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Here Comes The Hangover: Soaring Prices Result In Record Crash In Home, Appliance Buying Plans

Here Comes The Hangover: Soaring Prices Result In Record Crash In Home, Appliance Buying Plans For t.....»»

Category: worldSource: nytMay 25th, 2021

NASDAQ Starts Second Half with a New Closing High

NASDAQ Starts Second Half with a New Closing High SPECIAL ALERT: Remember, we need your input to make next week’s new Zacks Ultimate Strategy Session episode the best it can be. There are two ways you can participate: 1) Zacks Mailbag: In this regular segment, Kevin Matras answers your questions ranging from current market conditions, general investing wisdom, usage of the Zacks Rank or any resources of Zacks.com and more. Pretty much anything goes.   2) Portfolio Makeover: Sheraz Mian and David Borun review a customer portfolio to give feedback for improvement. No need to send us personal information such as dollar value of holdings. Simply email us with all of the tickers you own. Just make sure to email your submissions for either one, or both, by tomorrow morning, July 2. Email now to mailbag@zacks.com. Coming off of the best quarter in more than two decades, the major indices started the second half of this difficult year with mostly positive results and a new closing high. You can probably guess that the milestone came from the NASDAQ, which rose 0.95% (or nearly 96 points) to a new record close of 10,154.63. Also, the S&P rose 0.50% to 3115.86. The Dow soared nearly 800 points in the first two sessions of this week with a lot of help from Boeing (BA). However, the index took a break on Wednesday and slipped 0.30% (or nearly 78 points) to 25,734.97. Just yesterday, stocks completed the best quarter in more than 20 years with the NASDAQ soaring 30.6%, the S&P up 20% and the Dow rising 17.8%.    We enjoyed a lot of good news on Wednesday, but perhaps none bigger than positive trial results for a potential coronavirus vaccine from Pfizer (PFE, +3.2%) and partner BioNTech.   The market always loves to hear about progress on the vaccine front. We’ve seen it soar on such news several times before… only for the air to come out of the balloon in subsequent days. So we’ll see where this story goes moving forward. But if it is something worth getting excited about, the best part is that Pfizer would be able to manufacture A LOT of it. Meanwhile, the ISM manufacturing index soared to 52.6% last month, which puts it above 50 (signifying expansion) for the first time since February. That was well ahead of expectations below 50. Also, ADP said private payrolls increased by 2.37 million in June. It’s an appetizer for tomorrow’s Government Employment Situation report, which comes a day early due to the market being closed on Friday for July 4th. Last month’s report was one of the most surprising in a long time, as the economy added 2.5 million jobs with the unemployment rate moving lower to 13.3%. The vaccine news and the economic data are welcomed developments for a market that’s growing increasingly concerned about rising coronavirus cases and stalled reopening plans. Let’s hope we get more positive headlines tomorrow as we head into the long weekend. Today's Portfolio Highlights: Value Investor: The portfolio is getting ready for the upcoming earnings season with a couple of new buys on Wednesday. Penske (PAG) is an auto, truck and logistics company that announced improvement across every segment in a business update about a month ago. Tracey likes PAG because it offers exposure to a couple of hot areas: car sales and logistics. Shares are up 40% in three months but still down nearly 23% for the year. The other buy is Donnelley Financial Solutions (DFIN), a Zacks Rank #1 (Strong Buy) global risk and compliance solutions company. The editor likes this name because of its software transformation strategy, which plans to expand its software solutions business by 10% each year until 2024. The segment saw record sales of $47.3 million in the first quarter. Shares are up more than 59% in the past three months, but still down nearly 20% so far this year. But Tracy wants you to be prepared for volatility with this small-cap. Read the complete commentary for more these new buys, including a closer look at their value characteristics.  Commodity Innovators: Copper prices are on the rise, so Jeremy took advantage by adding Freeport-McMoRan (FCX) on Wednesday. This Zacks Rank #2 (Buy) also mines gold and silver, which are on their own bullish runs. The editor sees FCX as a long-term holding and expects it to eventually get back to 2020 highs at $13 and maybe even 2019’s high of $15. The portfolio also sold VelocityShares 3X Long Gold ETN (UGLD) before it gets delisted, bringing a gain of 4.26%. Read the complete commentary for a lot more on today’s moves.  Home Run Investor: With a solid report from Micron, the semiconductor industry looks positive as we head into earnings season. Therefore, the portfolio added CyberOptics (CYBE) on Wednesday. This Zacks Rank #2 (Buy) is a leading provider of sensors and inspection systems, which are used on production lines that manufacture surface mount technology circuit boards and semiconductor process equipment. CYBE has beaten the Zacks Consensus Estimate for 11 straight quarters and is expected to generate earnings growth of 200% for the current year and another 36% next. See the full write-up for a lot more on this new addition. Healthcare Innovators: Cell therapy is a ground-breaking treatment that uses a patient’s own cells to repair damaged tissues. On Wednesday, Kevin got involved in this innovative field with the addition of Vericel (VCEL). The company has products that help to fix cartilage defects in the knee and severe burns… and it recently submitted a new candidate to the FDA. The company pulled its 2020 guidance due to the coronavirus cancelling elective surgeries, but sales are expected to soar 44% to nearly $180 million next year. Analysts were pretty excited about VCEL before the pandemic, and the editor thinks it will be hot once again moving forward. In fact, he expects the stock to breakout above $15 this quarter. Read the full write-up for more on this new addition. By the way, this portfolio had a solid session with a couple of the best performers of the day among all ZU services, including Global Blood Therapeutics (GBT, +11.6%) and CRISPR (CRSP, +6.8%). Stocks Under $10: It was a bit of a risk for Brian to add Bed Bath & Beyond (BBBY) on June 15. This specialty retailer of domestic merchandise and home furnishings has been under pressure for years now as consumers turn toward online shopping and away from brick-and-mortar. However, the editor thought he could get something out of this name… and he did! But it was never supposed to be a long-term holding. So with coronavirus cases on the rise, he thought this would be a good time to sell BBBY and take a nice 29.6% return in a little over two weeks. Have a Good Evening, Jim Giaquinto Recommendations from Zacks' Private Portfolios: Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>  Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021

S&P and NASDAQ Each Gain More Than 5% in April

S&P and NASDAQ Each Gain More Than 5% in April April may have ended with a whimper today as investors catch their breath after a prosperous deluge of Big Tech quarterly reports this week, but the month as a whole was fantastic with the market feeling pretty confident that we’re on the road to recovery. The S&P slipped 0.72% on Friday to 4181.17, putting it up for the week by… one point! Meanwhile, the Dow declined 0.54% (or about 185 points) to 33, 874.85 and the NASDAQ dipped 0.85% (or nearly 120 points) to 13,962.68. These indices were down approximately 0.5% and 0.4%, respectively, over the past five days. However, the data for April is as exciting as the weekly totals are boring. The NASDAQ jumped 5.4% this month and the S&P soared 5.2%. The Dow saw a nice advance of 2.7%. It was 30 days full of impressive economic data (especially a jobs number that was 250K better than expectations), noteworthy quarterly performances (especially the FAANGs this week) and a Fed that plans to stay super accommodative for the foreseeable future. As a result, we saw quite a few record highs. The market had an opportunity today to respond to the final FAANG report of the season. Last night, e-commerce giant Amazon (AMZN) reported first-quarter earnings that beat the Zacks Consensus Estimate by almost 62%, while revenue surged 44% to $108.5 billion. Shares responded well overnight to the release, but unsurprisingly the stock dipped 0.11% on Friday. That puts an end to a very lucrative Big Tech Week. The five major reports this week -- AMZN, Apple (AAPL), Facebook (FB), Alphabet (GOOG) and Microsoft (MSFT) – surpassed expectations, even if the market didn’t always reward them for their numbers. These names totaled $74 billion in earnings on $311.6 billion in revenues, according to our Director of Research Sheraz Mian. It's no wonder his latest article is titled: “Big Tech’s Best Growth Days May Be Behind It”.   Earnings season as a whole has been pretty good too. Of the more than 60% of S&P companies that have reported so far, total earnings are up 51.1% from last year and revenues have advanced 8.3%. And we’re not done yet! There’ll be over 1000 more reports next week. Today's Portfolio Highlights: Stocks Under $10: After cutting three names earlier this week, Brian has some spots to fill. On Friday, he picked up Israel Chemicals (ICL), a Zacks Rank #2 (Buy) manufacturer of specialty fertilizers and specialty phosphates, flame retardants and water treatment solutions. The company will be reporting before the open on May 6. It has an average earnings surprise of approximately 75% over the past four quarters. The stock also has a “wonderful chart” with a steady 45 degree angle upward, along with a good valuation and some great growth. Make sure to read the full write-up for more specifics on this new addition. By the way, this portfolio had two of the best performers among all ZU names on Friday as Freightcar America (RAIL) rose 11.2% and GT Biopharma (GTBP) advanced 9.3%.   ETF Investor: Housing was one of the red-hot areas in 2020, and the severe supply shortage promises to keep it scorching in 2021. The portfolio already has some exposure to this space through the SPDR S&P Homebuilding ETF (XHB), but Neena wants some more. The iShares U.S. Home Construction ETF (ITB) is the most popular homebuilder ETF. This market cap-weighted fund owns some of the biggest names in the field, including D.R. Horton (DHI), Lennar (LEN), NVR (NVR) and PulteGroup (PHM). They make up about 45% of the portfolio. This addition will give the service great exposure to the top-ranked construction space. Read the full write-up for more. Home Run Investor: For a while there, Apogee (APOG) was a true home run by soaring more than 100%. However, the stock pulled back after its earnings report. Brian was patient with this glass products company, but it has now slipped to a Zacks Rank #4 (Sell). Therefore, the editor finally sold APOG on Friday while he could still pull a nearly 70% profit in a little over six months. Technology Innovators: It’s the last day of the week and the last day of the month, so it’s a good time to take some cash off the table and open spots to be filled in the days ahead. The big winner was electronic manufacturer Jabil (JBL), which was sold today for a more than 50% return in about seven months. Brian also cleared some space by getting out of the underperforming NetScout Systems (NTCT) and Amkor Technology (AMKR) positions. Insider Trader: "Sell in May and go away is back in the news again, like it is every year at the end of April. Yawn. "What if you had sold last May and gone away until October? The S&P 500 was up 16% during that time while the NASDAQ added 24.6%. It's silly to market time based on some old standard that no one adheres to anymore. Let's forget the "sell in May" thing in 2021. "The bigger issue seems to be why big tech is not rallying on what were blockbuster earnings reports. In fact, a lot of stocks didn't get a bounce off of terrific earnings, across all sectors. Could another correction be coming soon?" -- Tracey Ryniec Have a Great Weekend! Jim Giaquinto Recommendations from Zacks' Private Portfolios: Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>  Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021

Cooler-Than-Expected CPI Keeps Stocks on Record-Setting Pace

Cooler-Than-Expected CPI Keeps Stocks on Record-Setting Pace SPECIAL ALERT: Remember, the August episode of the Zacks Ultimate Strategy Session is now available for viewing! Don’t miss your chance to hear: ▪ Sheraz Mian and Neena Mishra, CFA, FRM, Agree to Disagree on whether inflation worries are overblown ▪ Kevin answers questions in Zacks Mailbag on whether or not investors can focus on mutual funds and/or ETFs and forget about stock-market fluctuations; is buy-and-hold better than booking profits and rebuying at lower levels; and what the Zacks Rank and Style Scores tell investors about stocks ▪ Sheraz and David Bartosiak choose one portfolio to give feedback for improvement ▪ Market conditions from both fundamental and technical views ▪ The full list of top-performing stocks over the past 30 days ▪ New stocks added to the Zacks Ultimate portfolio ▪ And much more Simply log on to Zacks.com and view the August episode here. And please let us know what you think of these monthly episodes. Email all feedback to mailbag@zacks.com. The CPI report for July wasn’t as hot as investors feared, which allowed the S&P and Dow to secure another round of record highs on Wednesday. The NASDAQ, though, was left behind again as investors moved toward recovery names after the third positive development for the economy in the past four days. Consumer prices soared 5.4% year over year in July and rose 0.5% from the previous month, which were both pretty much in-line with expectations. (The annual number was 0.1% higher than the forecast.) Core CPI (which excludes energy and food) increased 4.3% over last year and was up 0.3% month-over-month, which was actually better than expectations for a 0.4% rise. In other words, inflation is still rocketing higher, but not as much as nervous investors were fretting about. The data lends some support to the Fed’s long-standing proposition that the soaring prices are only transitory.   “The market’s response was muted, as I suspect many market participants were bracing for a much larger number,” said Dan Laboe in Headline Trader. “Investors continue to deploy cash back into recovery-oriented sectors following this morning’s ‘goldilocks’ inflation data (not too hot, not too cold).” The end result on Wednesday was a session that looked a lot like Tuesday’s, including a couple history-making performances. The Dow advanced 0.62% (or around 220 points) to 35,484.94, while the S&P increased 0.25% to 4447.70. That makes two straight sessions of record highs for the indices. Also like yesterday, the NASDAQ didn’t join in on the fun and slipped 0.16% (or nearly 23 points) to 14,765.13. The CPI number marks another positive signal that this economic recovery is on track. In recent days we’ve also received a fantastic employment report on Friday that added 943K jobs in July, while yesterday saw the $1 trillion infrastructure bill pass the Senate. Next is the PPI report tomorrow and then we’ll have to see what the Fed’s plans will be moving forward.   Meanwhile, earnings season is winding down and “we can now say with full confidence that the earnings picture has not been this good in a long time”, according to our Director of Research Sheraz Mian. Of all the S&P companies that have reported so far (which is most of them), approximately 87% have beaten EPS estimates while more than 86% have topped revenue estimates. Make sure to read Sheraz’s brand new Earnings Trends article titled: “Taking Stock of the Impressive Earnings Picture”. Speaking of earnings, one of the big releases of the week comes tomorrow when Disney (DIS) goes to the plate. Also coming on Thursday is this week’s jobless claims. The last print was at 385,000, which was inline with expectations and the first result below 400K since mid-July. Today's Portfolio Highlights: Commodity Innovators: With grain prices moving sharply higher, Jeremy added two names on Wednesday that should put the portfolio in a good position to capitalize. The first pick up was Tractor Supply (TSCO), which is the country’s largest retail farm and ranch store. Shares of this Zacks Rank #2 (Buy) are breaking out today after a strong quarterly report that included a raised guidance, so the editor wants to “join the party”. The other buy is The Andersons (ANDE), a regional yet diversified grain merchandiser that beat the Zacks Consensus Estimate by 104% in its most recent report. This Zacks Rank #1 (Strong Buy) also “looks great on the technical front” and has a 2.5% dividend yield. TSCO is seen as a mid-term holding, while ANDE is a long-term. Meanwhile, gold looks “technically broken”, so Jeremy sold SPDR Gold Shares (GLD) and VanEck Vectors Gold Miners ETF (GDX) today. Read the full write-up for specifics on all of today’s moves. Home Run Investor: Today’s addition of Simply Good Foods Company (SMPL) gets the portfolio back to fully invested with 15 names. This Zacks Rank #1 (Strong Buy) makes nutrition bars, shakes and snacks through brands like Atkins, SimplyProtein and Atkins Endulge. In its most recent quarterly report, SMPL beat the Zacks Consensus Estimate by 48% and raised its guidance. The company has now exceeded earnings estimates for seven straight quarters with an average surprise of 33% over the last four. Earnings estimates for this fiscal year and next are on the rise. Margins are expanding as well, which should drive earnings and the stock higher moving forward. Learn more about today’s addition in the full write-up. In other news, this portfolio had the top performer among all ZU names on Wednesday as Open Lending Corporation (LPRO) rose 7.1% after a solid quarterly report. Surprise Trader: In just about two weeks, shares of AdvanSix (ASIX) have jumped double digits after the chemicals company reported a positive earnings surprise of more than 41%. It's four-quarter average beat is now over 50%. Dave decided to sell half of ASIX on Wednesday for a 21.1% return since being added on July 27. He’ll let the rest run for now. The new addition is Brinker (EAT), a restaurant company that you undoubtedly know through its Chili’s and Maggiano’s brands. It has topped the Zacks Consensus Estimate for 11 straight quarters now, and has a “pretty solid” Earnings ESP of 16.17% for the quarter coming before the bell on Wednesday, August 18. EAT also has the editor’s favorite divergence, as earnings estimates continue to rise while shares are well off the highs. The stock was added with a 12.5% allocation. See the complete commentary for more on today’s action. Have a Great Evening, Jim Giaquinto Recommendations from Zacks' Private Portfolios: Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>  Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021

