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This was a second week of consolidation with generally good action in the Russell 2000 and NASDAQ.  The S&P 500 and DJIA suffered a bit more as TRADE WARS!!!(tm) fear affect companies in those indexes more than the companies in the former 2 indexes. Quite a few “gap ups” and “gap downs” this week as news overnight weighed on indexes.  A sample of this week’s fun:

After Beijing’s retaliation against U.S. planned tariffs on $50 billion worth of Chinese imports, Trump asked U.S. Trade Representative Robert Lighthizer late Monday to identify $200 billion more in Chinese products that could be subject to tariffs of 10%. The U.S. president also threatened to find $200 billion more worth of goods if China tried to retaliate against those additional tariffs.

“We’re still analyzing how much the trade policies, if they go through, would impact valuations and fundamentals. If tariffs continue to rise, that is a negative, and it could derail some of the confidence. However, so many issues like this either don’t end up happening, or they don’t happen in the worst-case scenario. A lot of what we’ve seen is just rhetoric, and if you try and trade off things like that, you’ll likely be wrong,” said Lance Humphrey, executive director of global multi-assets at USAA.

Seems like the Chinese market is taking these threats more seriously then U.S. markets.

For the week the S&P 500 closed down 0.9% while the NASDAQ retreated 0.3%.

Economic data was not market moving.

Worth showing the divergence of small caps which mostly are domestically focused (Russell 2000) vs the Dow Jones Industrial Average which is full of companies who sell internationally – here is a 1 month chart. (click to enlarge).  R2K up 3.5% vs DJIA -0.9%, in just 30 days!

Oil jumped Friday after members of the OPEC and other major producers struck a deal that would result in an effective rise in production of around 600,000 barrels a day, a figure that comes as a relief to bullish traders who feared a more aggressive increase.

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

The student loan bubble continues unabated…  a future crisis unfolding slowly but surely.

This chart only includes federal loans to students. Private loans increase the debt burden. The Federal Reserve Bank of New York regularly tracks household debt and credit. In their most recent update, they calculate student loan debt to be nearing $1.41 trillion.

Great infographic from Visual Capitalist on the major bull markets – the current one is about to be the longest in duration.  Here is a summary but the full infographic on the website is worth the click thru.

The week ahead…

As we said last week, trade wars stuff could be the main headline as economic data is light and we are in the gap between earnings seasons.

Index charts:

Short term: The S&P 500 held its breakout level at just over 2740 – watch that number next week.   The NASDAQ remains quite strong.

The Russell 2000 remains impressive.

The NYSE McClellan Oscillator has now been negative all week.  That’s a caution flag for short term traders.

Long term: Still very positive for the “buy and never sell” crowd.

Charts of interest / Big Movers:

Monday, Valeant Pharma (VRX) sunk 12.3% after the Food and Drug Administration failed to approve a lotion product intended to treat plaque psoriasis.   The stock had been on quite a run after a disaster 2017.

Rent-A-Center (RCII) jumped 22% Monday after it agreed to be taken private by Vintage Capital, a private and public equity firm, in a deal valued at about $1.365 billion.

Tuesday, Foundation Medicine (FMI) surged nearly 29% after Swiss health care group Roche Holding announced a $2.4 billion deal to buy the remaining shares of the genomic profiling group that it doesn’t already own.

Wednesday, Oracle (ORCL) fell 7.5% after an earnings beat was followed up by weak guidance.

Starbucks (SBUX) slumped 9.1% after saying it will close more coffee shops in an increasingly crowded U.S. market.

Friday, Red Hat (RHT) fell more than 14% a day after the software company gave a softer-than-anticipated quarterly outlook.

It is worth noting Etsy (ETSY) which we highlighted last week – this is called “holding a breakout”!

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

Original article: Weekly Market Recap Jun 24, 2018.

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After two weeks of rallies, the S&P 500 mostly consolidated this week – except for Friday the action was very reminiscent of 2017 with almost no volatility at all intraday and modest gains or sideways action.  Friday was the wrench in the mix, with a gap down to open the day but buyers came in during the afternoon and in the end the markets had a week to digest prior gains.  Friday’s action was due to TRADE WARS(tm)!

President Donald Trump approved tariffs on about $50 billion of Chinese goods, marking the latest escalation in the trade spat between the two countries. Beijing has said it intends to assess tariffs on a corresponding amount of U.S. goods, while Trump said the U.S. would pursue more tariffs if China retaliates. Subsequently, Trump said there was no trade war with China.

The Federal Reserve did what it had telegraphed what it would do:

The Federal Reserve voted to raise its benchmark federal funds rate by a quarter percentage point to a range of 1.75% to 2%. Eight of 15 Fed officials now expect at least four rate hikes will be needed this year, up from seven at the March meeting.

The Fed’s dot plot, a projection by the members of the central bank’s expectations for rates in the future, shows the policy-setting Federal Open Market Committee penciling in two additional rate increases in 2018 for a total of four increases in the year. That is up from expectations from three in the March Fed rate estimates.

More interesting this week was the European Central Bank which Thursday left interest rates unchanged and laid out plans to taper its program of monthly bond purchases later this year. The central bank is aiming to bring them to a halt by the end of 2018.   There was no “taper tantrum” by markets, as we saw in the Bernanke era.

“The ECB did a pretty good job telegraphing what it’s planning to do. [ECB President Mario] Draghi is following Ben Bernanke’s playbook, with a zero-interest-rate policy, bond buying, and then eventually shrinking the central bank’s balance sheet. When we did all that, our market continued to move higher, which gives investors confidence that the blueprint they’re following is the correct one,” said Phil Orlando, chief equity market strategist at Federated Investors.

