Connect with us

Strategies & Ideas

Weekly Market Recap Oct 21, 2018

Published

on


After the heavy selling the week prior there was sure to be an oversold bounce and indeed last Tuesday brought much of that.  It is always interesting to see what happens after that bounce – often in this bull market, once the indexes turn back up they move like a freight train.  This time – thus far at least – the action has been less aggressive.  Selling on Thursday took the S&P 500 right back down to the 200 day moving average and rally attempts Friday were fruitless.  In whole the S&P 500 barely budged for the week.

Yields on the 10 year have thus far held their own “breakout” level:

The Chinese market had an interesting Friday with an “outside reversal” day to the upside – that is a day where the price went both below the low of the prior day, as well as the high.  This happened the day after the index notched a new 4 year low.  This week’s action in that country’s market will be a tad interesting to watch.

China’s GDP grew 6.5% between July and September from the same quarter a year earlier, down slightly from 6.7% growth in the previous quarter and falling short of analysts’ expectations of 6.6% growth. However, the disappointing results were shaken off after officials said they were focused on supporting the stock market.

Yet a new low in these home builder stocks – one wonders if they are telegraphing an end to the housing boom.  Existing-home sales fell 3.4% in August, the lowest level since November 2015.

“Recent sluggishness seems increasingly driven by softer demand from would-be home buyers in the face of two emerging trends: falling rents and rising mortgage interest rates,” said Zillow Senior Economist Aaron Terrazas. “It all adds up to a situation in which supply-side factors are becoming less critical in driving home sales as they give way to softening demand. There’s still a lot of energy left in the housing market, but the rapid rise of the past few years has clearly begun to level off.”

For the week the S&P 500 rose fractionally while the NASDAQ fell 0.6%.

Retail sales rose just 0.1% for the second month in a row, the government said Monday. Wall Street had expected a 0.6% increase.  After a string of strong sales, bars and restaurants saw a big dropoff. Sales sank 1.8% in September to mark the biggest decline since the end of 2016.

“The underlying strength and confidence of the consumer still appear to have legs, and consumer spending should remain robust in the coming quarters,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors. “As such, we expect retail sales should bounce back in the coming months.”

“The hurricane in the Carolinas may have been responsible for some of the headline weakness,” wrote economists at CIBC World Markets.

The minutes of the Fed’s September meeting, released Wednesday, showed that a majority of policy makers believe interest rates must continue to rise until policy becomes restrictive.

“The market is interpreting the Fed minutes as slightly hawkish,” said Lindsey Bell, investment strategist with CFRA. For a while the market didn’t believe the Fed was serious about raising rates four times this year and three times in 2019, she said. But that changed after hawkish comments from Fed Chairman Powell earlier this month.

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

Remarkably there are countries out there where less than 5% of the population is connected to the internet.

The week ahead…

Earnings season will continue in earnest and we have some interesting charts to watch both here in the U.S. and China!

On the earnings front, 17% of companies in the S&P 500 have delivered third-quarter results so far. More companies are beating estimates than average, but the magnitude of the beats is smaller than average, said John Butters, senior earnings analyst at FactSet.

Index charts:

Short term: A lot of work to do to fix some of this damage in both charts.

This Russell 2000 is just in rough shape.

The NYSE McClellan Oscillator was at a very extreme level so we said watch for an oversold bounce last week.  That happened.  Now some of that selling pressure is relieved – but we are still in the red and hence it’s signaling caution.

Long term: So far both these support lines are holding – sure would be interesting to see what happens if they broke.

Charts of interest / Big Movers:

Netflix (NFLX) rose 5.8% Wednesday after it reported better-than-expected quarterly results.  But you can see those gains evaporated in the weak action to close the week.  Interesting to see how international the company has become.

International Business Machines (IBM) announced a revenue miss following the close on Tuesday. Shares fell 7.63% Wednesday.

Thursday, Endocyte (ECYT) soared 50% after Novartis said it would buy the cancer-drug maker for $2.1 billion.

Friday, PayPal (PYPL) surged 9.4% after the company boosted its outlook for the fourth quarter.

Ebay (EBAY) tumbled 8.9% Friday after analysts at Stifel Nicolaus downgraded the stock from buy to hold, citing PayPal’s earnings release, which suggested that the online retail would post disappointing gross merchandise volume when it reports on Oct. 30.

Procter & Gamble (PG) jumped 8.8% after reporting it’s best quarterly sales numbers in five years Thursday.