Futures Rise On Taper, Evergrande Optimism

Futures Rise On Taper, Evergrande Optimism US index futures jumped overnight even as the Fed confirmed that a November tapering was now guaranteed and would be completed by mid-2022 with one rate hike now on deck, while maintaining the possibility to extend stimulus if necessitated by the economy. Sentiment got an additional boost from a strong showing of Evergrande stock - which closed up 17% - during the Chinese session, which peaked just after Bloomberg reported that China told Evergrande to avoid a near-term dollar bond default and which suggested that the "government wants to avoid an imminent collapse of the developer" however that quickly reversed when the WSJ reported, just one hour later, that China was making preparations for Evergrande's demise, and although that hammered stocks, the report explicitly noted that a worst-case scenario for Evergrande would mean a partial or full nationalization as "local-level government agencies and state-owned enterprises have been instructed to step in only at the last minute should Evergrande fail to manage its affairs in an orderly fashion." In other words, both reports are bullish: either foreign creditors are made whole (no default) as per BBG or the situation deteriorates and Evergrande is nationalized ("SOEs step in") as per WSJ. According to Bloomberg, confidence is building that markets can ride out a pullback in Fed stimulus, unlike 2013 when the taper tantrum triggered large losses in bonds and equities. "Investors are betting that the economic and profit recovery will be strong enough to outweigh a reduction in asset purchases, while ultra-low rates will continue to support riskier assets even as concerns linger about contagion from China’s real-estate woes." That's one view: the other is that the Fed has so broken the market's discounting ability we won't know just how bad tapering will get until it actually begins. “The Fed has got to be pleased that their communication on the longer way to tapering has avoided the dreaded fear of the tantrum,” Jeffrey Rosenberg, senior portfolio manager for systematic fixed income at BlackRock Inc., said on Bloomberg Television. “This is a very good outcome for the Fed in terms of signaling their intent to give the market information well ahead of the tapering decision.” Then there is the question of Evergrande: “With regards to Evergrande, all those people who are waiting for a Lehman moment in China will probably have to wait another turn,” said Ken Peng, an investment strategist at Citi Private Bank Asia Pacific. “So I wouldn’t treat this as completely bad, but there are definitely a lot of risks on the horizon.” In any case, today's action is a continuation of the best day in two months for both the Dow and the S&P which staged a strong recovery from two-month lows hit earlier in the week, and as of 745am ET, S&P 500 E-minis were up 25.25 points, or 0.6%, Dow E-minis were up 202 points, or 0.59%, while Nasdaq 100 E-minis were up 92.0 points, or 0.60%. In the premarket, electric vehicle startup Lucid Group rose 3.1% in U.S. premarket trading. PAVmed (PVM US) jumps 11% after its Lucid Diagnostics unit announced plans to list on the Global Market of the Nasdaq Stock Market.  Here are some of the biggest movers today: U.S.-listed Chinese stocks rise in premarket trading as fears of contagion from China Evergrande Group’s debt crisis ease. Blackberry (BB US) shares rise 8.7% in premarket after co.’s 2Q adjusted revenue beat the average of analysts’ estimates Eargo (EAR US) falls 57% in Thursday premarket after the hearing aid company revealed it was the target of a Justice Department criminal probe and withdrew its forecasts for the year Amplitude Healthcare Acquisition (AMHC US) doubled in U.S. premarket trading after the SPAC’s shareholders approved the previously announced business combination with Jasper Therapeutics Steelcase (SCS US) fell 4.8% Wednesday postmarket after the office products company reported revenue for the second quarter that missed the average analyst estimate Vertex Energy Inc. (VTNR US) gained 2.1% premarket after saying the planned acquisition of a refinery in Mobile, Alabama from Royal DutVTNR US Equitych Shell Plc is on schedule Synlogic (SYBX US) shares declined 9.7% premarket after it launched a stock offering launched without disclosing a size HB Fuller (FUL US) climbed 2.7% in postmarket trading after third quarter sales beat even the highest analyst estimate Europe's Stoxx 600 index rose 0.9%, lifted by carmakers, tech stocks and utilities, which helped it recover losses sparked earlier in the week by concerns about Evergrande and China’s crackdown on its property sector. The gauge held its gain after surveys of purchasing managers showed business activity in the euro area lost momentum and slowed broadly in September after demand peaked over the summer and supply-chain bottlenecks hurt services and manufacturers. Euro Area Composite PMI (September, Flash): 56.1, consensus 58.5, last 59.0. Euro Area Manufacturing PMI (September, Flash): 58.7, consensus 60.3, last 61.4. Euro Area Services PMI (September, Flash): 56.3, consensus 58.5, last 59.0. Germany Composite PMI (September, Flash): 55.3, consensus 59.2, last 60.0. France Composite PMI (September, Flash): 55.1, consensus 55.7, last 55.9. UK Composite PMI (September, Flash): 54.1, consensus 54.6, last 54.8. Commenting on Europe's PMIs, Goldman said that the Euro area composite PMI declined by 2.9pt to 56.1 in September, well below consensus expectations. The softening was broad-based across countries but primarily led by Germany. The peripheral composite flash PMI also weakened significantly in September but remain very high by historical standards (-2.4pt to 57.5). Across sectors, the September composite decline was also broad-based, with manufacturing output softening (-3.3pt to 55.6) to a similar extent as services (-2.7pt to 56.3). Supply-side issues and upward cost and price pressures continued to be widely reported. Expectations of future output growth declined by less than spot output on the back of delta variant worries and supply issues, remaining far above historically average levels. Earlier in the session, Asian stocks rose for the first time in four sessions, as Hong Kong helped lead a rally on hopes that troubled property firm China Evergrande Group will make progress on debt repayment. The MSCI Asia Pacific Index climbed as much as 0.5%, with Tencent and Meituan providing the biggest boosts. The Hang Seng jumped as much as 2.5%, led by real estate stocks as Evergrande surged more than 30%. Hong Kong shares later pared their gains. Asian markets were also cheered by gains in U.S. stocks overnight even as the Federal Reserve said it may begin scaling back stimulus this year. A $17 billion net liquidity injection from the People’s Bank of China also provided a lift, while the Fed and Bank of Japan downplayed Evergrande risks in comments accompanying policy decisions Wednesday. Evergrande’s stock closed 18% higher in Hong Kong, in a delayed reaction to news a unit of the developer had negotiated interest payments on yuan notes. A coupon payment on its 2022 dollar bond is due on Thursday “Investors are perhaps reassessing the tail risk of a disorderly fallout from Evergrande’s credit issues,” said Chetan Seth, a strategist at Nomura. “However, I am not sure if the fundamental issue around its sustainable deleveraging has been addressed. I suspect markets will likely remain quite volatile until we have some definite direction from authorities on the eventual resolution of Evergrande’s debt problems.” Stocks rose in most markets, with Australia, Taiwan, Singapore and India also among the day’s big winners. South Korea’s benchmark was the lone decliner, while Japan was closed for a holiday In rates, Treasuries were off session lows, with the 10Y trading a 1.34%, but remained under pressure in early U.S. session led by intermediate sectors, where 5Y yield touched highest since July 2. Wednesday’s dramatic yield-curve flattening move unleashed by Fed communications continued, compressing 5s30s spread to 93.8bp, lowest since May 2020. UK 10-year yield climbed 3.4bp to session high 0.833% following BOE rate decision (7-2 vote to keep bond-buying target unchanged); bunds outperformed slightly. Peripheral spreads tighten with long-end Italy outperforming. In FX, the Bloomberg Dollar Spot Index reversed an earlier gain and dropped 0.3% as the dollar weakened against all of its Group-of-10 peers apart from the yen amid a more positive sentiment. CAD, NOK and SEK are the strongest performers in G-10, JPY the laggard.  The euro and the pound briefly pared gains after weaker-than-forecast German and British PMIs. The pound rebounded from an eight-month low amid a return of global risk appetite as investors assessed whether the Bank of England will follow the Federal Reserve’s hawkish tone later Thursday. The yield differential between 10-year German and Italian debt narrowed to its tightest since April. Norway’s krone advanced after Norges Bank raised its policy rate in line with expectations and signaled a faster pace of tightening over the coming years. The franc whipsawed as the Swiss National Bank kept its policy rate and deposit rate at record lows, as expected, and reiterated its pledge to wage currency market interventions. The yen fell as a unit of China Evergrande said it had reached an agreement with bond holders over an interest payment, reducing demand for haven assets. Turkey’s lira slumped toa record low against the dollar after the central bank unexpectedly cut interest rates. In commodities, crude futures drifted lower after a rangebound Asia session. WTI was 0.25% lower, trading near $72; Brent dips into the red, so far holding above $76. Spot gold adds $3.5, gentle reversing Asia’s losses to trade near $1,771/oz. Base metals are well bid with LME aluminum leading gains. Bitcoin steadied just below $44,000. Looking at the day ahead, we get the weekly initial jobless claims, the Chicago Fed’s national activity index for August, and the Kansas City fed’s manufacturing activity index for September. From central banks, there’ll be a monetary policy decision from the Bank of England, while the ECB will be publishing their Economic Bulletin and the ECB’s Elderson will also speak. From emerging markets, there’ll also be monetary policy decisions from the Central Bank of Turkey and the South African Reserve Bank. Finally in Germany, there’s an election debate with the lead candidates from the Bundestag parties. Market Snapshot S&P 500 futures up 0.7% to 4,413.75 STOXX Europe 600 up 1.1% to 468.32 MXAP up 0.5% to 200.57 MXAPJ up 0.9% to 645.76 Nikkei down 0.7% to 29,639.40 Topix down 1.0% to 2,043.55 Hang Seng Index up 1.2% to 24,510.98 Shanghai Composite up 0.4% to 3,642.22 Sensex up 1.4% to 59,728.37 Australia S&P/ASX 200 up 1.0% to 7,370.22 Kospi down 0.4% to 3,127.58 German 10Y yield fell 5.6 bps to -0.306% Euro up 0.4% to $1.1728 Brent Futures up 0.3% to $76.39/bbl Gold spot up 0.0% to $1,768.25 U.S. Dollar Index down 0.33% to 93.16 Top Overnight News from Bloomberg Financial regulators in Beijing issued a broad set of instructions to China Evergrande Group, telling the embattled developer to focus on completing unfinished properties and repaying individual investors while avoiding a near-term default on dollar bonds China’s central bank net-injected the most short- term liquidity in eight months into the financial system, with markets roiled by concerns over China Evergrande Group’s debt crisis Europe’s worst energy crisis in decades could drag deep into the cold months as Russia is unlikely to boost shipments until at least November Business activity in the euro area “markedly” lost momentum in September after demand peaked over the summer and supply chain bottlenecks hurt both services and manufacturers. Surveys of purchasing managers by IHS Markit showed growth in both sectors slowing more than expected, bringing overall activity to a five-month low. Input costs, meanwhile, surged to the highest in 21 years, according to the report The U.K. private sector had its weakest month since the height of the winter lockdown and inflation pressures escalated in September, adding to evidence that the recovery is running into significant headwinds, IHS Markit said The U.K.’s record- breaking debut green bond sale has given debt chief Robert Stheeman conviction on the benefits of an environmental borrowing program. The 10 billion-pound ($13.7 billion) deal this week was the biggest-ever ethical bond sale and the country is already planning another offering next month A more detailed look at global markets courtesy of Newsquaw Asian equity markets traded mostly positive as the region took its cue from the gains in US with the improved global sentiment spurred by some easing of Evergrande concerns and with stocks also unfazed by the marginally more hawkish than anticipated FOMC announcement (detailed above). ASX 200 (+1.0%) was underpinned by outperformance in the commodity-related sectors and strength in defensives, which have more than atoned for the losses in tech and financials, as well as helped markets overlook the record daily COVID-19 infections in Victoria state. Hang Seng (+0.7%) and Shanghai Comp. (+0.6%) were also positive after another respectable liquidity operation by the PBoC and with some relief in Evergrande shares which saw early gains of more than 30% after recent reports suggested a potential restructuring by China’s government and with the Co. Chairman noting that the top priority is to help wealth investors redeem their products, although the majority of the Evergrande gains were then pared and unit China Evergrande New Energy Vehicle fully retraced the initial double-digit advances. KOSPI (-0.5%) was the laggard as it played catch up to the recent losses on its first trading day of the week and amid concerns that COVID cases could surge following the holiday period, while Japanese markets were closed in observance of the Autumnal Equinox Day. China Pumps $17 Billion Into System Amid Evergrande Concerns China Stocks From Property to Tech Jump on Evergrande Respite Philippines Holds Key Rate to Spur Growth Amid Higher Prices Taiwan’s Trade Deal Application Sets Up Showdown With China Top Asian News European equities (Stoxx 600 +0.9%) trade on the front-foot and have extended gains since the cash open with the Stoxx 600 now higher on the week after Monday’s heavy losses. From a macro perspective, price action in Europe has been undeterred by a slowdown in Eurozone PMIs which saw the composite metric slip to 56.1 from 59.0 (exp. 58.5) with IHS Markit noting “an unwelcome combination of sharply slower economic growth and steeply rising prices.” Instead, stocks in the region have taken the cue from a firmer US and Asia-Pac handover with performance in Chinese markets aided by further liquidity injections by the PBoC. Some positivity has also been observed on the Evergrande front amid mounting expectations of a potential restructuring at the company. That said, at the time of writing, it remains unclear what the company’s intentions are for repaying its USD 83.5mln onshore coupon payment. Note, ING highlights that “missing that payment today would still leave a 30-day grace period before this is registered as a default”. The most recent reports via WSJ indicate that Chinese authorities are asking local governments to begin preparations for the potential downfall of Evergrande; however, the article highlights that this is a last resort and Beijing is reluctant to step in. Nonetheless, this article has taken the shine off the mornings risk appetite, though we do remain firmer on the session. Stateside, as the dust settles on yesterday’s FOMC announcement, futures are firmer with outperformance in the RTY (+0.8% vs. ES +0.7%). Sectors in Europe are higher across the board with outperformance in Tech and Autos with the latter aided by gains in Faurecia (+4.6%) who sit at the top of the Stoxx 600 after making an unsurprising cut to its guidance, which will at least provide some clarity on the Co.’s near-term future; in sympathy, Valeo (+6.6) is also a notable gainer in the region. To the downside, Entain (+2.6%) sit at the foot of the Stoxx 600 after recent strong gains with the latest newsflow surrounding the Co. noting that MGM Resorts is considering different methods to acquire control of the BetMGM online gambling business JV, following the DraftKings offer for Entain, according to sources. The agreement between Entain and MGM gives MGM the ability to block any deal with competing businesses; MGM officials believe this grants the leverage to take full control of BetMGM without spending much. Top European News BOE Confronts Rising Prices, Slower Growth: Decision Guide La Banque Postale Eyes Retail, Asset Management M&A in Europe Activist Bluebell Raises Pressure on Glaxo CEO Walmsley Norway Delivers Rate Lift-Off With Next Hike Set for December In FX, not much bang for the Buck even though the FOMC matched the most hawkish market expectations and Fed chair Powell arguably went further by concluding in the post-meeting press conference that substantial progress on the lagging labour front is all but done. Hence, assuming the economy remains on course, tapering could start as soon as November and be completed my the middle of 2022, though he continued to play down tightening prospects irrespective of the more hawkish trajectory implied by the latest SEP dot plots that are now skewed towards at least one hike next year and a cumulative seven over the forecast horizon. However, the Greenback only managed to grind out marginally higher highs overnight, with the index reaching 93.526 vs 93.517 at best yesterday before retreating quite sharply and quickly to 93.138 in advance of jobless claims and Markit’s flash PMIs. CAD/NZD/AUD - The Loonie is leading the comeback charge in major circles and only partially assisted by WTI keeping a firm bid mostly beyond Usd 72/brl, and Usd/Cad may remain contained within 1.2796-50 ahead of Canadian retail sales given decent option expiry interest nearby and protecting the downside (1 bn between 1.2650-65 and 2.7 bn from 1.2620-00). Meanwhile, the Kiwi has secured a firmer grip on the 0.7000 handle to test 0.7050 pre-NZ trade and the Aussie is looking much more comfortable beyond 0.7250 amidst signs of improvement in the flash PMIs, albeit with the services and composite headline indices still some way short of the 50.0 mark. NOK/GBP/EUR/CHF - All firmer, and the Norwegian Crown outperforming following confirmation of the start of rate normalisation by the Norges Bank that also underscored another 25 bp hike in December and further tightening via a loftier rate path. Eur/Nok encountered some support around 10.1000 for a while, but is now below, while the Pound has rebounded against the Dollar and Euro in the run up to the BoE at midday. Cable is back up around 1.3770 and Eur/Gbp circa 0.8580 as Eur/Usd hovers in the low 1.1700 area eyeing multiple and a couple of huge option expiries (at the 1.1700 strike in 4.1 bn, 1.1730 in 1 bn, 1.1745-55 totalling 2.7 bn and 1.8 bn from 1.1790-1.1800). Note, Eurozone and UK flash PMIs did not live up to their name, but hardly impacted. Elsewhere, the Franc is lagging either side of 0.9250 vs the Buck and 1.0835 against the Euro on the back of a dovish SNB Quarterly Review that retained a high Chf valuation and necessity to maintain NIRP, with only minor change in the ordering of the language surrounding intervention. JPY - The Yen is struggling to keep its head afloat of 110.00 vs the Greenback as Treasury yields rebound and risk sentiment remains bullish pre-Japanese CPI and in thinner trading conditions due to the Autumn Equinox holiday. In commodities, WTI and Brent have been choppy throughout the morning in-spite of the broadly constructive risk appetite. Benchmarks spent much of the morning in proximity to the unchanged mark but the most recent Evergrande developments, via WSJ, have dampened sentiment and sent WTI and Brent back into negative territory for the session and printing incremental fresh lows at the time of publication. Back to crude, newsflow has once again centred around energy ministry commentary with Iraq making clear that oil exports will continue to increase. Elsewhere, gas remains at the forefront of focus particularly in the UK/Europe but developments today have been somewhat incremental. On the subject, Citi writes that Asia and Europe Nat. Gas prices could reach USD 100/MMBtu of USD 580/BOE in the winter, under their tail-risk scenario. For metals, its very much a case of more of the same with base-metals supportive, albeit off-best given Evergrande, after a robust APAC session post-FOMC. Given the gas issues, desks highlight that some companies are being forced to suspend/reduce production of items such as steel in Asian/European markets, a narrative that could become pertinent for broader prices if the situation continues. Elsewhere, spot gold and silver are both modestly firmer but remain well within the range of yesterday’s session and are yet to recovery from the pressure seen in wake of the FOMC. US Event Calendar 8:30am: Sept. Initial Jobless Claims, est. 320,000, prior 332,000; Continuing Claims, est. 2.6m, prior 2.67m 8:30am: Aug. Chicago Fed Nat Activity Index, est. 0.50, prior 0.53 9:45am: Sept. Markit US Composite PMI, prior 55.4 9:45am: Sept. Markit US Services PMI, est. 54.9, prior 55.1 9:45am: Sept. Markit US Manufacturing PMI, est. 61.0, prior 61.1 11am: Sept. Kansas City Fed Manf. Activity, est. 25, prior 29 12pm: 2Q US Household Change in Net Wor, prior $5t DB's Jim Reid concludes the overnight wrap My wife was at a parents event at school last night so I had to read three lots of bedtime stories just as the Fed were announcing their policy decision. Peppa Pig, Biff and Kipper, and somebody called Wonder Kid were interspersed with Powell’s press conference live on my phone. It’s fair to say the kids weren’t that impressed by the dot plot and just wanted to join them up. The twins (just turned 4) got their first reading book homework this week and it was a bit sad that one of them was deemed ready to have one with words whereas the other one only pictures. The latter was very upset and cried that his brother had words and he didn’t. That should create even more competitive tension! Back to the dots and yesterday’s Fed meeting was on the hawkish side in terms of the dots and also in terms of Powell’s confidence that the taper could be complete by mid-2022. Powell said that the Fed could begin tapering bond purchases as soon as the November FOMC meeting, in line with our US economists’ forecasts. He left some room for uncertainty, saying they would taper only “If the economy continues to progress broadly in line with expectations, and also the overall situation is appropriate for this.” However he made clear that “the timing and pace of the coming reduction in asset purchases will not be intended to carry a direct signal regarding the timing of interest rate liftoff.” The quarterly “dot plot” showed that the 18 FOMC officials were split on whether to start raising rates next year or not. In June, the median dot indicated no rate increases until 2023, but now 6 members see a 25bps raise next year and 3 members see two such hikes. Their inflation forecasts were also revised up and DB’s Matt Luzzetti writes in his FOMC review (link here) that “If inflation is at or below the Fed's current forecast next year of 2.3% core PCE, liftoff is likely to come in 2023, consistent with our view. However, if inflation proves to be higher with inflation expectations continuing to rise, the first rate increase could well migrate into 2022.” Markets took the overall meeting very much in its stride with the biggest impact probably being a yield curve flattening even if US 10yr Treasury yields traded in just over a 4bp range yesterday and finishing -2.2bps lower at 1.301%. The 5y30y curve flattened -6.7bps to 95.6bps, its flattest level since August 2020, while the 2y10y curve was -4.2bps flatter. So the market seems to believe the more hawkish the Fed gets the more likely they’ll control inflation and/or choke the recovery. The puzzle is that even if the dots are correct, real Fed funds should still be negative and very accommodative historically for all of the forecasting period. As such the market has a very dim view of the ability of the economy to withstand rate hikes or alternatively that the QE technicals are overpowering everything at the moment. In equities, the S&P 500 was up nearly +1.0% 15 minutes prior to the Fed, and then rallied a further 0.5% in the immediate aftermath before a late dip look it back to +0.95%. The late dip meant that the S&P still has not seen a 1% up day since July 23. The index’s rise was driven by cyclicals in particular with energy (+3.17%), semiconductors (-2.20%), and banks (+2.13%) leading the way. Asian markets are mostly trading higher this morning with the Hang Seng (+0.69%), Shanghai Comp (+0.58%), ASX (+1.03%) and India’s Nifty (+0.81%) all up. The Kospi (-0.36%) is trading lower though and is still catching up from the early week holidays. Japan’s markets are closed for a holiday today. Futures on the S&P 500 are up +0.25% while those on the Stoxx 50 are up +0.49%. There is no new news on the Evergrande debt crisis however markets participants are likely to pay attention to whether the group is able to make interest rate payment on its 5 year dollar note today after the group had said yesterday that it resolved a domestic bond coupon by negotiations which was also due today. As we highlighted in our CoTD flash poll conducted earlier this week, market participants are not too worried about a wider fallout from the Evergrande crisis and even the Hang Seng Properties index is up +3.93% this morning and is largely back at the levels before the big Monday sell-off of -6.69%. Overnight we have received flash PMIs for Australia which improved as parts of the country have eased the coronavirus restrictions. The services reading came in at 44.9 (vs. 42.9 last month) and the manufacturing print was even stronger at 57.3 (vs. 52.0 last month). Japan’s flash PMIs will be out tomorrow due to today’s holiday. Ahead of the Fed, markets had continued to rebound from their declines earlier in the week, with Europe’s STOXX 600 gaining +0.99% to narrowly put the index in positive territory for the week. This continues the theme of a relative outperformance among European equities compared to the US, with the STOXX 600 having outpaced the S&P 500 for 5 consecutive sessions now, though obviously by a slim margin yesterday. Sovereign bonds in Europe also posted gains, with yields on 10yr bunds (-0.7bps), OATs (-1.0bps) and BTPs (-3.2bps) all moving lower. Furthermore, there was another tightening in peripheral spreads, with the gap in Italian 10yr yields over bunds falling to 98.8bps yesterday, less than half a basis point away from its tightest level since early April. Moving to fiscal and with Democrats seemingly unable to pass the $3.5 trillion Biden budget plan by Monday, when the House is set to vote on the bipartisan infrastructure bill, Republican leadership is calling on their members to vote against the bipartisan bill in hopes of delaying the process further. While the there is still a high likelihood the measure will eventually get passed, time is becoming a factor. Congress now has just over a week to get a government funding bill through both chambers of congress as well as raise the debt ceiling by next month. Republicans have told Democrats to do the latter in a partisan manner and include it in the reconciliation process which could mean that a significant portion of the Biden economic agenda – mostly encapsulated in the $3.5 trillion over 10 year budget – may have to be cut down to get the entire Democratic caucus on board. Looking ahead, an event to watch out for today will be the Bank of England’s policy decision at 12:00 London time, where our economists write (link here) that they expect no change in the policy settings. However, they do expect a reaffirmation of the BoE’s updated forward guidance that some tightening will be needed over the next few years to keep inflation in check, even if it’s too early to expect a further hawkish pivot at this stage. Staying on the UK, two further energy suppliers (Avro Energy and Green Supplier) ceased trading yesterday amidst the surge in gas prices, with the two supplying 2.9% of domestic customers between them. We have actually seen a modest fall in European natural gas prices over the last couple of days, with the benchmark future down -4.81% since its close on Monday, although it’s worth noting that still leaves them up +75.90% since the start of August alone. There wasn’t much data to speak of yesterday, though US existing home sales fell to an annualised rate of 5.88 in August (vs. 5.89m expected). Separately, the European Commission’s advance consumer confidence reading for the Euro Area unexpectedly rose to -4.0 in September (vs. -5.9 expected). To the day ahead now, the data highlights include the September flash PMIs from around the world, while in the US there’s the weekly initial jobless claims, the Chicago Fed’s national activity index for August, and the Kansas City fed’s manufacturing activity index for September. From central banks, there’ll be a monetary policy decision from the Bank of England, while the ECB will be publishing their Economic Bulletin and the ECB’s Elderson will also speak. From emerging markets, there’ll also be monetary policy decisions from the Central Bank of Turkey and the South African Reserve Bank. Finally in Germany, there’s an election debate with the lead candidates from the Bundestag parties. Tyler Durden Thu, 09/23/2021 - 08:13.....»»