For the week the S&P 500 closed up fractionally while the NASDAQ added yet another 1.3%!

On the economic front the consumer price index popped 0.2% in May; some funny headlines out there about that being the “hottest in 6 years!” – it’s an annualized rate of 2.4%… woo hoo.

The increase in the cost of living last month was spearheaded by the rising cost of gasoline, medical care and shelter — rent and home prices.  The cost of medical care has accelerated again after a slowdown toward the end of 2017. Ditto for rents and home prices.

Meanwhile the producer price index did surge 0.5% in May on the back of the big jump in oil.  Core producer prices that exclude food, energy and trade rose a much smaller 0.1% last month.

Retail sales jumped 0.8%, double expectations.

“U.S. households are back to their free spending ways, with the strength of May’s retail sales figures implying that second-quarter real consumption growth (and GDP growth for that matter) will now be more than 4% annualized. With the benefit of the tax cuts, strong employment growth and a slow acceleration in hourly wage growth, consumption growth should remain strong going into the second half of this year,” said Paul Ashworth, chief U.S. economist at Capital Economics.

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

Speaking of oil, the chart has a bit of a “bear flag” look to it which should make consumers happy if it fulfills.  Turn the chart upside down and looking at the most recent period you’d love to see that chart action if you were a bull – i.e. a breakout, consolidation with a minor pullback, then a push forward Friday.  Of course we are not looking at the chart upside down so it might bode well for bears – we shall see.

The week ahead…

No major economic news – trade war concerns certainly could pop up again.

Index charts:

Short term: The S&P 500 was quiet while the NASDAQ continued to churn up.

The Russell 2000 was steady as a rock in a consolidation phase after a huge run.

The NYSE McClellan Oscillator went slightly negative late in the week but not enough to raise eyebrows yet.

Long term: Still very positive for the “buy and never sell” crowd.

Charts of interest / Big Movers:

Monday, Sempra Energy (SE) jumped nearly 16% after activist investors Elliott Management and Bluescape Resources revealed a “value creation” strategy for the company.

Tuesday, Lands’ End (LE) soared 27% after the retailer said its first-quarter sales got a 12% boost from sales of uniforms to Delta Air Lines.

In this week’s biotech lottery, Galmed Therapeutics (GLMD) surged 151% Wednesday after successful trial results of its drug to treat nonalcoholic steatohepatitis.  You can say that again.

Thursday, Tailored Brands (TLRD) tanked 22% after the retailer late Wednesday reported comparable sales below analyst forecasts.

Also Thursday, Etsy (ETSY) jumped 26% after the company raised its 2018 revenue growth guidance range to 32% to 34% from the range provided last month of 22% to 24%.   Etsy said the increased guidance comes as it plans to increase the transaction fee it charges when a seller makes a sale. The fee was previously 3.5%, but will increase to 5.0% on July 16.

Go Twitter (TWTR) go!

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

Original article: Weekly Market Recap Jun 17, 2018.

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Last week was much like the ones we saw throughout 2017!  Up, up, up nice and slow…. with little volatility.   And new record highs.  Market news was quiet in general despite “global trade tensions”.   Really ….it was difficult to find much market moving news!  (Insert crickets chirping hee)

For the week the S&P 500 closed up 1.6% while the NASDAQ added 1.2%.  Some catch up from the S&P 500 after lagging the NASDAQ of late.

In economic data, U.S. factory orders fell by 0.8% in April, driven by a decline in commercial aircraft.  Tuesday, ISM services surged to 58.6 in May from 56.8 – any reading over 50 signals expansion and this one is near 60!  The U.S. trade deficit shrank 2.1% in April—before the Trump tariffs took effect—and tumbled to a seven-month low. But the gap is still on track to widen in 2018 to the highest level in a decade.

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

Elon Musk has launched a company to build tunnels underground.  He is selling flamethrowers at $500 a pop to help fund said company.   The first 1000 were sold last weekend.  This is a real story.  Seriously.

The devices, technically called “Not a Flamethrower” to skirt federal shipping regulations, shoot a two-foot flame.

The company had a good week even aside from that, surging 9.7% Wednesday, after Chief Executive Elon Musk told shareholders that the electric-car maker was “quite likely” to meet its production goal of 5,000 Model 3 cars a week.

The week ahead…

President Trump and North Korea’s Kim Jong-un will meet in Singapore on June 12; on the same day, the Federal Reserve will kick off its two day policy meeting. On Wednesday, the Fed has essentially telegraphed a rate hike to investors.  The ECB is expected on Thursday to outline its plan for eventually winding down its purchase of monthly bond buys—a process many economists expect to be completed by the end of the year.

May retail sales Thursday are expected to hit at +0.3%.

Index charts:

Short term: The S&P 500 finally broke out of this range marked in yellow.

The Russell 2000 was the first to breakout and still looks strong albeit over extended.

The NYSE McClellan Oscillator remains in a positive spot.

Long term: Still very positive for the “buy and never sell” crowd.

Charts of interest / Big Movers:

Monday, Nektar Therapeutics (NKTR) plunged 42% after “underwhelming” results from clinical trials of its cancer drugs in combination with Bristol-Myers Squibb’s cancer drug Opdivo.

Twitter (TWTR) is joining the S&P 500 index!  The stock reacted positively to the news Tuesday.

Thursday, Five Below (FIVE) jumped 22% after the discount retailer late Wednesday reported earnings that beat forecasts.

