inside info—might know something we don’t know about why that company seems to have delayed both its current dividend date and its quarterly report. But since then, the stock, which dropped back into the mid-$3 price range, circa, say, $3.60 or so.

TNK closed today just over the $4 handle, so maybe the insiders have changed their tune. We did make a small profit on TNK the last time around, but we’d prefer to play this game again only if we can get the shares more cheaply than today’s closing price.

Our Allergan Preferred A (AGN/PRA) levitated today in early trading for some strange reason. That’s because the stock went ex-dividend today, depriving those investing in it today of the stock’s current 5+ percent dividend, $13.75 per share. Usually on ex-dividend date, a common or preferred stock goes down by approximately the amount of the dividend, reflecting the simple fact that today’s buyer is not going to get the current dividend.

Sure enough, AGN/PRA caught a ride on that Sell Program Express this afternoon, closing off $5.475 on the day to land at $810.495 per share by the bell. This is a term preferred stock, and will be retired at $1000 per share on March 1, 2018. It’s still a risk worth taking in our book.

Other than that, we nibbled at a couple tiny ETF positions, including getting back into gold and silver bullion via the Swiss bullion ETFs SGOL and SIVR. And we’re also looking at the long-moribund agriculture ETF, DBA, since it looks as if prices for ag products are firming as the spring planting season advances.

The trend of this exhausted market seems to be negative once again. So, having been burnt to a crisp in the recent January-February 2016 swoon, we’re not remotely ready to commit our cash to much of anything right now. Maybe tomorrow or next week.

Disclaimer: Once again, as we used to when we were affiliated with a larger news organization, we’re going to start running a more or less standard disclaimer again, given all the bafflegab coming out of official Washington regarding fiduciary responsibilities. The Maven, of course, is not currently a “fiduciary,” in that he doesn’t manage other people’s money. But he does occasionally provide insights and suggestions in this column.

Readers, of course, are always urged to get second, third and fourth opinions before jumping into anything in this continually bizarre excuse for a stock market. It’s your only defense against the predators out there that your Federal government is studiously ignoring.

The Maven tries to provide you with the best insights he can muster, but, like any investor, including the (wrongly) sainted Warren Buffett, he can and will be wrong from time to time like he certainly was in January-February 2016.

So… here it comes:

I have no positions in any of the stocks mentioned in today’s report, except for a significant position in AGN/PRA. However, anything mentioned in this column in a positive way may be on my radar for potential purchase should the investment moons and stars align properly.

I wrote this article myself. It expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article. Like both you and Howard the Duck, I’m trapped in a world I never made.

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