Category: blogSource: zerohedge54 min. ago

Three Themes Coalescing – Crescat Capital

Crescat Capital’s commentary for the month of September 2021, discussing the three themes coalescing. Q2 2021 hedge fund letters, conferences and more Dear Investors: Three Themes Coalescing With unsustainable imbalances in the global economy and financial markets today, we see unprecedented opportunities to grow and protect capital in both the near and long term. Crescat […] Crescat Capital’s commentary for the month of September 2021, discussing the three themes coalescing. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Henry Singleton Series in PDF Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q2 2021 hedge fund letters, conferences and more Dear Investors: Three Themes Coalescing With unsustainable imbalances in the global economy and financial markets today, we see unprecedented opportunities to grow and protect capital in both the near and long term. Crescat is focused on investment strategies that offer uncommon value and appreciation potential. We believe that all of Crescat’s strategies offer an incredible entry point today based on the firm’s three core macro themes: China credit collapse Record overvalued US equity market top Flight to safety into deeply undervalued gold, silver, and precious metals miners We have researched and written extensively about these themes over the last several years in our investor letters. In our strong view, these are the three biggest macro imbalances and investing opportunities in the world today. The three themes are coalescing at this very moment before the world’s eyes in a likely financial market collision and Great Rotation. We believe our portfolios will be the beneficiary. Our positioning is contrary to many common investment portfolios in the world today. We think too many are over-weighted in extremely overvalued US growth stocks and FAAMG. Most are unprepared for a China monetary collapse or a US stock market downturn. We think too few are positioned for the inevitable stagflation that our models suggest is ahead. As value investors, we are comfortable accepting a reasonable amount of risk to realize the strong returns that are possible from our macro themes and valuation models. Our investment principles and models give us the confidence that the intrinsic value of our portfolios is significantly greater than the current market price at any given time. The combination of already substantial rising inflation in the US along with a China credit collapse, just as the Fed is attempting to taper, is the catalyst for all three of our themes to begin unfolding now. We are headed for a major shake-up in the world’s financial markets at a time of both historic global debt-to-GDP imbalances and record central bank money printing. A Value Approach Our stance is bold. It is highly analytical, valuation-based, and macro driven. As such we are willing to withstand a moderate amount of volatility as markets undergo a re-pricing to realize the ultimate capital appreciation that is attainable from our views. The confidence in our value-based investment process is what gives us the conviction to withstand higher volatility than the average fund manager. Our investment process uses equity and macro models to ensure that the intrinsic value of our portfolios, through discounted cash flow and relative-value methodologies, is always substantially greater than where the market is pricing them today. It is important that Crescat clients embrace a similar value-oriented and long-term mindset to have the confidence that short-term setbacks in Crescat’s strategies are not a permanent loss of capital. The market price of Crescat’s activist long precious metals holdings has fallen in August and September month to date, affecting the long side of all the firm’s strategies. We think this is a mere short-term pullback that presents an incredible buying opportunity. We have the utmost confidence that these positions can deliver extraordinary long-term gains over the next three to five years based on our valuation approach. We have an extensive model to value these holdings based on conservative assumptions. We believe our portfolio of 90+ activist precious metals companies is worth 11 times where the market is valuing them today. That is at the current gold price. They are worth even more than that in a significantly rising new gold and silver bull market that our macro models are forecasting. Pullbacks are a necessary part of the path to delivering substantial long-term returns that more than compensate for the risk. It is the macro imbalances that allow us to enter long positions cheaply and short positions dearly to ultimately deliver outsized appreciation. As value investors, we believe short-term setbacks in Crescat’s strategies offer great opportunities for both new and existing investors to deploy capital. We are firmly positioned in a diversified deep-value portfolio of the most viable new gold and silver deposits on the planet. We own these companies early in what is likely to be a long-term industry cycle for precious metals mining after a decade long bear market. Our companies hold over 300 million target gold equivalent ounces. While the world has largely shunned gold mining stocks since their last major bull market that ended in 2011, in the past year and a half, we have been busy doing private placements to fund the world’s most viable new exploration projects, thereby acquiring gold and silver for literally pennies on the dollar ahead of what we believe will be a new M&A cycle for the mining industry. We very strongly believe that the recent selloff in precious metals, due to Fed taper concerns, is way overdone and that our strategies are poised for a major turn back up in the near term. Our gold and silver holdings have improved over the last two days, and hopefully, it is the turn already. Buy the Dip in Precious Metals The pullback in Crescat’s performance over the past two months, including September month to date, has been almost entirely attributable to our long precious metals positions across all strategies. It is important to understand that these positions were also big winners for us in the prior year through July 2021. The Crescat Precious Metals Fund, our newest fund that is solely focused on this theme, delivered a 235% net return through July in a moderately down gold and silver market. That was the first 12-month period of this fund. Imagine what we should be able to do in a bull market for precious metals. Our precious metals stocks are ultra-deep value positions with incredible appreciation potential still ahead thanks to the expertise of Quinton Hennigh, PhD, Crescat’s Geologic and Technical Director, and his 30+ years of experience in the gold mining exploration industry. The last two months’ sell-off in gold and silver should mark the recent bottom or very close to it. March 2020 was what we believe was the primary bottom of what was a 10-year bear market for junior gold mining stocks. The majors have left exploration to the juniors, so these are the companies that control the world’s next big high-grade gold deposits after a decade of underinvestment in exploration and development. The fact that gold along with our mining portfolios have been catching a safe-haven bid in the market in the last two days as the China Evergrande collapse has caught the world’s attention is phenomenal! This is exactly how a safe-haven currency and the best new gold and silver deposits on the planet should act as a renewed, sober financial order of the world that should emerge as China and the US stock market go into a structural downturn if not outright meltdown. China’s "Mises Moment" The massive US$300 billion China Evergrande collapse feeds into the much bigger $52 trillion Chinese banking system. The latter in our analysis is a phony financial accounting that we can only liken to the largest Ponzi scheme in financial world history. Wall Street came out in force today trying to calm its clients by saying that Evergrande is not China’s Lehman moment. We agree, it is not. It is much bigger than that. The scale of China’s credit bubble is unimaginable. It is 4.5 times the banking bubble in the US ahead of the Global Financial Crisis in absolute as well as relative to GDP terms! US banks were only a US$11 trillion asset bubble at the time when the US GDP was at about the same level as China today. It is not even a Minsky moment. We think China is about to face what we would call a “Mises moment”. China’s unsustainable world-record credit expansion has simply gone on far too long already to where they have only one alternative to reconcile it. All paths lead to a massive currency devaluation. Ludwig von Mises, one of the venerated founders of the Austrian economics school, describes it like this: “There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.” We think most of the financial world is not prepared at all for a China currency collapse. In our global macro fund, we are positioned for a substantial China yuan devaluation and possible de-pegging of the Hong Kong dollar. The latter is an extremely cheap put option. The yuan collapse is inevitable in our view. We have been writing about it for years and believe it is highly prudent to be positioned now. We hold an asymmetric trade with capped downside and large uncapped upside where we are long the dollar and short China’s two primary currencies, the yuan and Hong Kong dollar, through USDCNH and USDHKD call options with tier-1 US bank counterparties. US Stock Market Top In our analysis, China’s financial woes will absolutely be contagious with the US and the world. It is already happening. There is a strong chance that the US equity market has already topped out as of Sep 2 on both the S&P 500 large cap index and the Wilshire 5000 total market index. This has been arguably the most speculative US stock market in history with the highest valuation multiples to underlying fundamentals. In our strong view, there is much downside ahead for broad US stocks. We are determined to capitalize on the equity downturn with overvalued US short positions based on our equity models in our global macro and long/short funds. US stock and credit market’s historic valuations are compliments of rampant speculation underwritten by the Federal Reserve. These asset bubbles are ripe for bursting. The catalyst is the dual combination of rising inflation in the US and a credit crisis in China. We think most investment managers, including hedge funds, are afraid to short stocks and will be caught wrongfooted. Our macro and equity models give us the conviction to be short today. Our firm has an excellent track record of protecting capital during market downturns via our short positions. See our performance reports which show Crescat’s negative and low “downside capture ratio” versus the market in our global macro and long/short hedge funds respectively compared to the S&P 500 and other hedge funds over the long history of these two strategies. Crescat Global Macro’s negative downside capture ratio since inception means that on average it has made money historically when both the market and the hedge fund benchmark has been down. In fact, both funds were up substantially in March 2020, the month of the Covid crash. Gold Wins Whether Safe-Haven Flight or Inflation Hedge On China’s woes, gold should be getting the monetary metal safe-haven bid even though ultimately it is the inflation protection buying on the back of a fiat currency war that makes gold the most attractive to us. When the Fed acts with new measures to counter the strong dollar vs. yuan that would otherwise crimp the US economy, that is when precious metals should go ballistic. We need to be positioned for all of that now, and we are. The Fed is expected to announce the taper tomorrow. A fully committed taper announcement would likely only further catalyze China’s credit collapse and the US equity downturn in our opinion. That is a possibility, but we think a soft taper announcement with a lot of hedging language given China and the potential contagion effects is a more likely event. It still should not stop the US equity market downturn, and it will do nothing to help China. If it is a hard taper, it is just game-on even more so for our equity short positions and China yuan puts. Regarding precious metals, the odds are that gold has already fully priced in the taper based on its pullback over the last two months. If the Fed gives us the “soft taper”, it should allow gold to catch a huge bid and be off to the races. Current Inflation Spike Already Rivals Stagflationary 1973 and 1980 The US Consumer Price Index has risen from 0.3% annualized to 5.3% over just the last 15 months. The last two times we saw this big of a rise over this short of a time were in 1973 and 1980, the two most notorious episodes of stagflation and rising gold prices in US history. Just like in the 1970s, policy makers are trying to tell us not to worry because inflation is “transitory”. But just as then, there is a host of “non-transitory” drivers that include an incipient wage-price spiral, the lag-effect of rents to already substantially higher housing prices, global supply chain shocks from Western trade disintegration with China, and highly probable ongoing deficit spending and debt monetization in the US as far as the eye can see. The big difference between today and the 1970s stagflation is that the Fed has not done anything to fight rising inflationary pressures but instead has done everything to aid and abet them. For instance, from 1972 to 1973, the Fed had already raised its funds rate from 3.5% to 10.8%. And, from 1976 to 1980, it raised the rate from 4.7% to 17.6%. In contrast today, the Fed has kept the funds rate at 0% for the last 16 months and engaged in $4.3 trillion of quantitative easing over the last 18 months monetizing 88% of $4.9 trillion in new debt taken on by the US Treasury over the same time. Fed officials must be looking at this data and internally freaking out. That is why they are probably seriously considering tapering. Stagflation When monetary policy becomes truly extreme, like it was when the US abandoned the gold standard, for instance, we can get both inflation and a stock market crash at the same time. 1973-74 was the prime example. Gold stocks went up 5x in just two years while the S&P 500 was down 50%. At the same time, the popular but overvalued Nifty Fifty large cap growth stocks went down substantially more. Only those alive during the 1970s with money invested in the stock market truly know how shocking and substantial such a crisis can be. It could have been devasting or glorious depending on how one was invested. Gold Launches as Tech Busts Even in less extreme monetary policy situations, gold stocks can go up while widely-held overvalued equities collapse. Late 2000 through 2002 was a perfect example. Then large cap growth and tech stocks were being decimated at the same time as gold stocks began what would ultimately become a ten-year bull market albeit with a significant selloff in late 2008. These two examples are the types of markets for both gold and broad US stocks that we envision over the next two years. Gold Stocks In The Great Depression The Great Depression is yet another example of how gold and gold stocks can perform versus stocks at large in the most serious of financial times. Homestake Mining was the largest precious metals miner of the time. Fed Policy Error Fed watchers are rightly concerned about a forthcoming policy error, but the truth is that the accumulation of global economic and market imbalances and inflationary pressures after many years of taking the path of least resistance with quantitative easing and low interest rate policy has already been the gigantic policy mistake. These misjudgments are not isolated to domestic affairs but have aided and abetted massive credit bubbles in other countries too, particularly China. We believe it is only a matter of time before investors begin stampeding out of S&P 500 index funds and FAAMG stocks and into tangible assets. We think this is the time to get ahead of the curve. As Warren Buffett’s mentor, the legendary Ben Graham, said: “In the short run, the market is a voting machine that requires only money, not intelligence or emotional stability, but in the long run it’s a weighing machine.” We think a little bit of intelligence and a lot of emotional stability could go a long way right now in selling hyper-overvalued stocks at large and buying deeply undervalued gold stocks. We strongly believe the opportunity to put money to work on the recent pullback in Crescat’s strategies is phenomenal today. Performance Download PDF Version Sincerely, Kevin C. Smith, CFA Member & Chief Investment Officer Tavi Costa Member & Portfolio Manager For more information including how to invest, please contact: Marek Iwahashi Client Service Associate miwahashi@crescat.net 303-271-9997 Cassie Fischer Client Service Associate cfischer@crescat.net (303) 350-4000 Linda Carleu Smith, CPA Member & COO lsmith@crescat.net (303) 228-7371 © 2021 Crescat Capital LLC Updated on Sep 22, 2021, 11:28 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalk12 hr. 38 min. ago