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



Source link

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Strategies & Ideas

Weekly Market Recap Feb 17, 2019

Published

on

By


The “V” shape bounce continues in unrelenting fashion as bulls are stampeding bears in 2019!  All due to a little “patience” from the Federal Reserve.  It is really quite breathtaking but we have seen it repeatedly the past decade as the Federal Reserve pours gas on the market.  Hopes for a deal with China also spurred the action upward.  Rallies (both with gap ups) on Tuesday and Friday provided the juice this week.   The S&P 500 is back over its 200 day moving average after being below for 46 days – it’s longest period of time below that level since March 2016.

Mat Klody, chief investment officer at Keebeck Wealth Management, told MarketWatch that the major benchmarks’ steady march higher since the beginning of the year is being driven “by the perception that the Fed has done a complete 180” in its apparent dovish turn, after raising rates four times last year.

U.S.-China trade talks wrapped up Friday in Beijing, with reports that negotiators remained deadlocked over key issues, but were set to resume discussions next week in Washington — viewed as a sign that both sides were eager to reach a deal ahead of the March 1 deadline.

In economic news, retail sales plunged 1.2% the largest single-month decline since 2009 and well below the flat growth expected by economists.  That said the market isn’t concerned with such things as it’s all about the Federal Reserve giving out goodies.   It will be interesting to see if there is a big jump next month as a “reversion to mean”.

Sales fell in every retail category except auto dealers and home centers. What’s was surprising was a 3.9% reported decline in sales at internet sellers. That would mark the sharpest drop since November 2008 — the middle of the last recession. Sales also fell at bars, restaurants, apparel stores, grocers, home furnishers, pharmacies and outlets that sell hobby items such as books and sporting goods.

“The consumer is no longer enjoying tax cuts or falling gas prices, but that’s no reason to expect a rollover,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.  “It’s a puzzle. Strong job gains, wage growth, and the drop in gasoline sales should be very supportive of consumer spending growth,” added Scott Brown of Raymond James.

For the week the S&P 500 gained 2.5% and the NASDAQ 2.4%.  That is 8 up weeks in a row!

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

The week ahead…

More talk about the US-China trade talk and seeing if the market can go down for a week.

Index charts:

Short term: the S&P 500 didn’t have much trouble with that 200 day moving average – the low 2800s is the next interest spot.  The NASDAQ is where the S&P 500 was a week ago.

Unlike 2018, the Russell 2000 seems to be patterning itself pretty closely to the S&P 500 and NASDAQ of late.

After 5 weeks in a row at abnormal levels of overbought the NYSE McClellan Oscillator is now just at a normal overbought level!

Long term: The S&P came a touch over our very long term weekly trend line.

Charts of interest / Big Movers:

Tuesday, Coty (COTY) jumped 13% after JAB holdings announced its plans to commence a tender offer to acquire 150 million shares of the company at a price of $11.65 a share, versus Monday’s closing price of $9.66 per share.

Molson Coors Brewing (TAP) slid 9.4% Tuesday after the beer maker reported higher-than-expected, fourth-quarter earnings but missed Wall Street’s revenue forecasts.

Thursday, Coca Cola (KO) fell 8.4% Thursday after the beverage giant reported results that showed the company falling short of fourth-quarter revenue expectations.

Bloomin’ Brands (BLMN) jumped 9% after the parent company of Outback Steakhouse reported fourth-quarter profits and sales that surpassed Wall Street expectations.

Six Flags (SIX) tumbled 13% after the firm reported weaker-than-expected fourth-quarter earnings.

Friday, Newell Brands (NWL) skidded 21% after the consumer-products company beat fourth-quarter earning and revenue expectations, but offered a downbeat outlook for 2019.

Also Friday, Mattel (MAT) tumbled 18.3%, notching its worst daily drop since Oct. 4, 1999, when shares cratered 29.6%. Friday’s decline for the toy maker came after it revealed that sales would remain flat this year.

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



Source link

Continue Reading

Strategies & Ideas

Ethan Kross Interview with Michael Covel on Trend Following Radio

Published

on

By


Ethan Kross
Ethan Kross

Subscribe to Trend Following Radio on iTunes

Ethan Kross is a professor of psychology at the University of Michigan. His research seeks to “Understand factors enabling people to adaptively regulate triggered impulses and emotions that undermine their goals and compromise their health.” He wants to resolve a key paradox in coping literature by finding insights and translating those insights to the rest of the world.

What got Ethan into studying behavior and how the mind works? Around the age of 4 or 5, whenever Ethan would get upset, his dad would ask him to “go inside” and look within himself to figure out why he was feeling how he was feeling. For years Ethan would do this as a positive coping mechanism. When he got to college he learned that when most look inside themselves to dig deeper, this takes them to a negative place. Introspection seemed to only prolong their negative feelings. This resonated with him and started him down his current path of asking “Why?”

