As we write this now, futures nicely down. LITE just warned and warned badly. The stock is down over 30% in pre market:
Lumentum cut its fiscal second quarter earnings and revenue guidance sharply today, saying one of its largest Industrial and Consumer customers for laser diodes for 3D sensing requested Lumentum materially reduce shipments to them for previously placed orders scheduled for delivery in Lumentum’s fiscal second quarter.Per Lumentum’s 10K filing, Apple (AAPL) was the company’s biggest customer in fiscal 2018, accounting for 30% of total net revenue. Huawei accounted for 11.0% of total net revenue, as did Ciena (CIEN). It will be assumed that Apple is the customer in question. Accordingly, look for a trickle down effect in Apple supplier stocks today. AAPL is down almost $5 this morning on the news. Not helping futures with NDX futures down decently.
WE WROTE THIS YESTERDAY ON OUR WAY BACK HOME!
To all the the veterans of the U.S. Armed Forces and active duty members of the military, from 38,000 feet on our way back home to the great USA, we honor and thank you for your service, not only today but every day.
To the firefighters in California, to all affected by the fires, all our prayers. We know the areas well and cannot fathom what is happening or what we are seeing on the tv.
To Pete Davidson and Rep.elect, retired Lieutenant Commander and former Navy Seal Dan Crenshaw, THANK YOU THANK YOU. Thank you for just throwing a little harmony back into the realm. From afar, all we saw last week was both left and right pissing all over each other. Amazingly, in a week leading up to Veterans Day as well as the 100 year anniversary of Armistice day, both spent days whining and crying over whether a reporter touched an intern’s arm. We know. There is some serious shenanigans again going on in my home state of Florida but good to see a little respite.
To anyone who lives in Central Florida, this Wednesday is the 15th (maybe 16th or 17th, who’s counting) Kaltbaum family Thanksgiving dinner for kids and young adults from the Boys and Girls Clubs of Central Florida. Over those years, we have served somewhere in the neighborhood of 5,000-6,000 Thanksgiving dinners to these great kids. If you would like to volunteer, just email at
gkaltbaum@kaltbaum.net. Famed magician Kostya Kimlat and a few of his friends will be performing and you never know who else will show up.
https://www.youtube.com/watch?v=SCFXV6o7croAnd the markets:
From some of the deepest stretched, extended and oversold conditions, markets rallied. We had thought A LOW was put in 2 wednesday’s ago, but as usual, stronger than most expected. But outcome is what matters and while we think markets can still go a bit higher:
The transports, russell 2000, small-caps, mid-caps, nyse, sox, nasdaq, nasdaq 100, industrials, financials, regionals, materials, biotech, gold, silver, commodities, chemicals, autos, housing, housing-related, just about every foreign market and junk bonds ALL REMAIN BELOW THE ALL-IMPORTANT 200 DAY MOVING AVERAGE. Again, even with the rally off the lows…this tells you how deep the correction has been. The DOW remains the best index but this is not what we want to see. When markets go defensive, they usually buy up the DOW. A few DOW names are at new yearly highs.
On top of that, GROWTH continues to act horrid with growth’s rally looking like it ended during the day on Thursday. FAANG is now ———
Where’s the beef? Utilities, a few selective REITS, soft drinks, drugs, other consumer staples, discount retail, drug stores, managed care, …have we thrilled you yet? Sure, there are few growth names sticking out, coming off earnings reports. We just don’t think the market is conducive here…and certainly do not believe what is leading is the cream of the crop.
We do not think the next sell-off can take us down to the lows or break the lows. (later is another story) We just think this is going to be a “pain in the a–” market for now. Remember, it is our job to get THE BIG PICTURE correct. The minor stuff is what gets one in trouble. It is protecting capital and keeping good psychology during these times that saves the day for when great fat pitches are again available. We can promise you that fat pitches are few and far between in here.