Futures Bounce On Evergrande Reprieve With Fed Looming

Futures Bounce On Evergrande Reprieve With Fed Looming Despite today's looming hawkish FOMC meeting in which Powell is widely expected to unveil that tapering is set to begin as soon as November and where the Fed's dot plot may signal one rate hike in 2022, futures climbed as investor concerns over China's Evergrande eased after the property developer negotiated a domestic bond payment deal. Commodities rallied while the dollar was steady. Contracts on the S&P 500 and Nasdaq 100 flipped from losses to gains as China’s central bank boosted liquidity when it injected a gross 120BN in yuan, the most since January... ... and investors mulled a vaguely-worded statement from the troubled developer about an interest payment.  S&P 500 E-minis were up 23.0 points, or 0.53%, at 7:30 a.m. ET. Dow E-minis were up 199 points, or 0.60%, and Nasdaq 100 E-minis were up 44.00 points, or 0.29%. Among individual stocks, Fedex fell 5.8% after the delivery company cut its profit outlook on higher costs and stalled growth in shipments. Morgan Stanley says it sees the company’s 1Q issues getting “tougher from here.” Commodity-linked oil and metal stocks led gains in premarket trade, while a slight rise in Treasury yields supported major banks. However, most sectors were nursing steep losses in recent sessions. Here are some of the biggest U.S. movers: Adobe (ADBE US) down 3.1% after 3Q update disappointed the high expectations of investors, though the broader picture still looks solid, Morgan Stanley said in a note Freeport McMoRan (FCX US), Cleveland- Cliffs (CLF US), Alcoa (AA US) and U.S. Steel (X US) up 2%-3% premarket, following the path of global peers as iron ore prices in China rallied Aethlon Medical (AEMD US) and Exela Technologies (XELAU US) advance along with other retail traders’ favorites in the U.S. premarket session. Aethlon jumps 21%; Exela up 8.3% Other so-called meme stocks also rise: ContextLogic +1%; Clover Health +0.9%; Naked Brand +0.9%; AMC +0.5% ReWalk Robotics slumps 18% in U.S. premarket trading, a day after nearly doubling in value Stitch Fix (SFIX US) rises 15.7% in light volume after the personal styling company’s 4Q profit and sales blew past analysts’ expectations Hyatt Hotels (H US) seen opening lower after the company launches a seven-million-share stock offering Summit Therapeutics (SMMT US) shares fell as much as 17% in Tuesday extended trading after it said the FDA doesn’t agree with the change to the primary endpoint that has been implemented in the ongoing Phase III Ri-CoDIFy studies when combining the studies Marin Software (MRIN US) surged more than 75% Tuesday postmarket after signing a new revenue-sharing agreement with Google to develop its enterprise technology platforms and software products The S&P 500 had fallen for 10 of the past 12 sessions since hitting a record high, as fears of an Evergrande default exacerbated seasonally weak trends and saw investors pull out of stocks trading at lofty valuations. The Nasdaq fell the least among its peers in recent sessions, as investors pivoted back into big technology names that had proven resilient through the pandemic. Focus now turns to the Fed's decision, due at 2 p.m. ET where officials are expected to signal a start to scaling down monthly bond purchases (see our preview here).  The Fed meeting comes after a period of market volatility stoked by Evergrande’s woes. China’s wider property-sector curbs are also feeding into concerns about a slowdown in the economic recovery from the pandemic. “Chair Jerome Powell could hint at the tapering approaching shortly,” said Sébastien Barbé, a strategist at Credit Agricole CIB. “However, given the current uncertainty factors (China property market, Covid, pace of global slowdown), the Fed should remain cautious when it comes to withdrawing liquidity support.” Meanwhile, confirming what Ray Dalio said that the taper will just bring more QE, Governing Council member Madis Muller said the  European Central Bank may boost its regular asset purchases once the pandemic-era emergency stimulus comes to an end. “Dovish signals could unwind some of the greenback’s gains while offering relief to stock markets,” Han Tan, chief market analyst at Exinity Group, wrote in emailed comments. A “hawkish shift would jolt markets, potentially pushing Treasury yields and the dollar past the upper bound of recent ranges, while gold and equities would sell off hunting down the next levels of support.” China avoided a major selloff as trading resumed following a holiday, after the country’s central bank boosted its injection of short-term cash into the financial system. MSCI’s Asia-Pacific index declined for a third day, dragged lower by Japan. Stocks were also higher in Europe. Basic resources - which bounced from a seven month low - and energy were among the leading gainers in the Stoxx Europe 600 index as commodity prices steadied after Beijing moved to contain fears of a spiraling debt crisis. Entain Plc rose more than 7%, extending Tuesday’s gain as it confirmed it received a takeover proposal from DraftKings Inc. Peer Flutter Entertainment Plc climbed after settling a legal dispute.  Here are some of the biggest European movers today: Entain shares jump as much as 11% after DraftKings Inc. offered to acquire the U.K. gambling company for about $22.4 billion. Vivendi rises as much as 3.1% in Paris, after Tuesday’s spinoff of Universal Music Group. Legrand climbs as much as 2.1% after Exane BNP Paribas upgrades to outperform and raises PT to a Street-high of EU135. Orpea shares falls as much as 2.9%, after delivering 1H results that Jefferies (buy) says were a “touch” below consensus. Bechtle slides as much as 5.1% after Metzler downgrades to hold from buy, saying persistent supply chain problems seem to be weighing on growth. Sopra Steria drops as much as 4.1% after Stifel initiates coverage with a sell, citing caution on company’s M&A strategy Despite the Evergrande announcement, Asian stocks headed for their longest losing streak in more than a month amid continued China-related concerns, with traders also eying policy decisions from major central banks. The MSCI Asia Pacific Index dropped as much as 0.7% in its third day of declines, with TSMC and Keyence the biggest drags. China’s CSI 300 tumbled as much as 1.9% as the local market reopened following a two-day holiday. However, the gauge came off lows after an Evergrande unit said it will make a bond interest payment and as China’s central bank boosted liquidity.  Taiwan’s equity benchmark led losses in Asia on Wednesday, dragged by TSMC after a two-day holiday, while markets in Hong Kong and South Korea were closed. Key stock gauges in Australia, Indonesia and Vietnam rose “A liquidity injection from the People’s Bank of China accompanied the Evergrande announcement, which only served to bolster sentiment further,” according to DailyFX’s Thomas Westwater and Daniel Dubrovsky. “For now, it appears that market-wide contagion risk linked to a potential Evergrande collapse is off the table.” Japanese equities fell for a second day amid global concern over China’s real-estate sector, as the Bank of Japan held its key stimulus tools in place while flagging pressures on the economy. Electronics makers were the biggest drag on the Topix, which declined 1%. Daikin and Fanuc were the largest contributors to a 0.7% loss in the Nikkei 225. The BOJ had been expected to maintain its policy levers ahead of next week’s key ruling party election. Traders are keenly awaiting the Federal Reserve’s decision due later for clues on the U.S. central banks plan for tapering stimulus. “Markets for some time have been convinced that the BOJ has reached the end of the line on normalization and will remain in a holding pattern on policy until at least April 2023 when Governor Kuroda is scheduled to leave,” UOB economist Alvin Liew wrote in a note. “Attention for the BOJ will now likely shift to dealing with the long-term climate change issues.” In the despotic lockdown regime that is Australia, the S&P/ASX 200 index rose 0.3% to close at 7,296.90, reversing an early decline in a rally led by mining and energy stocks. Banks closed lower for the fourth day in a row. Champion Iron was among the top performers after it was upgraded at Citi. IAG was among the worst performers after an earthquake caused damage to buildings in Melbourne. In New Zealand, the S&P/NZX 50 index rose 0.3% to 13,215.80 In FX, commodity currencies rallied as concerns about China Evergrande Group’s debt troubles eased as China’s central bank boosted liquidity and investors reviewed a statement from the troubled developer about an interest payment. Overnight implied volatility on the pound climbed to the highest since March ahead of Bank of England’s meeting on Thursday. The British pound weakened after Business Secretary Kwasi Kwarteng warnedthat people should prepare for longer-term high energy prices amid a natural-gas shortage that sent power costs soaring. Several U.K. power firms have stopped taking in new clients as small energy suppliers struggle to meet their previous commitments to sell supplies at lower prices. Overnight volatility in the euro rises above 10% for the first time since July ahead of the Federal Reserve’s monetary policy decision announcement. The Aussie jumped as much as 0.5% as iron-ore prices rebounded. Spot surged through option-related selling at 0.7240 before topping out near 0.7265 strikes expiring Wednesday, according to Asia- based FX traders.  Elsewhere, the yen weakened and commodity-linked currencies such as the Australian dollar pushed higher. In rates, the dollar weakened against most of its Group-of-10 peers. Treasury futures were under modest pressure in early U.S. trading, leaving yields cheaper by ~1.5bp from belly to long-end of the curve. The 10-year yield was at ~1.336% steepening the 2s10s curve by ~1bp as the front-end was little changed. Improved risk appetite weighed; with stock futures have recovering much of Tuesday’s losses as Evergrande concerns subside. Focal point for Wednesday’s session is FOMC rate decision at 2pm ET.   FOMC is expected to suggest it will start scaling back asset purchases later this year, while its quarterly summary of economic projections reveals policy makers’ expectations for the fed funds target in coming years in the dot-plot update; eurodollar positions have emerged recently that anticipate a hawkish shift Bitcoin dropped briefly below $40,000 for the first time since August amid rising criticism from regulators, before rallying as the mood in global markets improved. In commodities, Iron ore halted its collapse and metals steadied. Oil advanced for a second day. Bitcoin slid below $40,000 for the first time since early August before rebounding back above $42,000.   To the day ahead now, and the main highlight will be the aforementioned Federal Reserve decision and Chair Powell’s subsequent press conference. Otherwise on the data side, we’ll get US existing home sales for August, and the European Commission’s advance consumer confidence reading for the Euro Area in September. Market Snapshot S&P 500 futures up 0.4% to 4,362.25 STOXX Europe 600 up 0.5% to 461.19 MXAP down 0.7% to 199.29 MXAPJ down 0.4% to 638.39 Nikkei down 0.7% to 29,639.40 Topix down 1.0% to 2,043.55 Hang Seng Index up 0.5% to 24,221.54 Shanghai Composite up 0.4% to 3,628.49 Sensex little changed at 59,046.84 Australia S&P/ASX 200 up 0.3% to 7,296.94 Kospi up 0.3% to 3,140.51 Brent Futures up 1.5% to $75.47/bbl Gold spot up 0.0% to $1,775.15 U.S. Dollar Index little changed at 93.26 German 10Y yield rose 0.6 bps to -0.319% Euro little changed at $1.1725 Top Overnight News from Bloomberg What would it take to knock the U.S. recovery off course and send Federal Reserve policy makers back to the drawing board? Not much — and there are plenty of candidates to deliver the blow The European Central Bank will discuss boosting its regular asset purchases once the pandemic-era emergency stimulus comes to an end, but any such increase is uncertain, Governing Council member Madis Muller said Investors seeking hints about how Beijing plans to deal with China Evergrande Group’s debt crisis are training their cross hairs on the central bank’s liquidity management A quick look at global markets courtesy of Newsquawk Asian equity markets traded mixed as caution lingered ahead of upcoming risk events including the FOMC, with participants also digesting the latest Evergrande developments and China’s return to the market from the Mid-Autumn Festival. ASX 200 (+0.3%) was positive with the index led higher by the energy sector after a rebound in oil prices and as tech also outperformed, but with gains capped by weakness in the largest-weighted financials sector including Westpac which was forced to scrap the sale of its Pacific businesses after failing to secure regulatory approval. Nikkei 225 (-0.7%) was subdued amid the lack of fireworks from the BoJ announcement to keep policy settings unchanged and ahead of the upcoming holiday closure with the index only briefly supported by favourable currency outflows. Shanghai Comp. (+0.4%) was initially pressured on return from the long-weekend and with Hong Kong markets closed, but pared losses with risk appetite supported by news that Evergrande’s main unit Hengda Real Estate will make coupon payments due tomorrow, although other sources noted this is referring to the onshore bond payments valued around USD 36mln and that there was no mention of the offshore bond payments valued at USD 83.5mln which are also due tomorrow. Meanwhile, the PBoC facilitated liquidity through a CNY 120bln injection and provided no surprises in keeping its 1-year and 5-year Loan Prime Rates unchanged for the 17th consecutive month at 3.85% and 4.65%, respectively. Finally, 10yr JGBs were flat amid the absence of any major surprises from the BoJ policy announcement and following the choppy trade in T-notes which were briefly pressured in a knee-jerk reaction to the news that Evergrande’s unit will satisfy its coupon obligations tomorrow, but then faded most of the losses as cautiousness prevailed. Top Asian News Gold Steady as Traders Await Outcome of Fed Policy Meeting Evergrande Filing on Yuan Bond Interest Leaves Analysts Guessing Singapore Category E COE Price Rises to Highest Since April 2014 Asian Stocks Fall for Third Day as Focus Turns to Central Banks European equities (Stoxx 600 +0.5%) trade on a firmer footing in the wake of an encouraging APAC handover. Focus overnight was on the return of Chinese participants from the Mid-Autumn Festival and news that Evergrande’s main unit, Hengda Real Estate will make coupon payments due tomorrow; however, we await indication as to whether they will meet Thursday’s offshore payment deadline as well. Furthermore, the PBoC facilitated liquidity through a CNY 120bln injection whilst keeping its 1-year and 5-year Loan Prime Rates unchanged (as expected). Note, despite gaining yesterday and today, thus far, the Stoxx 600 is still lower to the tune of 0.7% on the week. Stateside, futures are also trading on a firmer footing ahead of today’s FOMC policy announcement, at which, market participants will be eyeing any clues for when the taper will begin and digesting the latest dot plot forecasts. Furthermore, the US House voted to pass the bill to fund the government through to December 3rd and suspend the debt limit to end-2022, although this will likely be blocked by Senate Republicans. Back to Europe, sectors are mostly firmer with outperformance in Basic Resources and Oil & Gas amid upside in the metals and energy complex. Elsewhere, Travel & Leisure is faring well amid further upside in Entain (+6.1%) with the Co. noting it rejected an earlier approach from DraftKings at GBP 25/shr with the new offer standing at GBP 28/shr. Additionally for the sector, Flutter Entertainment (+4.1%) are trading higher after settling the legal dispute between the Co. and Commonwealth of Kentucky. Elsewhere, in terms of deal flow, Iliad announced that it is to acquire UPC Poland for around USD 1.8bln. Top European News Energy Cost Spike Gets on EU Ministers’ Green Deal Agenda Travel Startup HomeToGo Gains in Frankfurt Debut After SPAC Deal London Stock Exchange to Shut Down CurveGlobal Exchange EU Banks Expected to Add Capital for Climate Risk, EBA Says In FX, trade remains volatile as this week’s deluge of global Central Bank policy meetings continues to unfold amidst fluctuations in broad risk sentiment from relatively pronounced aversion at various stages to a measured and cautious pick-up in appetite more recently. Hence, the tide is currently turning in favour of activity, cyclical and commodity currencies, albeit tentatively in the run up to the Fed, with the Kiwi and Aussie trying to regroup on the 0.7000 handle and 0.7350 axis against their US counterpart, and the latter also striving to shrug off negative domestic impulses like a further decline below zero in Westpac’s leading index and an earthquake near Melbourne. Next up for Nzd/Usd and Aud/Usd, beyond the FOMC, trade data and preliminary PMIs respectively. DXY/CHF/EUR/CAD - Notwithstanding the overall improvement in market tone noted above, or another major change in mood and direction, the Dollar index appears to have found a base just ahead of 93.000 and ceiling a similar distance away from 93.500, as it meanders inside those extremes awaiting US existing home sales that are scheduled for release before the main Fed events (policy statement, SEP and post-meeting press conference from chair Powell). Indeed, the Franc, Euro and Loonie have all recoiled into tighter bands vs the Greenback, between 0.9250-26, 1.1739-17 and 1.2831-1.2770, but with the former still retaining an underlying bid more evident in the Eur/Chf cross that is consolidating under 1.0850 and will undoubtedly be acknowledged by the SNB tomorrow. Meanwhile, Eur/Usd has hardly reacted to latest ECB commentary from Muller underpinning that the APP is likely to be boosted once the PEPP envelope is closed, though Usd/Cad is eyeing a firm rebound in oil prices in conjunction with hefty option expiry interest at the 1.2750 strike (1.8 bn) that may prevent the headline pair from revisiting w-t-d lows not far beneath the half round number. GBP/JPY - The major laggards, as Sterling slips slightly further beneath 1.3650 against the Buck to a fresh weekly low and Eur/Gbp rebounds from circa 0.8574 to top 0.8600 on FOMC day and T-1 to super BoE Thursday. Elsewhere, the Yen has lost momentum after peaking around 109.12 and still not garnering sufficient impetus to test 109.00 via an unchanged BoJ in terms of all policy settings and guidance, as Governor Kuroda trotted out the no hesitation to loosen the reins if required line for the umpteenth time. However, Usd/Jpy is holding around 109.61 and some distance from 1.1 bn option expiries rolling off between 109.85-110.00 at the NY cut. SCANDI/EM - Brent’s revival to Usd 75.50+/brl from sub-Usd 73.50 only yesterday has given the Nok another fillip pending confirmation of a Norges Bank hike tomorrow, while the Zar has regained some poise with the aid of firmer than forecast SA headline and core CPI alongside a degree of retracement following Wednesday’s breakdown of talks on a pay deal for engineering workers that prompted the union to call a strike from early October. Similarly, the Cnh and Cny by default have regrouped amidst reports that the CCP is finalising details to restructure Evergrande into 3 separate entities under a plan that will see the Chinese Government take control. In commodities, WTI and Brent are firmer this morning though once again fresh newsflow for the complex has been relatively slim and largely consisting of gas-related commentary; as such, the benchmarks are taking their cue from the broader risk tone (see equity section). The improvement in sentiment today has brought WTI and Brent back in proximity to being unchanged on the week so far as a whole; however, the complex will be dictated directly by the EIA weekly inventory first and then indirectly, but perhaps more pertinently, by today’s FOMC. On the weekly inventories, last nights private release was a larger than expected draw for the headline and distillate components, though the Cushing draw was beneath expectations; for today, consensus is a headline draw pf 2.44mln. Moving to metals where the return of China has seen a resurgence for base metals with LME copper posting upside of nearly 3.0%, for instance. Albeit there is no fresh newsflow for the complex as such, so it remains to be seen how lasting this resurgence will be. Finally, spot gold and silver are firmer but with the magnitude once again favouring silver over the yellow metal. US Event Calendar 10am: Aug. Existing Home Sales MoM, est. -1.7%, prior 2.0% 2pm: Sept. FOMC Rate Decision (Lower Boun, est. 0%, prior 0% DB's Jim Reid concludes the overnight wrap All eyes firmly on China this morning as it reopens following a 2-day holiday. As expected the indices there have opened lower but the scale of the declines are being softened by the PBoC increasing its short term cash injections into the economy. They’ve added a net CNY 90bn into the system. On Evergrande, we’ve also seen some positive headlines as the property developers’ main unit Hengda Real Estate Group has said that it will make coupon payment for an onshore bond tomorrow. However, the exchange filing said that the interest payment “has been resolved via negotiations with bondholders off the clearing house”. This is all a bit vague and doesn’t mention the dollar bond at this stage. Meanwhile, Bloomberg has reported that Chinese authorities have begun to lay the groundwork for a potential restructuring that could be one of the country’s biggest, assembling accounting and legal experts to examine the finances of the group. All this follows news from Bloomberg yesterday that Evergrande missed interest payments that had been due on Monday to at least two banks. In terms of markets the CSI (-1.11%), Shanghai Comp (-0.29%) and Shenzhen Comp (-0.53%) are all lower but have pared back deeper losses from the open. We did a flash poll in the CoTD yesterday (link here) and after over 700 responses in a couple of hours we found only 8% who we thought Evergrande would still be impacting financial markets significantly in a month’s time. 24% thought it would be slightly impacting. The other 68% thought limited or no impact. So the world is relatively relaxed about contagion risk for now. The bigger risk might be the knock on impact of weaker Chinese growth. So that’s one to watch even if you’re sanguine on the systemic threat. Craig Nicol in my credit team did a good note yesterday (link here) looking at the contagion risk to the broader HY market. I thought he summed it up nicely as to why we all need to care one way or another in saying that “Evergrande is the largest corporate, in the largest sector, of the second largest economy in the world”. For context AT&T is the largest corporate borrower in the US market and VW the largest in Europe. Turning back to other Asian markets now and the Nikkei (-0.65%) is down but the Hang Seng (+0.51%) and Asx (+0.58%) are up. South Korean markets continue to remain closed for a holiday. Elsewhere, yields on 10y USTs are trading flattish while futures on the S&P 500 are up +0.10% and those on the Stoxx 50 are up +0.21%. Crude oil prices are also up c.+1% this morning. In other news, the Bank of Japan policy announcement overnight was a non-event as the central bank maintained its yield curve target while keeping the policy rate and asset purchases plan unchanged. The central bank also unveiled more details of its green lending program and said that it would immediately start accepting applications and would begin making the loans in December. The relatively calm Asian session follows a stabilisation in markets yesterday following their rout on Monday as investors looked forward to the outcome of the Fed’s meeting later today. That said, it was hardly a resounding performance, with the S&P 500 unable to hold on to its intraday gains and ending just worse than unchanged after the -1.70% decline the previous day as investors remained vigilant as to the array of risks that continue to pile up on the horizon. One of these is in US politics and legislators seem no closer to resolving the various issues surrounding a potential government shutdown at the end of the month, along with a potential debt ceiling crisis in October, which is another flashing alert on the dashboard for investors that’s further contributing to weaker sentiment right now. Looking ahead now, today’s main highlight will be the latest Federal Reserve decision along with Chair Powell’s subsequent press conference, with the policy decision out at 19:00 London time. Markets have been on edge for any clues about when the Fed might begin to taper asset purchases, but concern about tapering actually being announced at this meeting has dissipated over recent weeks, particularly after the most recent nonfarm payrolls in August came in at just +235k, and the monthly CPI print also came in beneath consensus expectations for the first time since November. In terms of what to expect, our US economists write in their preview (link here) that they see the statement adopting Chair Powell’s language that a reduction in the pace of asset purchases is appropriate “this year”, so long as the economy remains on track. They see Powell maintaining optionality about the exact timing of that announcement, but they think that the message will effectively be that the bar to pushing the announcement beyond November is relatively high in the absence of any material downside surprises. This meeting also sees the release of the FOMC’s latest economic projections and the dot plot, where they expect there’ll be an upward drift in the dots that raises the number of rate hikes in 2023 to 3, followed by another 3 increases in 2024. Back to yesterday, and as mentioned US equity markets fell for a second straight day after being unable to hold on to earlier gains, with the S&P 500 slightly lower (-0.08%). High-growth industries outperformed with biotech (+0.38%) and semiconductors (+0.18%) leading the NASDAQ (+0.22%) slightly higher, however the Dow Jones (-0.15%) also struggled. Europe saw a much stronger performance though as much of the US decline came after Europe had closed. The STOXX 600 gained +1.00% to erase most of Monday’s losses, with almost every sector in the index ending the day in positive territory. With risk sentiment improving for much of the day yesterday, US Treasuries sold off slightly and by the close of trade yields on 10yr Treasuries were up +1.2bps to 1.3226%, thanks to a +1.8bps increase in real yields. However, sovereign bonds in Europe told a different story as yields on 10yr bunds (-0.3bps), OATs (-0.3bps) and BTPs (-1.9bps) moved lower. Other safe havens including gold (+0.59%) and silver (+1.02%) also benefited, but this wasn’t reflected across commodities more broadly, with Bloomberg’s Commodity Spot Index (-0.30%) losing ground for a 4th consecutive session. Democratic Party leaders plan to vote on the Senate-approved $500bn bipartisan infrastructure bill next Monday, even with no resolution to the $3.5tr budget reconciliation measure that encompasses the remainder of the Biden Administration’s economic agenda. Democrats continue to work on the reconciliation measure but have turned their attention to the debt ceiling and government funding bills.Congress has fewer than two weeks before the current budget expires – on Oct 1 – to fund the government and raise the debt ceiling. Republicans yesterday noted that the Democrats could raise the ceiling on their own through the reconciliation process, with many saying that they would not be offering their support to any funding bill. Democrats continue to push for a bipartisan bill to raise the debt ceiling, pointing to their votes during the Trump administration. If Democrats are forced to tie the debt ceiling and funding bills to budget reconciliation, it could limit how much of the $3.5 trillion bill survives the last minute negotiations between progressives and moderates. More to come over the next 10 days. Staying on the US, there was an important announcement in President Biden’s speech at the UN General Assembly, as he said that he would work with Congress to double US funding to poorer nations to deal with climate change. That comes as UK Prime Minister Johnson (with the UK hosting the COP26 summit in less than 6 weeks’ time) has been lobbying other world leaders to find the $100bn per year that developed economies pledged by 2020 to support developing countries as they reduce their emissions and deal with climate change. In Germany, there are just 4 days to go now until the federal election, and a Forsa poll out yesterday showed a slight narrowing in the race, with the centre-left SPD remaining on 25%, but the CDU/CSU gained a point on last week to 22%, which puts them within the +/- 2.5 point margin of error. That narrowing has been seen in Politico’s Poll of Polls as well, with the race having tightened from a 5-point SPD lead over the CDU/CSU last week to a 3-point one now. Turning to the pandemic, Johnson & Johnson reported that their booster shot given 8 weeks after the first offered 100% protection against severe disease, 94% protection against symptomatic Covid in the US, and 75% against symptomatic Covid globally. Speaking of boosters, Bloomberg reported that the FDA was expected to decide as soon as today on a recommendation for Pfizer’s booster vaccine. That follows an FDA advisory panel rejecting a booster for all adults last Friday, restricting the recommendation to those over-65 and other high-risk categories. Staying with the US and vaccines, President Biden announced that the US was ordering 500mn doses of the Pfizer vaccine to be exported to the rest of the world. On the data front, there were some strong US housing releases for August, with housing starts up by an annualised 1.615m (vs. 1.55m expected), and building permits up by 1.728m (vs. 1.6m expected). Separately, the OECD released their Interim Economic Outlook, which saw them upgrade their inflation expectations for the G20 this year to +3.7% (up +0.2ppts from May) and for 2022 to +3.9% (up +0.5ppts from May). Their global growth forecast saw little change at +5.7% in 2021 (down a tenth) and +4.5% for 2022 (up a tenth). To the day ahead now, and the main highlight will be the aforementioned Federal Reserve decision and Chair Powell’s subsequent press conference. Otherwise on the data side, we’ll get US existing home sales for August, and the European Commission’s advance consumer confidence reading for the Euro Area in September. Tyler Durden Wed, 09/22/2021 - 08:05.....»»