Much of his work is focused on social media. In early 2010 Ethan became increasingly interested in Facebook. He found himself looking around his classroom and in the hallway–relentlessly seeing students with open Facebook windows on their phone. He wondered: “Are these students happier now that they have social media in their lives?” Ethan started digging and found research that was all over the place. Some studies would say, “People who are on Facebook are more happy” and then he would come across another study saying the complete opposite. He concluded that the methods in which those studies were using to gather data were grossly inefficient.

In this episode of Trend Following Radio:

  • Thinking objectively
  • Passive and interactive activities on social media
  • Experian sampling
  • Regulation on social media
  • LeBron James move from the Cavaliers
  • Self talk
  • Dealing with problems under stressed.

Mentions & Resources:





Source link

Continue Reading

Strategies & Ideas

Weekly Market Recap Feb 10, 2019

Published

on

By


A good week for the bulls once again as a very overbought market essentially went sideways to help work off some of those near term extreme conditions.  The S&P 500 stalled exactly at the 200 day moving average after a frantic rally the past month and a half.  It was generally a quiet week with lowered volatility as the word “patience” continues to have the investor class in a happy daze.

In economic news, ISM Services fell from 58.0 in December to 56.7 last month, below economists’ expectations of a 57.4 reading. A reading above 50 indicates an expansion in activity.

For the week the S&P 500 gained 0.1% and the NASDAQ 0.5%.  That is 7 up weeks in a row.

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

A couple of interesting infographics in regard to Facebook (FB) from Statista.  First the growth of employees – 2018 was pretty amazing growth for an already large company.

Second is how Facebook properties are dominating the newest area in social media: stories.

First introduced on Instagram in August 2016, the Stories format was heavily “inspired” by one of Snapchat’s most popular features and gradually found its way to all of Facebook’s social media and messaging apps.  All of Facebook’s stories features, i.e. Instagram Stories, WhatsApp Status (which might as well have been named Stories too) and Facebook Stories have surpassed Snapchat in terms of daily active users by now, regardless of whose idea it originally was. The ongoing shift towards stories at the expense of feeds in social media poses a new challenge for Facebook, because it’s unclear whether the new format can be monetized as effectively as the news feed.

The week ahead…

Earnings will begin to slow down, and move to the smaller type of companies.  The Fed remains on hold for half a year at minimum it seems.  News flow seems like it will be light with perhaps a nod to China-US trade talks.

Index charts:

Short term: the S&P 500 rallied exactly to the 200 day moving average.

Unlike 2018, the Russell 2000 seems to be patterning itself pretty closely to the S&P 500 and NASDAQ of late.

This is the 5th week in a row the NYSE McClellan Oscillator remains ABOVE the level it usually stalls out at: +55 to +65.

Long term: The S&P rallied exactly to our trend line which connects the major lows of 2017 and 2018, before stalling a tad.

Charts of interest / Big Movers:

Monday, Ultimate Software Group (ULTI) soared 20% after it agreed to be bought by an investor group led by Hellman & Friedman in an all-cash dealvalued at about $11 billion.

Tuesday, Estee Lauder (EL) rallied 12% after the cosmetics company posted fiscal second quarter earnings and sales beats and raised its full-year outlook.

Ralph Lauren (RL) jumped 8.4% Tuesday after the luxury lifestyle brand reported fiscal third quarter earnings and revenue that beat expectations.

Wednesday, Snap (SNAP) surged 22% after posting record quarterly revenue and narrowing its loss on the back of a boom in online advertising.  This one has been a massive disappointment since its IPO.

The power of Fortnite!  Electronic Arts (EA) sunk 13% Wednesday after the company missed holiday-season sales estimates and issued a downbeat outlook.  Apparently this was due to it’s major gaming release not having a “battle royale” component in initial release – i.e a copycat to Fortnite.  However Friday the company announced that battle royale game Apex Legends drew 10 million players in its first 72 hours.

Thursday, Chipotle (CMG) soared 11% after the restaurant chain reported adjusted quarterly earnings above expectations.

Twitter (TWTR) skidded 9.8% after the firm issued a downbeat outlook for the current quarter, while announcing it would stop reporting the monthly average user metric.

Mattel (MAT) shares were up 23% after beating Wall Street revenue and earnings forecasts.

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



Source link

Continue Reading

Trending

Copyright © 2017 Zox News Theme. Theme by MVP Themes, powered by WordPress.