Category Insider Report

Insider Report

Saudi Aramco Becomes World’s Most Valuable Stock as Apple Drops

by Senior Analyst
  • The reversal reflects recent energy strength and tech weakness
  • The last time Aramco was bigger than Apple was in 2020

Saudi Aramco overtook Apple Inc. as the world’s most valuable company, stoked by a surge in oil prices that is buoying the crude producer while adding to an inflation surge that is throttling demand for technology stocks.

Aramco traded near its highest level on record on Wednesday, with a market capitalization of about $2.43 trillion, surpassing that of Apple for the first time since 2020. The iPhone maker fell 4.4% in New York to $147.53, giving it a valuation of $2.38 trillion.

Even if the move proves short-lived and Apple retakes the top spot again, the role reversal underscores the power of major forces coursing through the global economy. 

Soaring oil prices, while great for profits at Aramco, are exacerbating rising inflation that is forcing the Federal Reserve to rise interest rates at the fastest pace in decades. The higher rates go, the more investors discount the value of future revenue flows from tech companies and push down their stock prices.

“You can’t compare Apple to Saudi Aramco in terms of their businesses or fundamentals, but the outlook for the commodity space has improved. They’re the beneficiaries of inflation and tight supply,” said James Meyer, chief investment officer at Tower Bridge Advisors.

Aramco takes over as world's most valuable stock as Apple slumps

With the Fed on pace to further raise rates by at least another 150 basis points this year and with no prospects yet of a resolution for the conflict in Ukraine, it may be a while until tech regains dominance, according to Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder. “There’s panic selling in a lot of tech and other high-multiple names, and the money coming out of there seems headed in particular for energy, which for now has a favorable outlook, given commodity prices,” he said. “Companies like Aramco are benefitting significantly from this environment.”

Insider Report

Oil Output Slips as Higher Costs Hit U.S. Drillers

by Senior Analyst

Oil Halts Slide as Fuel Stocks Plunge Ahead of Driving Season

  • US distillate inventories fell to the lowest since May 2005
  • New York gasoline inventories fell to lowest since 2017

Weekly US crude oil production declined for the first time in three months, signaling that soaring costs across the oil fields may be preventing drillers from expanding output.  

The decline hits as the oil-consuming nations are scrambling for additional supplies to reduce reliance on Russia and bring down the skyrocketing crude prices. President Joe Biden has urged the industry to raise supply to help battle historically high fuel inflation.

Bloomberg Crude oil price: WTI Crude105.18USD/bbl.+5.42+5.43%

Total US crude production fell for the first time since January
  

In its Short-Term Energy Outlook report this week, the EIA lowered its production forecast through 2023. Drillers have said they are experiencing spiraling prices on everything from rigs and workers to diesel fuel and frack sand. 

Oil rallied as the European Union continued to haggle with holdouts over a Russian crude ban while a US government report showed fuel inventories plunging ahead of the summer driving season.

West Texas Intermediate futures rebounded over $5 on Wednesday, halting a two-day slide in which futures shed more than $10.  On Wednesday, Hungary said it will only agree to a ban on Russian imports if shipments via pipelines are excluded. In the US, the Energy Information Administration reported that distillate inventories fell to the lowest since May 2005.

Insider Report

Goldman Sachs said to withdraw from most SPACs over liability concerns – report

by Senior Analyst

May 09, 2022 11:59 AM ETThe Goldman Sachs Group, Inc. (GS)

Goldman Sachs (NYSE:GS) is said to be exiting most SPACs it has taken public due to concerns over liabilities after regulators released proposed rules.

Goldman (GS), the No. 2 biggest underwrites of SPACS, is telling the SPAC sponsors it will be terminating its involvement, according to a Bloomberg report. The bank is also pausing new U.S. SPAC issuance for the time being.

The Goldman SPAC exit comes after Bloomberg reported early last month that Citi (C) was said to put a temporary hold on underwriting IPO for SPACs until companies can determine legal liabilities with new SEC proposed rules.

Goldman (GS) confirmed with Bloomberg in a statement that the bank was reducing its involvement with SPAC due to changes in the regulatory environment.

The Goldman and Citi pauses come after the SEC unveiled new SPAC regulations in March aimed in part at discouraging the dissemination of inaccurate growth forecasts about potential mergers. The new rules emphasize that investors have the right to sue blank-check companies if they issue exaggerated projections or bullish statements about the companies they plan to take public

Securities and Exchange Commission Chairman Gary Gensler said in December that he believes that investors may not be getting the same protections between SPACs and traditional IPOs. Some of these investor protections include disclosure, marketing practices and gatekeepers.