Category: blogSource: zerohedgeSep 22nd, 2021

Century 21 Collaborates With National Geographic for Documentary, Launches Study

As part of its 50th anniversary celebration, the CENTURY 21® Brand explores the concept of home in a unique collaboration with National Geographic CreativeWorks, culminating in the production of its first-ever branded documentary. Titled “Home Rediscovered,” the documentary premieres on the National Geographic Network on Sept. 23, 2021, at 10 p.m. EST. To support the film, the CENTURY 21® Brand […] The post Century 21 Collaborates With National Geographic for Documentary, Launches Study appeared first on RISMedia. As part of its 50th anniversary celebration, the CENTURY 21® Brand explores the concept of home in a unique collaboration with National Geographic CreativeWorks, culminating in the production of its first-ever branded documentary. Titled “Home Rediscovered,” the documentary premieres on the National Geographic Network on Sept. 23, 2021, at 10 p.m. EST. To support the film, the CENTURY 21® Brand commissioned a global research study with magnetic collective, an insights-driven brand consultancy, to explore how the past year transformed the modern home and what these changes might mean for the future of homeownership and the real estate industry. The study was conducted using both quantitative analysis and qualitative interviews with real estate agents, builders, recent buyers and future buyers across five key global markets including the United States, France, Australia, Spain and Japan. The survey was based on the responses of 1,500 people (300 in each market), from the ages of 25 to 64 from April to May 2021. The “Rediscovering Home” documentary weaves in findings from the study as well as examines several housing trends that emerged during the pandemic which are expected to shape our vision of home for the foreseeable future. Key takeaways: There has not been one universal pandemic experience as countries have followed their own COVID timelines with varying peaks and restrictions, creating a home-buying process that varies geographically. The U.S., Spain, and France were all once epicenters and went through some of the longest lockdown and restriction periods Fifty-eight percent of buyers in France say that COVID will have a lasting impact on what they want in their homes; 43% of buyers in Spain say COVID has been most influential when it comes to their desire to buy a new home COVID’s influence on aspects of the home-buying process in the U.S. is most evident for those with kids and those working from home Australia and Japan initially saw more of a slowdown instead of a lockdown, but COVID’s more recent emergence in Japan leaves 48% of future buyers saying it has been a factor in their desire to buy a new home Twenty-two percent of those surveyed globally say they moved because someone from the family moved in leading to a universal need for flexibility and reimagining of spaces In Australia, children are now more likely to stay at home during college years, until they find a job with a steady income  In Spain and Japan, children are staying at home until age 30 or marriage  The pandemic forced people to stay close to home, but even when looking to move, they aren’t going far. Across all markets, most of the people surveyed reported moving within 20 miles or kilometers of their current home; longer distance moves (50-plus miles or kilometers) are more common in the U.S. and France than in other markets Twenty percent of U.S. and France buyers moved 50-plus miles or kilometers away, compared to Spain and Japan buyers less than 15% moved that far Low inventory and increasing prices continue to be the hot topics in the U.S. and across markets. Low home inventory in the top five challenges people are facing in all markets surveyed; all markets experienced challenges finding homes to fit their needs.  In the U.S., according to the National Association of REALTORS®, the public inventory numbers from May to June increased 3.3% and the internal inventory numbers are also similarly trending up leading to some early optimism that we are seeing green shoots of increased supply France has seen a ‘banlieu’ (suburbs) boom with suburb property prices soaring, a trend only more accentuated as a result of the pandemic  While Australia has fared better than other well-developed countries due to snap lockdowns, internal border controls and tough social distancing measures, residential property values have been on a steady increase for the past year Urban flight is happening around the world, but there are indications that it may not be a lasting trend. Future buyers in all countries surveyed are more likely to stay in urban areas by a large margin (compared to recent buyers) In the U.S., 82% of future buyers will stay in urban areas. In Japan, that number is 80%; 59% in France, 73% in Spain and 62% in Australia “It’s no secret that the last 18 months have been a wild ride for the real estate industry,” said Michael Miedler, president and CEO, Century 21 Real Estate LLC, in a statement. “What was once a seasonal business that had expected outcomes from month to month was completely upended by work from home, schooling at home and postponed life events. We were thrilled to work alongside magnetic collective and National Geographic CreativeWorks to take a deep dive into how these lifestyle changes were going to impact the consumers’ view of home and subsequently the future of our industry.” “Regardless of what challenges and changes lie ahead, we were excited to see that buyers surveyed in all markets see the benefits of having an active and engaged real estate professional, like our C21® affiliated agents, taking on multiple roles and being a partner throughout the journey,” added Miedler. “All of these learnings will help to ensure that we are continuing to deliver the most extraordinary experiences possible for all of our clients around the globe.” “Home Rediscovered” is a 45-minute film hosted by National Geographic Explorers Andrés Ruzo and Dr. Rae Wynn-Grant. They met with a diverse group of families and individuals who have uprooted their lives, bought homes, moved or simply re-thought the way they want to live—now and in the future as they explored what the future of home will look like around the world. For more information, please visit www.century21.com. The post Century 21 Collaborates With National Geographic for Documentary, Launches Study appeared first on RISMedia......»»