Furniture retailer Conn’s (CONN) jumped 21% Thursday after reporting earnings that topped forecasts.

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

Original article: Weekly Market Recap Jun 10, 2018.

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After 2 weeks of low volatility, that variable was introduced back into the holiday shortened week!  Another change from 2017 when almost every week was a low volatility week.   That said, small caps (Russell 2000) and tech stocks held in quite well and we don’t have any major technical change in the indexes – more on that later.

“Political drama in Italy” was what caused some ruckus Tuesday when traders returned from the long break.

“Today’s selling is happening on a larger volume, which is concerning. It means that investors are now worried about contagion from the fallout in Italy,” said Joe Saluzzi, partner and co-head of equity trading at Themis Trading.

And then Wednesday it was “not so much” as indexes rebounded.  With a “gap up” pre market. (A coalition government was formed later in the week).

“The fact that the market is shrugging off Italy’s political drama suggests that maybe it was a crowded trade that was being unwound and not something more serious,” said Michael Antonelli, equity sales trader at Robert W. Baird & Co.

Ah, she is a mercurial beast.

Thursday, TRADER WARS!! ™ were back on the forefront as the U.S. decided to impose tariffs on steel and aluminum imports from the European Union, Canada and Mexico.  Canadian Prime Minister Justin Trudeau said Ottawa would impose a 25% tariff on steel imports from the U.S., a 10% tariff on aluminum and other U.S. goods.

Friday, a Trump tweet about the employment data led to a “gap up”.

For the week the S&P 500 closed up 0.5% while the NASDAQ added 1.6%.  Second straight week of big outperformance by the NASDAQ.

Wednesday, the first revision of Q1 gross domestic product  showed the U.S. economy grew a touch softer than originally reported, mainly because of a slower buildup in inventories. GDP was trimmed to an annual 2.2% pace from 2.3%.  The Federal Reserve said in it’s “beige book” that the U.S. grew “moderately” from late April to early May.  ISM Manufacturing rose to 58.7 which is a quite strong number.

Friday’s employment report was a bit more positive than expectations with 223,000 new jobs created in May, while the unemployment rate fell to 3.8%. Wage growth was modest, with the yearly rate of pay rising to 2.7% from 2.6%.

“The market wanted a goldilocks jobs report and that’s exactly what May’s report was. The economy is still adding jobs but wage growth and inflation are not at extreme levels,” said Lisa Erickson, head of traditional investments for U.S. Bank Wealth Management.

“The latest jobs numbers only reaffirm the Fed’s plan to raise interest rates twice more this year — one in June and one in September, with a 50/50 chance of third hike in December,” said Wouter Sturkenboom, senior investment strategist at Russell Investments.

Probably the most interesting part of the report was Trump “front running” the news with a tweet that many read as signaling positive…

Financials had a rough week as the drop in Treasury yields hurt prospects for some fatter margins.

These market favorites just look so strong again….

Here is the 5 day weekly “intraday” chart of the S&P 500 …via Jill Mislinski.  (please note she transposed the words Thursday & Tuesday)

A lot of you folk are borrowing a LOT of money on new cars!

In the first quarter of this year, the average monthly loan payment for a new vehicle climbed $15 compared with last year, hitting an all-time high of $523, according to Experian. The credit analysis company’s review of new and open auto loans for the first three months of this year found buyers of new cars, trucks and SUVs borrowed an average of $31,453 — also a record high.

Experian says the average length of an auto loan in the first quarter was just over five years and nine months.

The week ahead…

Tuesday brings ISM Services but overall it appears not too much eye opening lays ahead outside of TRADE WARS!!(tm) – we’ll see if volatility dies down.

Index charts:

Short term: The S&P 500 remains mostly range bound and has for a few weeks, meanwhile the NASDAQ is looking a bit more spiffy of late.

The Russell 2000 has been the best of the bunch.  So far in 2018, the Russell is up 7.3% to the S&P 500’s 2.3% rise.

The NYSE McClellan Oscillator remains in a positive spot.

Long term: Still very positive for the “buy and never sell” crowd.

Charts of interest / Big Movers:

Wednesday, retailer Michael Kors (KORS) skidded 11% after the fashion house posted its results but investors are more concerned with weak sales growth going forward.

Meanwhile, Dick’s Sporting Goods (DKS) jumped 26% after the retailer reported first quarter earnings and revenue that beat expectations and raised its guidance.

Thursday, General Motors (GM) surged 12.9% after the car maker said the SoftBank Vision Fund plans to invest $2.25 billion in its self-driving unit.   Now the company just needs to announce it is using “block chain” to develop the self driving cars and the stock should double overnight.  Or was that a 2017 thing???

Hmmm even the discount retailers are getting hit on earnings – #AMAZON’D

This one has been in a death spiral for years – Sears Holdings (SHLD) fell 12.5% after the department store chain swung to a fiscal first-quarter loss and revenue fell sharply.   Seems like a likely candidate to some day be #TOYSRUS’D.

Yoga pants are still in fashion and Lululemon (LULU) late Thursday reported forecast-beating earnings and issued better than expected guidance.

Zuora (ZUO) soared 21% after the business-subscription software company late Thursday announced results and an outlook that topped expectations.

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

Original article: Weekly Market Recap Jun 3, 2018.