Upcoming SPACs

Here are 10 of the most headline-grabbing SPACs that either recently announced acquisition targets or may soon:

SPAC NameTicker SymbolMarket Capitalization (as of 2/25/2021)Target Acquisition
Churchill Capital Corp IVCCIV$7.2 billionLucid Motors
Pershing Square Tontine HoldingsPSTH$5.8 billionNot yet announced
Foley Trasimene Acquisition Corp IIBFT$2.8 billionPaysafe
Social Capital Hedosophia Holdings VIPOE$1.9 billionSoFi
Star Peak Energy Transition CorpSTPK$1.5 billionStem
CC Neurberger Principal Holdings IIPRPB$1.2 billionNot yet announced
GS Acquisition Holdings Corp IIGSAH$1.1 billionNot yet announced
AJAX IAJAX$1.1 billionNot yet announced
Social Capital Hedosophia Holdings IVIPOD$814 millionNot yet announced
VG Acquisition CorpVGAC$709 million23andme
Insider Report

Carvana Whale Trades Spotted

by Senior Analyst

Someone with a lot of money to spend has taken a bearish stance on Carvana (NYSE:CVNA). And retail traders should know. As large positions show up today on publicly available options history.

05/10/2022 13:02

Someone with a lot of money to spend has taken a bearish stance on Carvana (NYSE:CVNA).

And retail traders should know.

We noticed this today when the big position showed up on publicly available options history that we track.

Whether this is an institution or just a wealthy individual, we don’t know. But when something this big happens with CVNA, it often means somebody knows something is about to happen.

So how do we know what this whale just did?

Today, our options scanner spotted 44 uncommon options trades for Carvana.

This isn’t normal.

The overall sentiment of these big-money traders is split between 40% bullish and 59%, bearish.

Out of all of the special options we uncovered, 30 are puts, for a total amount of $2,062,273, and 14 are calls, for a total amount of $883,298.

What’s The Price Target?

Taking into account the Volume and Open Interest on these contracts, it appears that whales have been targeting a price range from $25.0 to $95.0 for Carvana over the last 3 months.

Volume & Open Interest Development

Looking at the volume and open interest is a powerful move while trading options. This data can help you track the liquidity and interest for Carvana’s options for a given strike price. Below, we can observe the evolution of the volume and open interest of calls and puts, respectively, for all of Carvana’s whale trades within a strike price range from $25.0 to $95.0 in the last 30 days.

Carvana Option Volume And Open Interest Over Last 30 Days

Options Call Chart

Biggest Options Spotted:

SymbolPUT/CALLTrade TypeSentimentExp. DateStrike PriceTotal Trade PriceOpen InterestVolume
CVNAPUTSWEEPBEARISH05/13/22$40.00$210.0K1.5K562
CVNAPUTSWEEPBULLISH05/27/22$60.00$179.7K223140
CVNACALLSWEEPBULLISH05/20/22$33.00$148.5K0198
CVNAPUTTRADEBULLISH01/19/24$95.00$135.7K303144
CVNAPUTTRADEBULLISH01/19/24$95.00$129.7K303122

Where Is Carvana Standing Right Now?

  • With a volume of 9,268,837, the price of CVNA is down -8.31% at $35.55.
  • RSI indicators hint that the underlying stock may be oversold.
  • Next earnings are expected to be released in 86 days.

Options are a riskier asset compared to just trading the stock, but they have higher profit potential. Serious options traders manage this risk by educating themselves daily, scaling in and out of trades, following more than one indicator, and following the markets closely.

Insider Report

Buffet’s Berkshire Hathaway Acquires Alleghany for 11.6B

by Senior Analyst

Berkshire Hathaway Acquires Alleghany Insurance for $11.6B

Warren Buffet and Charlie Mungers' Berkshire Hathaway returned to its roots Monday in large corporate acquisitions. Following Insurance rate increases through much of the past quarter, and inflation continuing to prevail as a result of the Federal rate hikes. Berkshire-Hathaway is hedging against the current state of market volatility by reapplying Buffet and Mungers' dormant Investment principles unused by the pair for much of the last two decades. The firms biggest acquisition of the 2010s came in 2016 when it bought out all Precision Car parts shares for 36B. As Buffet returns to betting on large companies such as Alleghany that are due to make greater capital returns post pandemic. It is important to first recognize and accept the new normal in fees and rates that will stay present in our economy for years. Then begin working to understand and adapt moving forward out of recession.

Insider Report

RBC Payout

by Senior Analyst
Lawsuit Progress

During the Corona virus Pandemic in 2020. RBC (Royal Bank of Canada) Didn’t pay their traders profit for their trades, Not having enough capital on hand to payout than releasing their entire sales staff without having received pay for their work. The Defendant, Ex-Sales Director at RBC, and Current Sales Executive at Loop Capital /Coulter Capital Senior Analyst Brett H. Coulter Sued RBC for restitution on behalf of the entire Sales dept. he managed

Shortchanging Employees Case Update:

https://news.bloomberglaw.com/daily-labor-report/rbc-capital-markets-shortchanged-sales-employees-suit-says