Category: realestateSource: rismediaSep 21st, 2021

Tech Driven NASDAQ Soars Again

Tech Driven NASDAQ Soars Again Zacks Ultimate, This is Brian Bolan filing in for the Ultimate Editor Jim Giaquinto.  Jim has some incredible foresight … not into the markets per say, but just for taking the day off when the market moves in a big way.  I think I will have to start informing my readers ahead of time when Jim is taking off… the move would be to put on a straddle options trade as we don’t know which way it will go, but it will go one way in a big way! The way the market went today was up.  Up, up and away for the NASDAQ as that index posted a gain 2.5% on the day.  The Dow fought back from being in the red most of the day and closed with a small gain of about 9 points thanks to a flurry of selling near the close.  The S&P 500  was up 0.84% and saw some selling at the close, but nothing like what was seen in the Dow Jones. I wanted to make an addition in Tech Innovators today, but I was waiting for a pull back that never came. A former boss used to say if you are waiting for a pull back you are timing the market… or at least trying to and that is just what I feel like today.  I tried to time an entry when I just should have pulled the trigger.  The NASDAQ was up almost 100 points and wanted it to be up only 85 points.  Then is was up 130 points and I begged for a 30 retreat to allow me to enter.  Then it was up 165 points and I figured the ship had sailed and it might even be a good short entry.  Then we got to +200 and later +250. There is a significant tailwind for tech stocks.  The combination of unprecedented stimulus and a favorable market environment has made valuations start to inflate.  Not balloon, just inflate.  Staples are not the fad, nor are financials.  Its tech, tech and more tech. Broader Market There was plenty of talk on Twitter over the weekend about vaccine announcements.  From what I saw, you would have thought that we would get 3 or ever 4 announcements so I dragged my feet a little on my morning dog walk so I could be in front of the computer for the news.  There really wasn’t anything to write home about, so Buckeye and I had a little warmer than expected walk. That said, there have been surges in several states… but we continue to find out that there are lots of bad numbers in the system.  An Ohio man was tested 15 times, while in the hospital with COVID, and you guessed it, each time he still had it… but each time was counted as a new instance of COVID.  This could be a one off problem, but there are also tons of issues in FL as well.  The numbers we should be watching are the ICU bed rates --- how many beds are available.  The deaths are falling as some new treatments are being tested, and that is great news… but it is even better when people stop getting sick from COIVD at all. I saw on TV that the S&P was positive for the year… and that has to really burn the shorts.  A year that saw an economic shutdown and a market crash has stocks basically flat on the year.  That is amazing.  But what is the lesson?  You cannot fight the Fed… they are pouring money into the system and some of it is landing in the lap of fund managers and they are not keeping it as cash.  That is why I want to be fully invested. Advancers beat out decliners today, but only by a small measure as the tech names really skewed todays action.  Take them out of the equation and the market finishes lower.  New highs blistered to 400+ which is almost what I would consider a frothy number… but recall all the pessimism out there and how the market loves to humble the naysayers.  Portfolio Moves Jeremy Mullin is not only the head of Counter Strike but he also heads up Commodity Innovators as well. Today I see he sold VanEck Gold Miners (GDX) for a 32% gain.  He also moved to add Cleveland Cliffs (CLF) to the portfolio today. Mr. Mullin is bullish on iron ore and steel prices as he looks to a resurgence in global demand to keep those prices rising.  His gold play was a longer term hold, but he still has some other exposure to the space should the miners continue to roll higher. BlackBox Trader made a slew of moves today as it normally does on Monday. This service sold five previous positions: DR Horton Inc (DHI), Sally Beauty Holdings (SBH), PulteGroup (PHM), Deutsche Bank (DB) and Cheniere Energy (LNG). The algo selected 5 new names that were added today: Hansebrands Inc (HBI), Caesars Entertainment (CZR), Office Depot (ODP), Berry Global Corp (BERY) and Robert Half Intl (RHI). This wouldn’t be a complete write up without a little self promotion.  My mother used to say “self praise stinks” – actually, she still says this and hates when I toot my own horn.  I am more in the camp of “self praise pays” because who else in this world thinks I am as great as I think I am?  I say that with my tongue firmly implanted in my cheek. That said, Tech Innovators is crushing is, with TSLA leading the way up 291% since mid March.  I have no plans to sell this stock and I see it speeding north of $2000 in the near future.  TWOU is up 125% over the same time period and those two names sit atop my Innovators Series service.  Home Run Investor has two names posting gains of 100% or more.  The health of that portfolio is super strong with 13 of the 14 names in the green and lone red number is only -2.8%. Stocks Under $10 is my other service that has its own pair of 100%+ winners.  Expect some action in that service tomorrow as there are only 13 names out of a maximum of 15 for that service. Jim will return tomorrow with a more balanced view across all the portfolios… so be sure to sign up for the three that I manage to hear more from me. See you soon, Brian Recommendations from Zacks' Private Portfolios: Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>  Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021

NASDAQ Makes It Look Easy, Gains 1% to New Closing High

NASDAQ Makes It Look Easy, Gains 1% to New Closing High The NASDAQ showed the S&P how it’s done on Monday by soaring 1% and closing at a record high. Meanwhile, its counterpart continues to dilly-dally just under its own milestone. In the end though, they both started the week with solid gains amid another slow summer session with low trading volume. The NASDAQ jumped about 110 points to a new high of 11,129.73. The index is coming off a basically flat weekly performance, though it technically rose by .08%. Tesla (TSLA) was a major mover on Monday as the electric car pioneer soared 11.2%. The S&P picked up right where it left off before the weekend. It momentary crossed over its closing high of 3386.15 from February 19, but once again failed to stay above the mark when the bell rang. It finished higher by 0.27% to 3381.99, or just a little more than 4 points away. The index was up about 0.6% last week. The Dow easily outperformed its counterparts in the previous week by jumping 1.8%. So no one should be surprised that it took a little break today by sliding 0.31% (or around 86 points) to 27,844.91. Earnings season is winding down, which means its time to hear from the retailers. Wal-Mart (WMT) and Home Depot (HD) will be the big reports tomorrow, while Target (TGT) and Lowe’s (LOW) follow on Wednesday. These are just a few of the retailers going to the plate in the next few days. We’ll be getting another good read on the consumer from these reports. Last Friday’s retail sales report was mixed with an advance of 1.2% missing expectations. However, the increase came to 1.9% sans auto, which easily eclipsed forecasts. We’ll also be getting reports from a couple of the final tech giants this season, as NVIDIA (NVDA) is scheduled for Wednesday and Alibaba (BABA) is set for Thursday. Today's Portfolio Highlights:  Counterstrike: The market is shrugging off all its challenges these days and continuing to move forward, which has given Jeremy a chance to play the short side for the first time in months. On Monday, the editor short sold online recruitment services provider Upwork (UPWK) and online pet retailer Chewy (CHWY) with 4% allocations each. Both stocks are Zacks Rank #4s (Sells) that appear to be overbought after jumping off their coronavirus lows, and they could have trouble sustaining the momentum. Meanwhile, the portfolio also bought more of Zacks Rank #2 (Buy) Turtle Beach (HEAR), which pulled back despite beating earnings estimates by 44%. Jeremy added 8% to HEAR, bringing the total allocation to 10%. Learn a lot more about today’s moves in the complete commentary, including a look at the charts.  Surprise Trader: Rising equity indices and low bond yields present a great environment for investment management companies, so that’s where Dave went for his first buy of the week. The editor picked up Eaton Vance (EV), which should be reporting around the final week of August. The company hasn’t missed since February 2019 and looks set for another beat given its Earnings ESP of 5.69%. It topped by more than 12% last time. The portfolio added EV on Monday with a 12% allocation. In other news, Revolve Group (RVLV) has given back some of the gains since moving higher after its quarterly report, so Dave decided to sell the position for a more than 14% return in less than a week. Read the full write-up for more on today’s moves. Healthcare Innovators: Analysts are finally noticing the growth story of Quidel (QDEL), a medical diagnostic innovator with multiple Covid tests that have been fast-tracked by the FDA. Late last month, the company reported strong second-quarter results, which included a positive earnings surprise of 66%. Earnings estimates and the share price continued to move higher after the announcement. And analysts are finally taking it seriously. Kevin has been watching QDEL for a while now and moved in on Monday with plans to add more on any dips. Read the full write-up for specifics on this new addition, including a look at what those analysts are saying about the company. By the way, this portfolio had the best performer of the day among all ZU names as Natera (NTRA) jumped 11.9%. Commodity Innovators: It doesn’t look like natural gas is going to pullback anytime soon, so Jeremy decided to gain exposure today with a trio of moves because there’s still “a lot more meat on the bone going forward.” The editor picked up United States Natural Gas ETF (UNG), which could move 50% from current levels due to an improving supply/demand structure and the coming winter. The portfolio also looks to take advantage of rising natural gas prices by adding Cheniere Energy (LNG) and The Williams Companies (WMB). Meanwhile, Jeremy also sold Energy Select Sector SPDR ETF (XLE) and Teucrium Sugar ETF (CANE) for gains of 10.1% and 11.4%, respectively. Read the full write-up for a lot more on today’s moves. All the Best, Jim Giaquinto Recommendations from Zacks' Private Portfolios: Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>  Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021

S&P, NASDAQ Reach New Closing Highs to End a Positive Week

S&P, NASDAQ Reach New Closing Highs to End a Positive Week This slow, summer week sure did see A LOT of big stories! We saw Apple (AAPL) become the first publicly-traded company to reach $2 Trillion and Tesla (TSLA) soar right past $2000 a share. There was an outstanding quarterly report from Target (TGT) amid a mostly solid slate of earnings results. We even received both positive and negative economic data, including a warning from the Fed. But the biggest story of all is that two of the major indices have completely recouped their coronavirus losses and head into the weekend in record territory. The NASDAQ gained approximately 2.7% this week and reached a new high in four of the five sessions. That included today, as the index advanced 0.42% (or nearly 47 points) to make more history at 11,311.80. Technology has resumed its leadership position. Apple really stood out by advancing another 5%+ today and securing its spot all by itself above $2 Trillion. But the NASDAQ is no longer alone, as the S&P also reached new heights. It rose 0.34% to 3397.16 for its second record close of the week. It advanced 0.7% in the five days. The Dow actually had the best performance on Friday, and almost rose enough for a weekly advance despite starting off with a three-day losing streak. But it didn’t quite make it. The index advanced 0.69% (or around 190 points) to 27,930.33. So it was down for the week by less than 1 point! If you were wondering, the Dow still has about 6% to make up before reaching its own closing high. The market enjoyed a nearly 25% jump in existing home sales on Friday, along with some good manufacturing and services data from IHS Markit. These reports provided a nice balance after a couple challenging days, which included very cautious (some would say ‘gloomy’) statements from the Fed and a disheartening jobless claims report that saw the number shoot above 1 million once again. But through it all, the market continues to move higher and heads into the final full week of August with a pretty good chance of making it five straight months of gains. Today's Portfolio Highlights: Insider Trader: It’s rare for insiders to buy shares when their company is at multi-year highs, but that’s exactly what’s happening at CarParts.com (PRTS). In fact, this online car parts retailer is up 550% year to date! The company reported a solid quarter recently with sales soaring 61%, while also conducting a secondary offering at $13 that raised $63.7 million for general corporate purposes. And now, two insiders picked up shares earlier this week, including the General Counsel and a director. Apparently, they think shares of PRTS are moving even higher! Tracey wants to get in too, but this is a fully-invested portfolio. She needs to make some room first. The editor sold the rest of Cincinnati Financial (CINF) for a more than 30% return, which allowed her to add PRTS with a 6% allocation. Read the full write-up for more specifics on these moves. TAZR Trader: Analysts are scrambling to raise their estimates and price targets on Keysight Technologies (KEYS) after this provider of electronic design and test instrumentation systems reported a strong beat and raise quarter. The company surprised by 42% on the bottom line and 10% on the top. Kevin saw an opportunity this morning as shares pulled back to close the Aug 13 gap and kiss the 50-day near $100, with most analysts boosting their PTs above $120. The editor added more to KEYS on Friday. He bought the original position earlier this month. Read the full write-up for more details on this move.  Blockchain Innovators: Shares of Rambus (RMBS) recently came off their highs, so Dave decided it was a good time to cash out. He sold the stock on Friday for a nearly 31% return since being added in February 2019. The new buy was Axcelis Tech (ACLS), a leading producer of ion implantation equipment used in the fabrication of semiconductors. “If chip makers like AMD and NVIDIA provide the picks and axes for the blockchain industry, then companies like Axcelis build the molds for the picks and axes,” said Dave. Rising earnings estimates have made ACLS a Zacks Rank #2 (Buy), while earnings are expected to grow 134% this year with revenue growth of nearly 35%. See the full write-up for more on today’s action. In other news, this portfolio had a couple top performers today as NVIDIA (NVDA) rose 4.47% and PFSweb (PFSW) advanced 4.46%. Value Investor: The housing and refi market is “red-hot” right now and should stay that way for a while. Tracey wanted more exposure to the space, so she added Flagstar Bancorp (FBC) on Friday. The company does community banking in Michigan, but the editor is most interested in its national mortgage servicing side business. Earnings are soaring thanks to the hot mortgage market, which convinced analysts to raise their estimates. As a result, FBC is a Zacks Rank #1 (Strong Buy). Shares are “dirt cheap” and still down 22.3% year-to-date. Tracey was also impressed to see insiders buying the name. Make sure to read the complete commentary for a lot more on this new addition. Have a Great Weekend! Jim Giaquinto Recommendations from Zacks' Private Portfolios: Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>  Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021

New Month Kicks Off With New Records

New Month Kicks Off With New Records It’ll be tough for September to repeat the impressive successes of August… but it sure did get off to a good start on Tuesday. It might be a new month, but it’s an old story about tech leading the market higher. The NASDAQ soared 1.39% today (or about 164 points) to a new record of 11,939.67. All of the FAANGs were higher, including another 4% advance for Apple (AAPL) a day after its 4-for-1 stock split. The iPhone maker is now up more than 7% so far this week, which is only two days old. The best performer in the group, though, was Netflix (NFLX, +5.1%), while Amazon (AMZN) and Alphabet (GOOG) each advanced by more than 1%. But the big star on Tuesday was Zoom Video Communications (ZM), which soared nearly 41% after an exceptional fiscal second-quarter report that included revenue jumping more than four times last year and a raised outlook for the fiscal third quarter.    ZM provides a video-first communications platform, so its strong quarterly results provided a lot of fuel to the work-from-home names. In other market news, the S&P is back on a record pace after rising 0.75% to a new high of 3526.65. And the Dow rose 0.76% (or about 215 points) to 28,645.66. Manufacturing activity continued to rise in August, as the ISM’s index reached 56. The result beat the previous month’s 54.2 and expectations for around 55. (Remember, anything over 50 means growth.) The market just completed its fifth straight month of gains. The NASDAQ jumped by 9.6% in August, while the Dow was up 7.6% and the S&P improved 7%. It was the best August performance in decades. Now we’ve begun September, which is historically the worst month of the year for stocks. And this super-hot market already has many investors expecting a sharp pullback after a record-setting run. However, this market has been unpredictable all year, so a little thing like history isn’t going to be an intimidation. Let’s just see what happens from here and be ready to act when appropriate. Today's Portfolio Highlights:  Stocks Under $10: Over the past four quarters, Surface Oncology (SURF) has beaten earnings estimates twice, matched once and missed once. That’s not bad for a small biotech name! Plus, while a loss is still expected for this year, it has narrowed enough to make this stock a Zacks Rank #2 (Buy). However, Brian is most impressed with SURF’s partnership with Merck. The two companies entered into a clinical trial to evaluate the effectiveness of combining a SURF drug with Merck’s Keytruda, which just so happened to generate more than $11 billion in sales last year. If this collaboration works, the editor expects the stock to double or triple before getting bought out. Read the full write-up for a lot more on SURF.  Zacks Top 10 Stocks: Investors are hoping that Zoom Video’s (ZM) impressive fiscal second-quarter performance will rub off on other work-from-home stocks, such as DocuSign (DOCU). The e-signature solutions company reports after the bell on Thursday, but that didn’t keep shares from soaring 20.5% on Tuesday. There were several double-digit winners across the ZU services today, but none as big as DOCU.  Zacks Short List: This week's adjustment included only one change. The portfolio short-covered Ross Stores (ROST) for a 2.5% return and replaced it by adding Marvell Technology Group (MRVL). Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short List Trader Guide. All the Best, Jim Giaquinto Recommendations from Zacks' Private Portfolios: Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>  Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021

