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Weekly Market Recap Apr 14, 2019

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It was generally a quiet week as not much progress or rumor on the “Chinese – U.S. trade deal” happened.  Four days of consolidation followed by a gap up Friday on strong bank earnings pre market (along with Disney news).  Markets also got a lift Friday from trade data released by China that showed March exports rose 14.2% from a year earlier versus forecasts calling for a rise of 8.7% and after a sharp drop in February. That said, imports were flagging, reflecting soft domestic demand and the growth spurt in exports may not be sustained.

On Wednesday the minutes of the last Federal Reserve meeting were released and it was dovish of course:

The Federal Reserve’s decision in March to cease raising interest rates this year was driven by unease over the U.S. and global economies and surprisingly subdued inflation, according to minutes of the pivotal central bank meeting.

“A majority of participants expected that the evolution of the economic outlook and risks to the outlook would likely warrant leaving the target range unchanged for the remainder of the year,” the minutes said.

Willie Delwiche, investment strategist with R.W. Baird said: “The Fed is trying to be transparent and say ‘we’re going to be on hold right now and we are going to give what we’ve done over the past two years time to settle and see what happens. The market seems to think that if you are tilting toward a ‘wait and see policy’ you are actually preparing for rate cuts this year.”

For the week, the S&P 500 gained 0.5% and the NASDAQ 0.6%.

Here is the 5 day weekly intraday chart of the S&P 500 … not via Jill Mislinski.

The week ahead…

Earnings get into full swing!  “S&P 500 earnings are expected to post a 4% year-over-year decline for the quarter. This would be the first quarterly year over year decline in earnings since second quarter 2016,” said Bill Stone, chief investment officer at Avalon Advisors LLC, in a note.

Index charts:

Short term: Improvement here as the S&P 500 finally cleared our long term trendline and didn’t immediately suffer a setback.  The NASDAQ looks very strong now as well.

The Russell 2000 finally is over the 200 day moving average… but just.

The NYSE McClellan Oscillator is comfortably back in the black.

Long term: Things are definitely looking up again.

Charts of interest / Big Movers:

Lyft (LYFT) had another rough week especially Wednesday as it sank 11% as investors focused on Uber Inc.’s plans for its own initial public offering. The stock has fallen more than 19% since Lyft’s March 28 IPO.  Uber is set to kick off its IPO market campaign, selling $10 billion in stock, according to a number of reports. That public debut is slated to take place as early as May.  Meanwhile, Pininterest is set to IPO this coming week.

Bed Bath and Beyond (BBBY) slumped 8.8% Thursday after it reported a big drop in sales, triggering concerns about the retailer’s efforts to improve its profitability.  The chart looks really strong still.

Walt Disney (DIS) surged 12% Friday after the entertainment giant said it would launch its Disney+ video-streaming business on Nov. 12 for $6.99 a month or $69 a year.  Here is both the short term chart as well as a longer term chart showing Disney launching out of a 3 year base.

Netflix (NFLX) took a hit Friday on the news.

JPMorgan (JPM) rose 4.7% Friday for their best earnings day since the release of second quarter 2012 results.

Chevron said it planned to purchase Andarko Petroleum (APC) in a cash-and-stock tie-up valued at $33 billion or $65 a share. Shares of Dow-component Chevron declined 4.9%, while Anadarko shares surged 32% on the takeover bid.

Have a great week and we’ll see you back here Sunday!



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Scott Kupor Interview with Michael Covel on Trend Following Radio

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Scott Kupor
Scott Kupor

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Scott Kupor is the managing partner of Andreessen Horowitz. He has overseen the firm’s rapid growth to one hundred fifty employees and more than $7 billion in assets under management.

What are venture capitalists saying about your startup behind closed doors? And what can you do to influence that conversation?

If Silicon Valley is the greatest wealth-generating machine in the world, Sand Hill Road is its humming engine. That’s where you’ll find the biggest names in venture capital, including famed VC firm Andreessen Horowitz, where lawyer-turned-entrepreneur-turned-VC Scott Kupor serves as managing partner.

Whether you’re trying to get a new company off the ground or scale an existing business to the next level, you need to understand how VCs think. In Secrets of Sand Hill Road, Kupor explains exactly how VCs decide where and how much to invest, and how entrepreneurs can get the best possible deal and make the most of their relationships with VCs. Kupor explains, for instance:

Why most VCs typically invest in only one startup in a given business category.

Why the skill you need most when raising venture capital is the ability to tell a compelling story.

How to handle a “down round,” when startups have to raise funds at a lower valuation than in the previous round.

What to do when VCs get too entangled in the day-to-day operations of the business.

Why you need to build relationships with potential acquirers long before you decide to sell.

Michael digs into Kupor’s firsthand experiences, insider advice, and practical takeaways. His book Secrets of Sand Hill Road is the guide every entrepreneur needs to turn their startup into the next unicorn.