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The second week in a row of low volatility which is usually advantage bulls.  Monday saw a nice spike up for indexes and then the other four days of the week the range was very narrow.  Monday’s rally was due to the lessening chance of TRADE WARS!!(tm):

Treasury Secretary Steven Mnuchin said over the weekend that the Trump administration would delay implementation of tariffs on Chinese goods and “put the trade war on hold” while working out details of a deal between the countries.  At the end of trade negotiations that weekend, China agreed to buy larger amounts of U.S. goods to help narrow the trade deficit between the two economies, but didn’t agree to the specific U.S. target of $200 billion.

News was generally quiet but we did get the Fed minutes late Wednesday which were considered market positive.

Federal Reserve officials in their meeting in early May confirmed they planned to raise interest rates in June and were not concerned they were behind the curve on inflation.

“Most participants judged that if incoming information broadly confirmed their economic outlook, it would likely soon be appropriate for the FOMC to take another step in removing policy accommodation,” the minutes said

Although inflation hit the Fed’s 2% target in the latest reading for March, for the first time in a year, officials were not convinced it would remain there for long.

“It was noted that it was premature to conclude that inflation would remain at levels around 2%, especially after several years in which inflation had persistently run below the Fed’s 2% objective,” the minutes said. Only a “few” officials thought inflation might move “slightly” above the 2% target.

For the week the S&P 500 closed up 0.3% while the NASDAQ added 1.1%.

Outside of some housing reports, economic news was sparse.

Treasury yields dropped back down the 2.9% range this past week after popping to 3.1% the week before.

The dollar chart continues to strengthen.

After FIVE+ weeks of great action in the oil chart we finally saw some stumble Thursday, and then a sharp reversal Friday as there were reports that OPEC and Russia may increase production.

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

Apparently there are 101 people with over $1M in student loans….

Due to escalating tuition and easy credit, the U.S. has 101 people who owe at least $1 million in federal student loans, according to the Education Department. Five years ago, 14 people owed that much.  While the typical student borrower owes $17,000, the number of those who owe at least $100,000 has risen to around 2.5 million, nearly 6% of the borrowing pool, Education Department data show.

Warren Buffet’s empire in one infographic (click to enlarge)

The week ahead…

Markets will be closed Monday in observance of Memorial Day.  Friday brings ISM manufacturing and the May employment report with 190K jobs expected to have been created.

Index charts:

Short term: The S&P 500 is consolidating while the NASDAQ tipped its head over this trend line connecting highs of the year.

The Russell 2000 held its breakout.

The NYSE McClellan Oscillator remains in a positive spot.

Long term: Still very positive for the “buy and never sell” crowd.

Charts of interest / Big Movers:

Tuesday, home builder Toll Brothers (TOL) slumped 9.6% after the building company posted a 10% fall in second-quarter profit on higher impairment charges, and said gross margin fell.

Micron Technology (MU) rallied 6.4% Tuesday after the company raised its third-quarter outlook and announced a large stock-buyback program.

It was a good week for “luxury” as Tiffany & Co (TIF) jumped 23% Wednesday after it reported first-quarter results that came in above expectations .  Meanwhile Ralph Lauren (RL) rallied 14% after it posted fourth-quarter earnings and revenue that topped analyst forecasts.

Friday, Foot Locker (FL) soared nearly 20.2% after profit and sales for the sportswear maker beat forecasts.

Zoes Kitchen (ZOES) plunged 40% after the restaurant chain posted a bigger-than-expected first-quarter loss.

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

Original article: Weekly Market Recap May 27, 2018.

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This was a generally quiet week in the senior indexes, consolidating some of the prior week’s move up.   That said the Russell 2000 had some very nice action with a “breakout!”.  Otherwise pretty quiet on the news front except for TRADE WARS!(tm):

On Thursday, several news outlets reported that China had made an offer to cut its trade surplus with the U.S. by $200 billion, but a China official on Friday denied that an offer had been made.

For the week the S&P 500 closed down 0.5% while the NASDAQ fell 0.7%.  The Russell 2000 diverged, gaining 1.3%.

The only major economic report this week was retail sales which gained 0.3% in April vs a revised 0.8% gain (up from 0.6%) in March.

Treasury yields were back in focus as a move over 3% happened again.

“The additional backup [in yields] appears to be driven by stronger expectations for growth and inflation, and the potential for additional Fed action beyond September,” said Lindsey Piegza, chief economist for Stifel.

That was accompanied by some strength in the dollar chart.

Week FIVE of very good action in the crude oil chart.

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

The week ahead…

The Federal Reserve will release the minutes from its May 1-2 meeting, which could add to the dollar and Treasury yield climb should they sound a hawkish tone.  Not too much else on the docket that strikes the imagination at the moment.

Index charts:

Short term: The S&P 500 remains above this trend line connecting highs of 2018.

The Russell 2000 = boom!  This article states some reasoning for the divergence.

Small cap stocks tend to be more U.S. focused in terms of their geographic footprint and where they derive their revenue. As such, they are seen as insulated from all manner of international headwinds, including trade policy and other geopolitical tensions. Furthermore, they are not suffering from recent strength in the dollar, which typically emerges as a headwind for large cap companies by eroding their overseas profits.

According to FactSet, U.S. revenue exposure for the components of the Russell 2000 is 79.4%, well above the S&P’s 69.7% domestic exposure and the Dow’s 61.7%.

The NYSE McClellan Oscillator remains in a positive spot.

Long term: Still very positive for the “buy and never sell” crowd.

Charts of interest / Big Movers:

Tuesday, Agilent Technologies (A) dropped 9.7% after the maker of medical instruments and other equipment posted quarterly earnings that matched forecasts late Monday.

Wednesday, Macy’s (M) jumped 10.8% after the retailer reported upbeat sales and outlook.