Market Slips Slightly While Waiting for Stimulus

Market Slips Slightly While Waiting for Stimulus Hope for a pre-election stimulus deal was not enough to give the market a second straight session of gains, as stocks moved slightly lower Wednesday after some back-and-forth action. We’re kind of in a limbo right now when it comes to this stimulus deal. The two sides have different ideas what the relief would look like, but they’re pretty much saying the same thing right now: ‘We’re making progress and are optimistic, but we’re still far away from an agreement’. Where does that leave the market? Well, today it left us with a moderately lower session and the second decline in the past three days. The S&P was off 0.22% to 3435.56, while the NASDAQ slipped 0.28% (or almost 32 points) to 11,484.69. The Dow declined 0.35% (or nearly 98 points) to 28,210.82.   The market has been treading water since Monday’s sharp plunge of well over 1% as it waits for some kind of breakthrough in Washington. With the election now less than two weeks away, investors apparently require a little more than encouraging words to rally. They’d like to see some real action, but sentiment on this front is growing gloomier by the day. Meanwhile, Netflix (NFLX) slumped nearly 7% on Wednesday after the streaming giant’s disappointing third-quarter report last night that included much fewer paid subscriber additions than expected. But Snap (SNAP) soared more than 28% after the mobile camera application shocked the market with a third-quarter profit. It also positively surprises on revenue and daily active users. The big report after the close today was electric car pioneer Tesla (TSLA), which beat on both earnings and revenues. Shares are up approximately 2.8% after hours, as of this writing. Tomorrow will be the busiest day of earnings this week with reports from the likes of Intel (INTC), Coca-Cola (KO), AT&T (T), Danaher (DHR), Union Pacific (UNP) and dozens of others.  Today's Portfolio Highlights: Options Trader: For the second time in the past three days, Kevin added two names to the portfolio. On Wednesday, the editor bought to open an April 100.00 Call in Yum Brands (YUM) and bought to open a March 135.00 Call in Nasdaq (NDAQ). YUM is the world’s largest restaurant company in terms of units with brands that include KFC, Pizza Hut and Taco Bell. This Zacks Rank #2 (Buy) has a 3.65% positive Earnings ESP for the quarter coming on October 29 and a chart that looks poised for a breakout. NDAQ is a holding company that provides trading, clearing, exchange technology, securities listing, information and public company services. This Zacks Rank #3 (Hold) just reported a solid quarter with a positive earnings surprise of 5.51% and a positive sales surprise of 3.92%. Kevin expects the stock to continue moving higher. Read the full write-up for more specifics on these moves. Surprise Trader: For the past six quarters in a row, Century Communities (CCS) has beaten the Zacks Consensus Estimate. And it looks set to do it again after the bell on Wednesday, October 28. The home building and construction company has a positive Earnings ESP of 7.53% for the report. Dave has pulled a lot of profit out of the home builders industry, which is in the top 2% of the Zacks Industry Rank, and he plans to do it again with CCS. The editor added this stock on Wednesday with an 11.9% allocation, while also selling the “disappointing” Silgan (SLGN) position. The full write-up has more on today’s moves. Commodity Innovators: Shares of Freeport-McMoRan (FCX) have soared along with the prices of copper, gold and silver. In fact, the stock has gained so much that even a strong earnings report tomorrow might not be able to push it any higher. Therefore, Jeremy decided to sell this miner on the eve of its earnings announcement to secure a nice return of more than 55% in a little under four months. The editor will be looking to get back into FCX down the road at a lower price.   Home Run Investor: The portfolio cashed in a double-digit winner on Wednesday, but retained its exposure to a hot space. Brian sold water management and drainage solutions company Advanced Drainage Systems (WMS) for a 12.7% return in just a little over two months. The new buy is Arcosa (ACA), which is also in the building products space as a manufacturer of infrastructure-related products and services. ACA has topped the Zacks Consensus Estimate in each of the last four quarters with an average surprise of 37%. Annual earnings estimates have been moving higher, which helped the stock attain Zacks Rank #2 (Buy) status. Basically, ACA has a better valuation than WMS, so this trade allows the portfolio to make some money and stay in a strong industry with potential for even more profits down the road. Read the full write-up for more info on this action. Counterstrike: Sometimes those algos can be “very nasty”. But that’s all right! This portfolio thrives on the chaos that they bring. For example, iRobot (IRBT) beat earnings by 183% last night and raised its guidance… yet shares of this robots manufacturer are down double-digits today. Jeremy thinks that was unnecessary for the maker of Roomba robot vacuums, so he added IRBT on Wednesday with a 5% allocation. Read the full write-up for more.  Technology Innovators: The best performer on Wednesday among all ZU services was easily Calix (CALX), which soared 20.5%. The result more than doubled the next best mover. This global leader in access innovation added onto its impressive earnings history with strong third quarter results that included better-than-expected numbers for both the top and bottom lines. Brian considers CALX to be a cloud play and he added it back in mid-July. Since then, it has become one of the portfolio’s biggest winners with a rise of over 64% since inception. Have a Great Evening, Jim Giaquinto Recommendations from Zacks' Private Portfolios: Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>  Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021

Stocks Bounce Back While Waiting for Big Tech Earnings

Stocks Bounce Back While Waiting for Big Tech Earnings We finally got a bounce back from the recent selloffs on Thursday, as the market digested of deluge of (mostly positive) earnings reports and economic data. The NASDAQ jumped 1.64% (or about 180 points) today to 11,185.59. All of the FAANGs were higher in preparation of four reports coming after the bell. Facebook (FB) was up nearly 5%, while Apple (AAPL) and Alphabet (GOOG) each gained more than 3% and Amazon (AMZN) rose 1.5%. Even Netflix (NFLX) moved higher 3.7% after announcing a rise in prices. Meanwhile, the S&P increased 1.19% to 3310.11 and the Dow advanced 0.52% (or around 140 points) to 26,659.11. These indices broke their 3-day and 4-day losing streaks, respectively. Of course, these gains are just a drop in the bucket compared to what the market lost in the previous three days. For example, the Dow was off 1800 points through Wednesday. Nevertheless, the first step is always to stop the bleeding. Economic data provided a bit of a suture on Thursday, especially with third-quarter GDP beating expectations and soaring by 33.1%. Also, jobless claims came in at 751,000, which was the second straight week below 800K and better than expectations. This data, especially the GDP, suggests that the economy responded well to restrictions being eased from the pandemic. At the same time, though, these numbers are rather bittersweet as they come during rising coronavirus cases and the threat of new lockdowns. However, the bigger reason for the bounce may have been excitement over FAANG Day. After the bell, FB, AAPL, AMZN and GOOG all reported their quarterly results. They beat expectations, but there were a few hiccups. The market seems most impressed with GOOG, which is up about 8% after hours. But AAPL is down more than 5% as iPhone sales were lower and AMZN is off 1.5%. FB has slipped less than 1% perhaps due to fewer users in the quarter. (All of these numbers are as of this writing.) As Jeremy said in Counterstrike today: “Tech is looking weak after hours, but we will have to see how things shape up. When you have Facebook, Amazon, Apple and Google all on one day, some weird moves can happen.” Tomorrow will be interesting. Today's Portfolio Highlights: Income Investor: The portfolio added two names on Thursday that are in the middle of extensive capital spending plans that should benefit investors for years to come. Firstly, Duke Energy (DUK) is one of the largest utility companies in the U.S. with plans to eventually become a renewable energy force in the next several years. That should be beneficial to its already impressive dividend growth. DUK has paid a dividend for 94 consecutive years and raised the annual payment for the last 14. It currently yields 4.2%. The other buy is Nucor (NUE), one of the largest and most diversified steel makers in the country. The company plans to spend $1.7 billion in 2020 alone as part of its capital spending plan, which includes expanding its steel mills. Maddy considers NUE to be a play on infrastructure spending, since the company should be a supplier once these large projects are underway. NUE has increased its annual payout for 47 straight years and has a dividend yield of 3.5%. Learn a lot more about these moves in the editor’s complete commentary. Blockchain Innovators: The past two quarters have seen unexpected profits and triple-digit surprises for Brightcove (BCOV), a Zacks Rank #2 (Buy) provider of cloud content services for publishing and distributing professional digital media. That description alone explains the importance of blockchain in this business. But if you want even more proof, the company’s CEO actually owns a blockchain-based bank. The more than 300% earnings growth forecast for this year is nice, but that’s more a result of its low bar. Dave is much more impressed with the 20% growth for next year. Therefore, the editor added BCOV on Thursday and got out of the underperforming Celestica (CLS) position. Read the full write-up for more. Stocks Under $10: Ever since SunOpta (STKL) was added back in early June, this natural & organic food, supplements and health & beauty company has been a strong performer for the portfolio. However, the stock is starting to show some weakness, so Brian decided to sell it on Thursday to secure a nice return of more than 40% in just under five months. He also sold the underperforming Tecnoglass (TGLS) and Costamare (CMRE) positions. The service is now a bit underweight, so the editor may be adding a new one tomorrow. TAZR Trader: There were two big pieces of news for Shopify (SHOP) this week. Earlier today, the cloud-based ecommerce platform reported strong third-quarter results with an earnings beat of 125% and a revenue surprise of 15.7%. The company withdrew its guidance, but that’s rather normal during this pandemic. The other bit of news came earlier this week when SHOP announced a commerce partnership with TikTok that “brings the world’s leading destination for short form video to Shopify’s more than one million merchants”. Kevin thinks analysts will be re-working their models on SHOP after these recent developments. He decided to add a small, 5% allocation in SHOP on Thursday and will pick up more on any volatility moving forward. Read the full write-up for specifics on this new addition, along with insights from a couple of analyst upgrades earlier this month.    Surprise Trader: There are other things happening on November 3 besides the election. For example, steel company Ternium (TX) will be reporting earnings. This Zacks Rank #2 (Buy) has a positive Earnings ESP of 16.91% for the quarter coming after the bell on Tuesday. It had a nice beat of over 230% last time. Dave added TX on Thursday with a 10% allocation, while also selling 1800Flowers.com (FLWS). The full write-up has more on today’s action. Value Investor: We’re having a pretty good earnings season so far, despite the recent selloffs, rising coronavirus cases and election volatility. Case in point, social media staple Pinterest (PINS) reported strong third-quarter results, which included revenue that jumped 58% year over year and earnings of 13 cents that trounced the Zacks Consensus Estimate of a penny. Monthly active users were up 37%. And the company says revenue growth of 60% this quarter is a possibility. Shares of PINS were up nearly 27% on Thursday, which easily made it the top performer of the day among all ZU names. It’s also the #1 stock in this portfolio with a surge of more than 214% since its addition in late May. Until Tomorrow, Jim Giaquinto Recommendations from Zacks' Private Portfolios: Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>  Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021

Dow Drops Over 1% on Market"s Second Straight Day of Losses

Dow Drops Over 1% on Market's Second Straight Day of Losses SPECIAL ALERT: The May episode of the Zacks Ultimate Strategy Session is now available for viewing! Tune in to this “must-see” event when Kevin Matras, David Bartosiak, Dr. John Blank, Daniel Laboe and Sheraz Mian discuss the investment landscape from several angles. Don’t miss your chance to hear: ▪ David and John Agree to Disagree on whether Cryptocurrencies remain a key building block in a FinTech future or whether leverage, momentum-buying and other forces distort prices ▪ Kevin answers why some individuals see their portfolios going down while the Dow and S&P 500 make new highs in Zacks Mailbag ▪ Sheraz and Daniel choose one portfolio to give feedback for improvement ▪ And much more Simply log on to Zacks.com and view the May episode here. And please let us know what you think of this format. Email all feedback to mailbag@zacks.com. That makes back-to-back losing sessions for the market on Tuesday, but this time the Dow got the worst of it with a plunge of well over 1%. Tech actually had a late-day rally that nearly brought the beleaguered NASDAQ to breakeven… but not quite. Tech may be out of favor at the moment given concerns of rising inflation and a frothy market, but a lot of the big stocks from the space found some buyers later in the session. Names like Apple (AAPL), Tesla (TSLA) and Amazon (AMZN) bounced after hitting their 200-days. AMZN finished with a gain of more than 1%, as did fellow FAANG Netflix (NFLX, +1.7%). As a result, the NASDAQ plunged over 2% at one point on Tuesday, but rallied in the second half and finished lower by only 0.09% (or about 12 points) to 13,389.43. The index dropped more than 2.5% just yesterday, so it was spared a more than 4% rout in two days. Meanwhile, the S&P slipped another 0.87% to 4152.10, following a 1.04% dip on Monday. The Dow has been the beneficiary of the rotation out of tech, but it just couldn’t get it together today. The index slipped 1.36% (or about 473 points) to 34,269.16, which marked its first drop of more than 400 points since late February. It was up 2.7% last week after hitting record closes in the final three sessions, but it’s been in a sluggish mood of late.    “Rough start to the week. If you’re like me and took a couple hits, its time to get your head right and have a green day tomorrow. Time to tighten things up, stay nimble and not permit draw downs,” said Jeremy Mullin in today’s Counterstrike. Inflation seems to be the market’s favorite topic at the moment, and it will take centerstage tomorrow when the consumer price index for April is released. It’s expected to show a huge gain and could be a factor in tomorrow’s trading. We'll also be getting earnings reports from well over 100 companies on Wednesday. Today's Portfolio Highlights: Stocks Under $10: The market doesn't like technology right now, so Brian decided to take a few of those names off the table on Tuesday and cash in a couple double-digit winners. He sold Himax Technologies (HIMX) for 31.8% in less than four months and Extreme Networks (EXTR) for a 16.8% return in two months. Immersion Corp. (IMMR) was also sold for a loss. The editor immediately filled one of those opened spots today by adding office products company Acco Brands Corp. (ACCO). The company has beaten the Zacks Consensus Estimate in each of the last four quarters and has an “awesome” valuation. Rising earnings estimates for this year and next have made ACCO a Zacks Rank #2 (Buy). Learn a lot more about today’s moves in the complete commentary. In other news, this portfolio has the best performer among all ZU names over the past 30 days as GT Biopharma (GTBP) soared 44.6%. It also has the third biggest mover in that time with Cross Country Healthcare (CCRN, +30.3%).  Surprise Trader: The retailers are coming! Dave might be picking up some big box stores in the days ahead, but he’s going out West for the season’s first pick. Boot Barn (BOOT) is a Zacks Rank #2 (Buy) lifestyle retail chain devoted to western and work-related footwear, apparel and accessories. The company has a positive Earnings ESP of 20.46% for the quarter coming after the bell tomorrow. The editor added BOOT on Tuesday with a 12.5% allocation, while also selling Avnet (AVT) for a small loss. See the complete commentary for more on today’s action. By the way, this portfolio had the best performer of the day as home fitness equipment maker Nautilus Group (NLS) rose 9.9% after a strong quarterly report. TAZR Trader: Amid all the NASDAQ craziness on Monday, Magnite (MGNI) was reporting a solid quarter with the top and bottom lines both improving solidly on a year-over-year basis. This provider of a sell-side advertising platform hasn’t done much since being re-added back in late March, but the portfolio did pull a 25% profit out of this name earlier in the year. Kevin still likes MGNI and used today’s pullback to add more to the position. Read the full write-up to learn what the analysts are saying about MGNI and to get an update on The Trade Desk (TTD). Zacks Short Sell List: Two names were swapped out in this week's adjustment. The portfolio short-covered Southwest Airlines (LUV, +2.05%) and T-Mobile US (TMUS). The new buys that replaced these names were Chegg (CHGG) and China Lodging Group (HTHT). Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short Sell List Trader Guide. Headline Trader: "Investors are doing a quarterly reassessment of their holdings at these frothy levels and are making the proper reallocations. Since November, we have been experiencing this rotation from tech to cyclicals, with growth consolidating and value stocks driving the market higher. "Many analysts and investors are convinced that this trend will continue despite today's minor reversal, but I remain skeptical. Many of these value names already sit at stretched levels. "The price drops we see across the public equity market create a much more attractive setup for fresh capital than what we were looking at a couple of weeks ago. Everyone is hunting for a bottom, and that is what drove the tech bid today. Investors and traders (specifically this new cohort of retail traders) are always looking for a reason to buy up exciting innovation names." -- Dan Laboe All the Best, Jim Giaquinto Recommendations from Zacks' Private Portfolios: Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>  Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021

Major Indices Surge Double Digits in First Half of 2021

Major Indices Surge Double Digits in First Half of 2021 The market may be pretty slow right now, but totals for the first half and second quarter show that stocks have actually been on a tear for most of 2021. Furthermore, those periods ended on Wednesday with the S&P once again setting a new record. For the first half of the year, each of the major indices are up double digits. The S&P soared 14.4%, while the Dow advanced 12.7% and the NASDAQ rose12.5%. A good amount of the half saw technology taking a backseat to recovery names, but that has been changing in recent weeks. As a result, the NASDAQ outperformed in the second quarter with a rise of 9.5%, while the S&P was up 8.2%. The Dow only managed a 4.6% advance as those re-opening names fell out of favor. The recovery has certainly been vibrant, but you wouldn't know it by the past few weeks. This summer swoon has put the market in a lethargic mood. Investors are finally able to get out now that that pandemic is losing its grip. The two potential market movers on the horizon are the jobs report on Friday and the next earnings season in a couple weeks. Speaking of jobs, the ADP employment report today stated that private payrolls added 692,000 in June, which easily beat expectations of 600K. However, it was less than the previous month’s 886K, which was actually downgraded from the original print of 978K. Meanwhile, pending home sales jumped 8% month over month in May, which marked a dramatic turnaround from a 4.4% plunge in April and provided a nice follow-up to yesterday’s strong data on consumer confidence and home prices. But it didn’t provide much inspiration for the S&P on Wednesday, which advanced only 0.13% to 4297.50. The index has gained less than 10 points this week, though it just completed its fifth straight session with a record high. Now that's slow! The NASDAQ slipped 0.17% (or about 24 points) to 14,503.95, which ends back-to-back record highs and is only the second day in the past seven without reaching a milestone. The Dow managed a respectable gain of 0.61% (or about 210 points) to 34,502.51, but the index was actually down slightly for the month of June as recovery names were pushed aside by tech. That’s why the NASDAQ was up 5.5% last month and the S&P advanced 2.2%. The recovery has been extremely impressive so far and it’s not done yet! Now we start a new month… a new quarter… and a new half! Today's Portfolio Highlights: Home Run Investor: The thing about breakouts is that you have to be in the stock before it makes the move. That’s why Brian added Sterling Construction (STRL) on Wednesday. This Zacks Rank #2 (Buy) is at the low end of the range with potential for a substantial move higher. Furthermore, STRL topped the Zacks Consensus Estimate in three of the past four quarters and has a “great” valuation with margins moving higher in the past couple of quarters. The editor cleared plenty of room for this name by selling three positions. The big winner was LeMaitre Vascular (LMAT), which returned 27.1% in less than four months. He also sold Virtu Financial (VIRT) and Ooma (OOMA) for losses. STRL fills one of those spots, but there’s room for more so there might be another addition tomorrow. Read the full write-up for more on today’s action. Large-Cap Trader: The turn of the month means it’s time for some changes to this portfolio. On the last day of June, John added the following three companies: • Micron (MU) – a leading semiconductor memory company • Jabil (JBL) – provider of electronic manufacturing services and solutions • Williams Sonoma (WSM) – a major home furnishings retailer All of these picks have impressive histories of topping the Zacks Consensus Estimate with double-digit beats over the past four quarters. They’re also from highly-ranked industries and are showing growth at a reasonable price (GARP). The editor is using set-aside cash this time around, so there are no sells. The portfolio weights come to about 5% each. Read the full write-up for a lot more on all of these new additions. Healthcare Innovators: This portfolio again had the best-performing stock of the day as Editas Medicine (EDIT) jumped 22.86%, which doubled the next biggest gainer. Gene-editing names have been doing very well since Intellia Therapeutics (NTLA) and its partner announced some solid Phase 1 data recently. EDIT is also among the biggest winners over the past 30 days with a surge of 66.8%. By the way, you may remember that Kevin sold NTLA earlier this week for a more than 90% return in less than five months! All the Best, Jim Giaquinto Recommendations from Zacks' Private Portfolios: Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>  Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021