In this episode of Trend Following Radio:

  • Secrets of Sand Hill Road: Venture Capital and How to Get It

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Weekly Stock Market Recap – Aug 11th 2019

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While the indexes posted modest losses for the weeks, it was a quite volatile week, especially in relation to most of 2019.  Indexes plummeted Monday on trade fears to their worst single day performance of 2019, captured back about half those losses Tuesday, then sunk again at Wednesday’s open before bulls posted a furious comeback during the day to get the market back to near even.  Thursday saw a surge, while Friday morning saw another significant selloff, followed by some buying in the afternoon to reduce losses.  That felt a lot like a typical day in 2008.

Monday, China allowed its currency to fall to a more than 10 year low versus the dollar.  Tuesday, China’s central bank moved to restrain the fall in its currency with a fix Tuesday at 6.9683 yuan. A breach of the 7-to-the dollar level on Monday, interpreted by some as an intentional weakening of its currency, helped to ignite a global stock market selloff and slump in bond yields.  By Friday it was back up to 7.01.

Trump continued to tweet about the Fed being too tight:

“Our problem is a Federal Reserve that is too… proud to admit their mistake of acting too fast and tightening too much (and that I was right!).”  The president said, the central bank “must cut rates bigger and faster, and stop their ridiculous quantitative tightening NOW”

A second week of swooning in 10 year Treasury rates:

China broke it’s 200 day moving average:

Gold also surged again this week as central banks in Asia (India, New Zealand, Thailand) and you can be sure markets will continue to point a gun at the Federal Reserve’s head to continue cutting here.

In economic news ISM Services fell to 53.7 from 55.1, which is both a pretty steep retreat and edging the reading closer to that all important 50 level.  This is the lowest reading since summer 2016.  While ISM Manufacturing has been weak for a while now, Services had held up.  Let’s see if that is a blip or the start of a trend.  The bond market is saying start of trend.

For the week, the S&P 500 fell 0.5% and the NASDAQ 0.6%.

Here is the 5 day weekly intraday chart of the S&P 500 … via Jill Mislinski.

Kylie Jenner earns $1.27 MILLION per sponsored post on Instagram.

The week ahead..

Fun fact: About 90% of the companies in the S&P 500 have reported actual results for in the second-quarter of 2019 as of Friday, with those earnings on pace for a 0.7% decline in S&P 500 earnings per share, or EPS, marking the first time the index has reported two straight quarters of year-over-year declines in earnings since 2016, wrote John Butters, FactSet analyst.

Most of the major reports are done but we have some like Nike, Walmart, Deere coming out this week.  Retail sales hit Friday.

Apparently we must now watch the China-U.S. currency cross rate each day now.  Until we don’t.

Index charts:

Short term: earlier in the year both the S&P 500 and NASDAQ formed a bearish “double top” – which led to a good bout of selling in May to early June.  That level was broken early July but now we are back below the breakout level.  Interestingly both Thursday and Friday the intraday high was essentially that breakout level!

The Russell 2000 temporarily fell out of the bottom of this range it has been in for almost all of 2019 much as it did 2 months ago.

The NYSE McClellan Oscillator reached rarely seen oversold levels at the worst of this week’s selling.

Long term: a pullback here on the weekly chart but big picture it’s been quite the recovery from late 2018 lows.

Charts of interest / Big Movers:

Tuesday, Dean Foods (DF) plummeted more than 36% after the milk-and-dairy products seller reported a wider-than-expected second-quarter loss and sales that rose less than analyst projections, amid volume pressure and an “accelerated decline” in the conventional white milk category.

Wednesday, home security camera company Arlo Technologies (ARLO) sunk 17.8% after the company reported better-than-expected results for its second quarter but delivered a disappointing outlook for the third quarter.

Roku (ROKU)  jumped 21% Thursday after the company late Wednesday topped expectations with its second-quarter results and issued and encouraging outlook.

Uber (UBER)  retreated 6.8% Friday after the ride-hailing service reported a huge $5.24 billion quarterly loss.

It’s been a heck of a year for Shopify (SHOP) which not only barely blinked this past week, but ended on all time highs!

Have a great week and we’ll see you back here Sunday!



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Matt Kepnes Interview with Michael Covel on Trend Following Radio

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Matt Kepnes
Matt Kepnes

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Ten Years a Nomad is author Matt Kepnes’ poignant exploration of wanderlust and what it truly means to be a nomad. Part travel memoir and part philosophical look at why we travel, it is filled with aspirational stories of Kepnes’ many adventures.

Kepnes knows what it feels like to get the travel bug. After meeting some travelers on a trip to Thailand in 2005, he realized that living life meant more than simply meeting society’s traditional milestones, such as buying a car, paying a mortgage, and moving up the career ladder. Inspired by them, he set off for a year-long trip around the world before he started his career. He finally came home after ten years. Over 500,000 miles, 1,000 hostels, and 90 different countries later, Matt has compiled his favorite stories, experiences, and insights into this travel manifesto. Filled with the color and perspective that only hindsight and self-reflection can offer, these stories get to the real questions at the heart of wanderlust. Travel questions that transcend the basic “how-to,” and plumb the depths of what drives us to travel ― and what extended travel around the world can teach us about life, ourselves, and our place in the world.

Ten Years a Nomad is for travel junkies, the travel-curious, and anyone interested in what you can learn about the world when you don’t have a cable bill for a decade or spend a month not wearing shoes living on the beach in Thailand.

In this episode of Trend Following Radio:

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