Under Armour (UA) jumped 6% Wednesday, adding to a year to date surge. The stock is up nearly 40% since the start of the year.

Not as great of a story at J.C. Penney (JCP) as it slumped 12.4% Thursday after reporting a drop in first-quarter sales and cutting its outlook.

Same with Nordstrom (JWN) Friday, as it tumbled 10.9% after the retailer reported weaker same-store sales growth.

Minerva Neurosciences (NERV) rose by about 14% Thursday after reporting positive results from a drug trial.

Friday, Campbell Soup (CPB) dropped 12.4% after the company cut its full year guidance. The company also said Chief Executive Denise Morrison will retire, effective Friday.  With the drop in Phillip Morris (PM) mid April this has not been a good year for some of the low volatility “safety stocks”.

Applied Materials (AMAT) slid 8.3% after the chip maker on a weak sales outlook.

Not a big mover necessarily but a “nice chart” alert.

We highlighted Trade Desk (TTD) last week – this move continues.

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

Original article: Weekly Market Recap May 20, 2018.

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The indexes were looking a bit rocky the past few weeks, with a consolidation at lower levels with no real attempt at an upthrust — but the rally late in the week certainly helped prospects.   The bulk of weekly gains came Wednesday and Thursday but Thursday’s move up helped change the complexion of the S&P 500 and Russell 2000 charts which we’ll show below.   Trump made a speech “attacking” high drug prices Friday… but drug companies surged that day – so you can see how “biting” these proposals will be.  Consider “the swamp” fully loaded.

“Overall, this is quite underwhelming in scope,” said Craig Garthwaite, director of the health-care program at Northwestern University’s Kellogg School of Management. “The proposal is vague on details and filled with more slogans than actual sound economic policies.”

“They’ve confirmed this administration was and will remain very pro-pharma,” said Sanford C. Bernstein & Co. analyst Ronny Gal in an interview. He said the proposals won’t put “any significant pressure on pharma pricing,” and that some would be positive for the industry, such as pushing other countries to pay more.

For the week the S&P 500 closed up 2.4% while the NASDAQ gained 2.7%.

The consumer-price index rose 0.2% in April, while core CPI, which strips out food and energy, rose 0.1%. Traders looking for the inflation ghost were put to ease.

For the FOURTH week in a row we will highlight the crude oil chart as it is doing very bullish things!

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

Very cool representation of U.S. states by GDP if they were their own countries – pretty staggering how powerful the U.S. economically is when you look at it this way.

California’s gross domestic product of $2.75 trillion in 2017 basically matches that of the U.K., and it achieves this with 19.3 million workers, vs. Great Britain’s 33.8 million.  Texas…. produced nearly $1.7 trillion to match Canada. The Lone Star State accomplished this with 50% fewer workers.  The U.S. produced 24.3% of world GDP in 2017, with only about 4.3% of the world’s population. California, Texas and New York — if they were their own countries — would have ranked in the world’s top 11 largest economies.

The week ahead…

Retail sales on Tuesday are expected to be up 0.6%.  Pretty quiet elsewhere!

Index charts:

Short term: After a lot of consolidation at lower levels – which is a concern – we saw a reversal here late in the week.

The Russell 2000 – like the S&P 500 – broke a downtrend line (2 in fact)… but is near yearly highs already.

The NYSE McClellan Oscillator stayed in black all week after poking it’s head slightly over 0 the prior Friday.

Long term: Still very positive for the “buy and never sell” crowd.

Charts of interest / Big Movers:

Monday, Athenahealth (ATHN) jumped more than 16.4% after Elliott Management made a $7 billion bid for the company.

Tuesday, Hertz Global (HTZ) fell 18.7% after the car-rental company posted a wider-than-expected quarterly loss late Monday.

Also Tuesday, Dish Network (DISH) posted quarterly earnings that matched expectations. Shares slumped 12.1%.  Having a very rough 2018.

Dean Foods (DF) jumped 17% after the company reported better-than-expected earnings.

Wednesday, TripAdvisor (TRIP) soared 23% after the online travel booking service late Tuesday released results that topped Wall Street estimates.

Friday, The Trade Desk (TTD)  jumped 43.4% after the platform for managing digital-ad campaigns blew out earnings forecasts. It reported that streaming TV advertising surged nearly 2,000% over the year in the first quarter.   Adjusted for one-time items, Trade Desk said it earned $15.3 million, or 34 cents a share, compared with $7.8 million, or 18 cents a share, a year ago. Revenue rose to $85.7 million, from $53.4 million a year ago. Analysts had expected adjusted earnings of 10 cents a share on sales of $73.2 million.

Oppenheimer’s Brian Schwartz wrote that the company managed to post better-than-expected “61% revenue growth against one of the most difficult comparisons in its history.”

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

Original article: Weekly Market Recap May 13, 2018.

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The indexes continue to mark time range bound at lower levels (with moderately high volatility) which should be a concern for bulls until it changes.  Unlike consolidation after a move up, this is consolidation after a selloff which is not usually bullish.  Selling Monday and Wednesday was offset by a rally Friday; tech in general helped the market quite a bit this week with Apple (AAPL) contributing particularly.   The Federal Reserve meeting was a nothing burger.

The Federal Reserve acknowledged rising prices and said it now expects inflation to “run near” its 2% target “over the medium term,” in its most recent policy statement. The central bank held key rates unchanged, as expected.  Traders who bet on the timing of Fed rate hikes see a 94% probability of a rate hike in June.

Remember when tariffs were going to blow across the globe? Oh… a kick of the can:

President Donald Trump late Monday gave top allies—the European Union, Canada and Mexico—an extension to the tariff exemption to allow more time negotiate a new pact to avoid the levies. The tariffs of 25% on steel and 10% aluminum—already in effect against China, Russia, Japan and others—were slated to come into effect on May 1, but have now been pushed back to June 1.

For the week the S&P 500 closed down 0.2% while the NASDAQ gained 1.3%.

Tesla (TSLA) was so interesting this week it is worth it’s own section up here early in our recap – Musk is going full Tony Stark.  Thursday, the company lost 5.6% amid heavy trading volume. The electric-car maker beat expectations for adjusted losses and sales in its quarterly earnings, but shares dropped during a long conference call in which Chief Executive Elon Musk gave analysts and the media the cold shoulder.

Tesla Chief Executive Elon Musk held a long, odd earnings conference call Wednesday in which he insulted analysts, the media, federal regulators and people who died behind the wheel of his cars, and then told anyone concerned about volatility not to invest in his company.

When the question-and-answer session started, Musk turned vitriolic, and not even his fellow executives were safe. After Chief Financial Officer Deepak Ahuja referred to Tesla as “best in class” for batteries while responding to an analyst query, he was interrupted by Musk.

“The best. It is not a class,” Musk interjected.

“Yes, we’re the best. Sorry,” Ahuja replied.

“The best in a class of one,” Musk made sure to point out.

When RBC Capital Markets analyst Joseph Spak then asked how many people with Model 3 reservations were actually taking delivery of their cars, Musk declined to answer any more “boring,” “dry” questions.

“You’re killing me,” he said.

Instead, Musk turned to Galileo Russell, a YouTuber whom Musk allowed to ask a question after an online campaign to appear on the earnings call. Instead of a single question, however, Musk allowed Russell to ask roughly a dozen questions, few with much relation to the quarter in question or near-term Tesla performance. Russell instead focused on long-term goals, leading to an entertaining interview that Musk used to air his ire.

The ISM manufacturing index for April fell to 57.3 in April, a nine-month low. Construction spending rose 3.6% from the year-ago period.  The ISM nonmanufacturing index fell more than expected in April, dropping to 56.8.

The U.S. created 164,000 new jobs in April, below the 188,000 that had been expected.  Employment gains for March and April were revised up by a combined 30,000.  The unemployment rate fell to 3.9% from 4.1%, the first time the jobless rate has dropped below 4% since the end of 2000.    But the decline owed to a shrinking labor force and fewer people saying they were unemployed instead of an increase in how many people found work.

For the third week in a row we will highlight the crude oil chart as it is doing very bullish things!

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

Sell in May? Or just Stay?  Bespoke blog has some interesting commentary and analysis:

There are two important points worth making here.  First, returns during the November through April period clearly trump the returns of the S&P 500 during the May through October period.  Just as important, though, is that even as returns have been much weaker during the May through October period, if you had simply held on through both periods, your investment today would be worth more than double what it would be worth if you actually sold in May and got back in to the market at the end of October.

The week ahead…

We are in the tail end of earnings season, the employment and Federal Reserve meeting are done…. so… back to Trade Wars(tm)??

The U.S. asked China to cut its trade surplus by $200 billion while the Chinese officials sought to get Washington to ease national-security reviews of Chinese investments.

Index charts:

Short term: A lot of consolidation at lower levels. That is a concern for bulls.  More tests of the 200 day moving average – also not great.

The Russell 2000 is back over its 50 day moving average but below various trend lines connecting highs of the year.

The NYSE McClellan Oscillator did get back to positive Friday but was in the red most of the week.

Long term: Still very positive for the “buy and never sell” crowd.

Charts of interest / Big Movers:

Monday, Sprint (S) FELL 14% following news that the wireless carrier plans to merge with rival T-Mobile (TMUS).   If allowed by antitrust regulators, it would leave the U.S. wireless market dominated by three national players. It is the third time in recent years that the two rivals have attempted to merge.

Tuesday, Tenet Healthcare (THC) surged 19% after the company’s first-quarter earnings topped expectations late Monday.  Looks like ~100% gains year to date there!

Wednesday, Apple (AAPL) gained 4.4%, after the company late Tuesday posted better-than-anticipated earnings and revenue for the first quarter.   Then Friday, CNBC reported Berkshire Hathaway bought 75 million shares of the iPhone maker in the first quarter. The stock hit a record and had its biggest weekly gain since October 2011.

Snap (SNAP) i.e. Snapchat plummeted about 22% Wednesday, a day after reporting revenue and active daily users that were below forecasts.

This week in the biotech lottery, Esperion Therapeutics (ESPR) announced results for a late-stage clinical trial of its cholesterol-lowering medication. The stock plunged by 35% Wednesday; Thursday wasn’t much fun either.


Cardinal Health (CAH) plunged 21% after the company reported a third-quarter profit miss and lowered its 2018 adjusted earnings-per-share guidance.

Fitbit (FIT) fell 12% Thursday, after the wearable-devices company beat earnings expectations but disappointed with its outlook.

Friday, Pandora (P) soared about 20% after the streaming-music company late Thursday posted an earnings and revenue beat.

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

Original article: Weekly Market Recap May 6, 2018.

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Each year I do a deep dive post into my trading results and the trading tools I use. See: 2017, 2016, 2015.

Before we get to the results, here’s a quick summary of what’s happened here at StockTrader.com over the past year.

StockTrader.com Year in Review

Our free weekly market recaps published on Sundays, written by staff writer Mark Hanna, wrapped up the year with 22,325 subscribers. If you are not signed up yet, you can do using the form on the sidebar on any page.

Recaps aside, the Trade Journal continues to be an excellent free tool for analyzing completed trades. In 2017 we updated the tool to v3.0, which included a variety of updates, the largest being a brand new design that is 100% mobile friendly. No annoying ads either, this tool is seriously free-to-use.

Trade Journal users log thousands of stock trades each month. Our audacious goal for 2018 is to upgrade Trade Journal to track options, futures, forex, and crypto as well. See: The 3 Phases of Trade Analysis & The Big Secret Few Know.

Last but not least, site traffic had another strong year as we wrapped up 2017 with 2,337,723 visits from 1,761,123 unique visitors, totaling 3,671,611 pageviews. Awesome.

Trading Computer Setup

I always start this section by reminding readers, do NOT get suckered into paying several thousand dollars for a trading computer from a day trading / professional trading website you’ve never heard of!

You will be ripped off.

Instead, you can spend around $1000, or less (building your own rig works, too), and buy a fine desktop that supports, at the least, dual monitors. Most mid-tier gaming rigs work great for trading because they have a dedicated graphics card. Here’s a pre-filtered list on Amazon.com.

My trading station setup at work and home are identical. Same UpLift standing desk, similar spec machines, same monitor stand, same monitors, mice, keyboard, etc. This makes it seamless if I ever trade from home or a part breaks. While my desktops are a bit older, built back in late 2012, they still get the job done just fine. Also note, I fully embrace the health benefits of standing during the day and currently stand around 80% of the day.

PC Specs (rig originally built in 2012) – Six ASUS 24″ LED Monitors, Intel Core i7-3770 Processor, 8 GB Corsair Vengeance DDR3 1600 MHz memory, 2 AMD Radeon HD 7770 video cards, and a 120 GB ADATA S510 SSD Hard Drive.

My Portfolio Holdings

My day job is running our portfolio of websites including StockTrader.com as well as StockBrokers.com, ForexBrokers.com, and newest addition investor.com. Because of this, I trade only when I have free time.

More specifically, trading is strictly a passion and hobby. I do not trade for a living anymore. My retirement savings are 100% passively invested in the S&P 500 alongside a target date fund in my 401k. See: How to Build a Warren Buffett Portfolio.

For my taxable (non-retirement) portfolio, I was 100 / 0 (100% equities, 0% fixed income) for the first half of the year, but as the year progressed and the market climbed higher, I started reducing risk. Currently, I trade primarily with Fidelity and Vanguard. Just last month I locked in more profits and moved to a formal 60/40 portfolio, playing defensive as recently recommended by Howard Marks in his latest memo and Vanguard’s 2018 market outlook report. Here’s a current screenshot of my taxable portfolio allocation from my Personal Capital account,

Primary holdings:

Given my age, my personal (taxable) portfolio being 60/40 is, arguably, overly conservative. My outlook for the market in 2018 is to play defensive, thus less market exposure. Also, given the vast majority of my wealth is tied to our company, I could easily be 50/50 or even 40/60 and still not offset the significant risk of running an online media company. Bottom line, your situation may be completely unique from the next person.  For myself, I enjoy managing my portfolio and navigating the markets.

Taxable portfolios aside, I always remind young investors your retirement investments (IRA, 401k) should be invested according to your age and not touched. My retirement is somewhere around ~98/2, thus long ~98% equities (mostly via the Vanguard S&P 500). Betterment and Wealthfront are two great robo-advisors for young investors to consider if they want to passively index for the long haul. For investors who use an advisory firm, I recommend looking up their Trust Score on investor.com. Here’s the profile for Fisher Investments,

After placing my first trade at age 14, I did try full-time trading when I was 19, however, despite some success, it ultimately ended in failure. My portfolio size was too small, and even with an impressive win streak, one bad trade nearly wiped me out. Now that I am 31 and have 17 years of market “wisdom” under my belt, and I’ve learned numerous valuable lessons. See: 10 Trading Secrets I Wish I Knew When I Got Started.

Trading Results

Following Jack Bogel’s, “funny money” principles, I allocate less than 10% of my taxable portfolio to “speculating”, i.e., trading. I ended 2017 with a realized portfolio return of +$49.98, trading with an average position size of just $7,300. Wild stuff. I did not have any commission spend for 2017 thanks to taking advantage of a free trades offer at Fidelity (read my Fidelity review on StockBrokers.com). Like thousands of other users here on the site, I manually enter my trades using the free StockTrader.com Trade Journal.

For those that read this post each year, you will quickly notice how little I traded last year; this was one of my big, multi-year goals. TRADE LESS. In 2014, I made a whopping 443 round trips. In 2015 I cut that number down to 45, 2016 I had 15 trades, and now in 2017, I set a personal best of only seven trades.

Cutting back on trade frequency was no easy task for me. For years I struggled with over-trading which not only leads to expensive mistakes but hefty commission charges as well. Here’s a summary of my 2017 trades,

The best success I’ve had, to date, has been trading stocks that see extreme volatility after significant news breaks. If you look closely at the above trades, my best trades resulted from just this. I shorted Shopify (SHOP) for a quick profit after Citron tweeted and released a cautious video on Shopify, calling for FTC to investigate. After the Equifax (EFX) hack was revealed and the stock tanked, I bought shares and rode the rebound back higher for a nice profit. My largest loser was Apple (AAPL) when I made the dumb decision to short the stock heading into earnings. A gamble I lost and an example of how I broke my own rules. Discipline is tough to master.

Looking at 2018, I am going to continue to designate a small portion of my capital to speculate in the stock market. Each trade I accumulate more experience; the life-long journey to market mastery continues.

Investment Sites, Services, Subscriptions

The below services and subscriptions are part of my investment routine. It should be noted that several of these services are provided for me at no cost since we occasionally include research from the products in our market recaps. That said, I use all of these services.

  • Trade Journal – Free – Inspired by my passion for post-trade analysis alongside a goal to bring my personal excel trade log to the web, the StockTrader.com Trade Journal was born. This is where I log all my trades, notes, chart images, and analyze performance.
  • Evernote.com – Free – I love Evernote. Evernote is a journaling and note-taking app. My “Stock Research” notebook within Evernote currently has over 350 entries. Journaling has been a critical part of my growth as a trader and overall human being.
  • Briefing.com – Subscriptions start at $50 per month – Briefing.com (read my full Briefing.com review) is a 24/7 research service that monitors the markets, social sphere, and beyond to deliver real-time news and a slew of research reports. I started using Briefing.com in 2014 and have loved the service since.
  • Bespoke Investment Research – ~$400 per year up to ~$2,000 per year –  Bespoke Premium produces institutional market research reports. If you want to make sense of historical data to help break down the noise of the market and bring clarity, then Bespoke will serve you well. The Bespoke blog is a good feeler for the content provided to paid subscribers.
  • StockCharts.com – Free and paid (basic package $14.95 p/m) – StockCharts.com is the site we use to produce all the stock charts for the weekly market recaps here on StockTrader.com. The primary reason we have the basic package is so we can have access to more than three years of chart data and save chart layouts. The free version is the same as any paid package less a handful of features. See: 5 Best Free Stock Chart Websites
Closing Thoughts

I see investing as a lifelong game. Every trade is another lesson to be learned, and even though I have over a decade of “experience”, I am still learning something new each day.

How was your 2017 in the stock market? What tools and services do you use for your trading? Feel free to email me, “blain (AT) stocktrader (DOT) com” and let me know!

Original article: Tools of the ‘Trade’ – How I Invest (2018 Edition).

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StockTrader New Year’s Eve Edition!

Despite a hiccup on the last day of the year, indexes finished off a fantastic year in fine fashion with the S&P 500 surging 19.6% and the NASDAQ 28.4%!!  Keep in mind that is off a strong rally in November/December 2016 post election day.   Volume was extremely light as is usual for the week between Christmas and New Years Eve.   More crazy records being broke – it was the DJIA 9th positive month in a row – the first time that has happened since 1959.  The NASDAQ rose for the 6th straight year  – which last happened in 1975 to 1980.

“There’s not much happening, but the quiet action tells a really important story: it tells you the bulls remain in control, that sellers are few and far between, and that we’re waiting for the next big catalyst, which will probably be earnings,” said Adam Sarhan, chief executive of 50 Park Investments.

“Otherwise, we’re seeing the market digest a very strong 2017 rally. It is perfectly normal and healthy to see the market pause after a huge rally, and the absence of selling in and of itself is very healthy,” he said.

Selling late in the day Friday came in the last half-hour of trading, a fall that roughly corresponded with the publication of a Reuters report that Russian tankers had supplied fuel to North Korea in recent months.

Bitcoin fell nearly 10% Thursday after South Korea announced tougher measures to crack down on cryptocurrency trading.  That said, 10% is basically a daily move for this type of stuff!

Here are the best performers in the S&P 500 for 2017.  Align Technology is the maker of Invisalign dental braces.  Note the 2 home builders and chip makers.

Nothing market moving economically.

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

Interesting infographic on companies making the most profit PER employee globally.   (click to enlarge the graphic)

And then which companies make the most money PER second – you will know #1.

The week ahead…

From tax reform late in 2017 to a $1 trillion infrastructure spending bill in 2018.  You’d expect these sort of things when the economy is down not up.

First week of the month, we have our ISM #s and the employment data but right now the market is a non stop freight train so not sure what effect any economic report will have.

At some point in 2018 we will have a drawdown of more than 3% in markets, and some real volatility.  Hopefully!

Index charts:

Short term: The S&P 500 and NASDAQ were nowhere near even their 20 day moving average to end the prior week so it was a good week to consolidate some gains.

The Russell 2000 – not quite as off the charge rampant as the senior indexes but still a week of consolidation.

The NYSE McClellan Oscillator continues to not be great but certainly not any extreme red readings either.

Long term: Unicorns and rainbows continue.

Charts of interest / Big Movers:

More nonsense with the “block chain” stocks – any company now who puts out a press release with those words is getting bid up – we talked about a Long Island Ice Tea company last week doing it, and this week it was Parateum (TEUM) which rallied a cool 120% Tuesday after the provider of telecom software and systems said it has “completed development enabling it to add support of Blockchain technology to its billing and settlement services.”

Just so you know Stocktrader.com is working on block chain technology.   Don’t ask questions – just trust us, we promise.  Boom – we are now worth 100x what we were worth yesterday.

Massive move up in Energous Tech (WATT) after the FCC okay’d it’s wire free charging technology.

The system approved by regulators is called WattUp and uses radio frequencies to send power to devices that are within three feet of a transmitter. The company also has technology that can be used up to 15 feet away, but that hasn’t been cleared by regulators yet.

Oil’s chart is looking pretty strong here to end the year.

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

Original article: Weekly Market Recap Dec 31, 2017.

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