Stocks Mixed Amid Earnings Reports, Powell and PPI

Stocks Mixed Amid Earnings Reports, Powell and PPI SPECIAL ALERT: Remember, the July episode of the Zacks Ultimate Strategy Session is now available for viewing! Don’t miss your chance to hear: ▪ Jeremy Mullin and Brian Bolan Agree to Disagree on whether crude oil is in a bullish run and will print $100 a barrel before it’s over ▪ Kevin Matras answers why some stocks have a Zacks Rank of 1 or 2 but can have a Style Score of F, and why some stocks have a Zacks Rank of 4 or 5 but can have a Style Score of A. He also discusses the Employment Situation Report, GDP, Interest Rates, Consumer Confidence and Earnings ▪ Sheraz Mian and Brian Bolan choose one portfolio to give feedback for improvement ▪ Market conditions from both fundamental and technical views ▪ The full list of top-performing stocks over the past 30 days ▪ New stocks added to the Zacks Ultimate portfolio ▪ And much more Simply log on to Zacks.com and view the July episode here. And please let us know what you think of these monthly episodes. Email all feedback to mailbag@zacks.com. Stocks were mixed on Wednesday as this busy week crossed the halfway point with another inflation report, testimony from the Fed Chair and a fresh round of earnings reports. The Dow finished higher by 0.13% (or around 44 points) to 34,933.23, while the S&P was up 0.12% to 4374.30. The NASDAQ slipped to the negative side with a decline of 0.22% (or about 32 points) to 14,644.95. The Dow and S&P fell into the red momentarily before getting back on the plus side. All of these indices were down yesterday, but remain just below all-time highs that were set as recently as this past Monday. Fed Chair Jerome Powell said pretty much what investors wanted to hear in the first of his two-day Monetary Policy Report to Congress. In a nutshell, the Committee plans to remain patient and keep these easy monetary policies in place for now. The economy hasn’t reached the benchmarks yet that will require a change, and inflation will eventually moderate. That last part is especially important to investors, who just suffered through a one-two punch of rising inflation indicators. Today we heard that the PPI jumped 7.3% year over year and was up 1% from the previous month, which was well above expectations. This result comes just a day after the CPI, which soared 5.4% year over year. Investors once again kept their cool amid signs of rising inflation. They’ve been skeptical of the Fed calling this situation transitory, but appear to be giving them the benefit of the doubt for now. Meanwhile, another round of big banks reported quarterly results this morning. The positive earnings surprises were immense with Citigroup (C) beating by 46.4%, Wells Fargo (WFC) topping by 45.3% and Bank of America (BAC) exceeding the Zacks Consensus Estimate by 33.8%. However, the toplines of these reports were not as decisive. WFC beat revenue expectations by 14%, which explains why this company bucked the trend and rose 4% on the same day of its release. But C barely beat forecasts and BAC missed by more than 1%, which sent these names lower by 0.3% and 2.5%, respectively, on Wednesday. The schedule tomorrow includes reports from Taiwan Semiconductor (TSM), UnitedHealth (UNH), Morgan Stanley (MS) and USB Bancorp (USB), all before the market opens. We’ll also be getting the second half of Mr. Powell’s testimony to Congress as he goes in front of the Senate Banking Committee. And, of course, Thursday means it’s time for jobless claims as well. Today's Portfolio Highlights: Home Run Investor: This portfolio looks for aggressive growth companies that could soar in the future, which is why Brian usually focuses on tech and some industrial plays. But an arts and crafts company? Yes, the editor sees a lot to like in Joann (JOAN), a sewing/fabrics retailer with 855 stores in 49 states. The company beat the Zacks Consensus Estimate by 155% in the April quarter, while rising earnings estimates made it a Zacks Rank #2 (Buy). Brian also appreciates its dividend yield of 2.6%, the great valuation and its CEO buying more than 47K shares a few months back. The service added JOAN on Wednesday, while also dropping Harrow Health (HROW), Dream Finders Homes (DFH) and The ONE Group Hospitality (STKS). Read the full write-up for more on today’s action. Counterstrike: There’s been a lot of good news for Duck Creek Technologies (DCT) of late. First of all, the company crushed the Zacks Consensus Estimate last week with a positive earnings surprise of 400%! And then yesterday it got a large upgrade from a major firm. Therefore, today’s pullback was a great opportunity for Jeremy to add this stock with a 10% allocation. DCT is a Zacks Rank #1 (Strong Buy) provider of SaaS delivered enterprise software to the property & casualty insurance industry. The portfolio also sold Airbnb (ABNB) for a slight loss today. Read the complete commentary for more on today's action, including a look at DCT’s chart and more info on its upgrade and earnings. Healthcare Innovators: Back in May, Kevin had to sell Invitae (NVTA) for a double-digit loss because it got caught up in that ARK (ARKG) bubble burst. But now the dust has settled and the editor thinks it’s time to get back into this innovative company. He has always been a big fan of NVTA because “they combine the best of genetic sequencing, medical-grade diagnostics, and information database/AI technologies to leverage the future of smart health”. It’s now trading under 10X next year’s sales consensus with revenues expected to grow over 50%. Read more about NVTA’s second chance in the complete commentary. In other news, the portfolio had a top performer today as Dicerna Pharmaceuticals (DRNA) rose 3.6%. Surprise Trader: For the past 11 straight quarters, Halliburton (HAL) has beaten the Zacks Consensus Estimate. Dave thinks this Zacks Rank #2 (Buy) has a good chance of making it 12 in a row when it reports before the bell on Tuesday, July 20. HAL is one of the largest oilfield service providers in the world, offering a variety of equipment, maintenance, and engineering and construction services to the energy, industrial and government sectors. The editor added HAL on Wednesday with a 12.5% allocation. Read the full write-up for more. Headline Trader: "Federal Reserve Chairman Jerome Powell testified before the House Financial Services Committee this afternoon, stating that the current inflation, though "notably" elevated, will moderate in coming months, in line with his transitory stance. Powell's comments caused the US 10 Year Treasury to plunge over 7 basis points back below 1.4%. "The majority of the committee voiced concerns about soaring consumer prices. Still, Jerome maintained his stoic viewpoint on the transitory state of the pricing pressures along with supply chain bottlenecks that will ostensibly work themselves out. "Jerome went on to say that the Fed 'would be prepared to adjust the stance of monetary policy as appropriate if we saw signs that the path of inflation or long-term inflation expectations were moving materially and persistently beyond levels consistent with our goals.' "This means that 5%+ inflation growth (year-over-year) will not change the Fed's stance on rates over the next few months. The concerning inflationary data in months reflect the disinflationary period amid the depths of the pandemic this time last year. The Fed will only move to control pricing pressure if this 5%+ inflation lingers into this fall." -- Dan Laboe All the Best, Jim Giaquinto Recommendations from Zacks' Private Portfolios: Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>  Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021

Five-Day Rally Ends While Waiting for Big Tech Reports

Five-Day Rally Ends While Waiting for Big Tech Reports Stocks finally took a break after five days of gains on Tuesday as investors waited on a trio of big tech heavyweights to report after the bell. Meanwhile, the Fed’s two-day policy meeting began today. The NASDAQ saw the sharpest decline of 1.21% (or about 180 points) to 14,660.58. Shares of Alphabet (GOOG) dropped more than 2% in the session, while Apple (AAPL) was off 1.5% and Microsoft (MSFT) dipped almost 0.9%. These declines came as the market awaited their quarterly reports after the close. The S&P, which has a good amount of tech exposure as well, slipped 0.47% to 4401.46, while the Dow declined 0.24% (or about 85 points) to 35,058.52. These losses end a very impressive five-day winning streak for all the indices, which began after the sharp selloff on Monday, July 19 due to delta variant concerns. It also ended two consecutive sessions of closing highs.   We saw positive earnings data on Tuesday with rising consumer confidence in July and soaring home prices in May, while durable goods orders increased but fell short of expectations. However, investors were most interested with the upcoming tech reports, which all beat expectations on both the top and bottom lines. AAPL’s fiscal third quarter earnings beat the Zacks Consensus Estimate by 30% as revenues jumped 36% year over year. MSFT’s fiscal fourth quarter earnings beat by 14.2% as revenue for its Intelligent Cloud climbed 30%. And GOOG’s second quarter earnings topped 37% on total revenue growth of 62%. Unsurprisingly, though, the market’s being kind of a spoilsport, just like it was last earnings season. AAPL and MSFT are each off about 2% afterhours, as of this writing, while GOOG could only muster a 0.5% advance. The major tech name coming after the bell on Thursday is Facebook (FB). Other reports include Pfizer (PFE), Shopify (SHOP), McDonalds (MCD), Boeing (BA), and hundreds of others. Tomorrow may end up being the most consequential session of the week. Not only will we see how the market reacts to tonight’s three major reports, but we’ll also be hearing from Fed Chair Jerome Powell after the Committee concludes its two-day meeting. Will the delta variant impact their future plans, especially when it comes to tapering? We’ll see... Today's Portfolio Highlights: Stocks Under $10: With people finally being able to celebrate birthdays and other special events, it’s no wonder than Party City Holdco (PRTY) has caught Brian’s eye. Earnings estimates have moved higher for this year and next, which helped this party supplies company gain the enviable status of Zacks Rank #2 (Buy). The editor likes its valuation of 14x forward earnings multiple, especially for a company that posted topline growth of 3% last quarter with expectations for 11% this year. He also appreciates that margins have been improving by about 80 basis points in each of the last few quarters. Brian decided to buy the dip in PRTY on Tuesday, while also getting rid of Berry Corp. (BRY) after a downturn in the oil patch. Read the complete commentary for more specifics on today’s action. Meanwhile, Cassava Sciences (SAVA) was the best performer among all ZU names today with a rise of 6.3% and is also the biggest gainer in the past 30 days by surging 62.6%. Surprise Trader: Over the past four quarters, AdvanSix (ASIX) has topped the Zacks Consensus Estimate each time with an average beat of 45%. And now this chemicals company, which is a producer and supplier of Nylon 6 materials, has a positive Earnings ESP of 21.3% for the quarter coming before the bell on Friday, July 30. This Zacks Rank #1 (Strong Buy) also has a Zacks VGM Score of “A”. Dave thinks this stock is poised for another positive surprise, so he added ASIX on Tuesday with a 12.5% allocation while also selling Hancock Whitney (HWC) for a slight loss. Read the full write-up for more on today’s moves. Large-Cap Trader: We’re having a selloff in the last week of July, so John thought this was a good time for his turn-of-the-month portfolio changes. He sold Jabil (JBL) and NetApp (NTAP) for slight losses and then bought three large-cap growth stocks from a diverse set of attractive industries. The new buys are: • Laboratory Corp. of America (LH) – a leading global life sciences company • Lattice Semiconductor (LSCC) – developer of programmable logic devices • Regal Beloit (RBC) – maker of motion control and power generation products In addition to being major players in top-ranked industries, these companies are Zacks Rank #2s (Buys) that beat earnings estimates by double digits in their most recent quarterly reports. These companies also averaged double-digit surprises over the last four reports. The editor is putting 5% into each of these names. Make sure to read his complete commentary to learn a lot more about these new buys. Headline Trader: Shares of FedEx (FDX) sold off this morning in sympathy with its main competitor UPS (UPS), which announced slowing domestic volumes and pinching margins in its quarterly report today. However, Dan thinks the prospects of these two companies are different, despite the similarity of their business. UPS was at a massive valuation premium compared to its competitor, so this pullback seems justifiable. But the editor thinks FDX is ready for its “next leg higher as today’s sell-off pulls back the slingshot”. He thinks this is the perfect entry point to double down on his FDX position. Read the full write-up for more.   Zacks Short Sell List: This week's adjustment swapped out two positions. The short-covered stocks were Incyte (INCY, +3.3%) and StoneCo (STNE, +1.9%), while the new buys that filled these opened spots were GoodRx Holdings (GDRX) and Maxar Technologies (MAXR). Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short Sell List Trader Guide. In other news, this portfolio had a top performer today as the short in Las Vegas Sands (LVS) rose nearly 4%. All the Best, Jim Giaquinto Recommendations from Zacks' Private Portfolios: Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>  Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021

S&P, Dow Reach Record Highs for Fourth Consecutive Session

S&P, Dow Reach Record Highs for Fourth Consecutive Session If it weren’t for all the new highs, you could call this a boring week for the market. Two of the major indices grinded higher and set fresh records throughout the period, yet their weekly advances were less than 1% amid a deluge of economic data and earnings reports. The S&P was the best performer on Friday with a mighty rise of 0.16% to 4468, while the Dow increased 0.04% (or about 15 points) to 35,515.38. That makes four consecutive days of record highs for both indices, yet advances of only 0.7% and 0.9%, respectively, for the week. The NASDAQ was also up 0.04% (or around 6 points) to 14,822.90 today, giving it a tiny loss of just under 13 points (or less than 0.1%) for the five days. We kicked things off on Monday still excited by news that the economy added 943K jobs in July, and then learned that the Senate approved the $1 trillion infrastructure bill. The next two days included inflation indicators (CPI & PPI) that showed prices still rocketing higher, but not as badly as many investors feared. And jobless claims yesterday were acceptable with a decline week over week and the print staying below 400K. The data deluge continued on Friday, as the University of Michigan consumer confidence number dipped to 70.2 for August. That’s well below expectations and the previous month’s result in the low 80s. “We could speculate why this is, but I think its simply the combination of the delta variant and inflation headlines,” said Jeremy Mullin in Counterstrike. “We are bombarded with this news and I think the consumer is reacting to that news.” “Bombarded” is a good word. Yet throughout all the data, stocks grinded higher as the economic recovery seems to be moving along despite the challenges. And the strong earnings season has certainly helped to keep the market’s spirits up. The number of S&P companies that have beaten earnings and revenue expectations so far remain over 85% for each. Our Director of Research Sheraz Mian continues to analyze the numbers and just posted his most recent Earnings Preview article titled: “3 Things to Know About the Q2 Earnings Season”. And we’re not done yet, as some of the biggest retailers are set to come to the plate next week. We’ll be seeing reports from the likes of Walmart (WMT), Target (TGT), Home Depot (HD), Lowes (LOW), Deere (DE) as well as a few tech stragglers like NVIDIA (NVDA), Cisco (CSCO) and Applied Materials (AMAT). Over 95% of the S&P will have reported by the end of next week. Today's Portfolio Highlights: Surprise Trader: The final addition of the week is Agilent Tech (A), which will look to continue its streak of positive earnings surprises when it reports again after the bell on Tuesday, August 17. This Zacks Rank #2 (Buy) is an OEM of a broad-based portfolio of test and measurement products serving multiple end markets. It beat the Zacks Consensus Estimate by 18% last time and has a small positive Earnings ESP heading into next week’s print. Dave added A on Friday with a 12.5% allocation, while also selling the underperforming Rackspace (RXT) and GrowGeneration (GRWG) positions. See the complete commentary for more on today’s action. Counterstrike: Shares of F5 Networks (FFIV) soared to just under all-time highs after a solid quarterly report last month, but has since pulled back in what looks like a technical move down to the 21-day at $200. That makes it a great candidate for this portfolio. FFIV is a Zacks Rank #2 (Buy) provider of multi-cloud application services that beat earnings estimates by 11% recently while also boosting its fourth-quarter outlook. Jeremy added FFIV on Friday with a small 5% allocation with plans to add if the support holds. The editor also sold the stalling Thor Industries (THO) for a 10% return in just under two months and half of Ulta Beauty (ULTA) for 9.7% in about the same amount of time. He also sold Foot Locker (FL) ahead of its earnings report next month. Read the full write-up for more on today’s moves and the portfolio in general.     Insider Trader: A nice small cluster buy from a few key insiders at Dun & Bradstreet (DNB) convinced Tracey to add this provider of business decisioning data and analytics on Friday. The company has been around for decades, but it only went IPO last year. Shares are down 32% since the IPO, including a slide of 15% in the wake of the earnings report. But here’s the thing… nobody thinks the earnings report was that bad. So the selloff was overdone and the stock is now a value. Earlier this week, the CEO, the CFO and the Chief Legal Officer all bought shares… and you know how much the editor likes to see the usually-conservative chief lawyer put some money to work. She decided to join the bandwagon and add DNB with a 10% allocation today. Get more specifics in the complete write-up. Have a Great Weekend! Jim Giaquinto Recommendations from Zacks' Private Portfolios: Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>  Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021

S&P, NASDAQ Close at Record Highs Ahead of Jobs Report

S&P, NASDAQ Close at Record Highs Ahead of Jobs Report The market may be a bit nervous about the jobs report tomorrow, but that didn’t keep stocks from continuing to grind higher on Thursday and set a couple new closing highs. A better-than-expected jobless claims report helped keep things in the green before the big event. The S&P rose 0.28% to 4535.95 and the NASDAQ advanced 0.14% (or nearly 22 points) to 15,331.18, which marks record closing highs for both indices. They had both made history this past Monday as well in the wake of Fed Chair Jerome’s Powell’s comments at the virtual Jackson Hole meeting. But the biggest gainer on Thursday was the Dow, which hasn’t come along on the record-breaking ride but advanced by 0.37% (or more than 130 points) in the session to 35,443.82. The result snapped three days of losses. Just like last week, the big news comes on Friday with the Government Employment Situation scheduled for release tomorrow morning. Expectations are for approximately 720K jobs being added, which would be a step down from the previous month’s blockbuster result of 943K. However, a report in that neighborhood or better might be the final straw that starts the Fed to scale back on its super easy monetary policy. But, as highlighted in the Jackson Hole remarks last Friday, a tightening of the monthly bond purchases does not mean that interest rate hikes are close behind. "We will get the jobs number tomorrow, which will give the Fed an idea on where we are on unemployment. This number will be an indicator of how quickly the Fed will both taper and raise rates," said Jeremy Mullin in Counterstrike. "The expectations is that tapering will be moderate and the market is ok with that. Rising rates are well into the future, but a hot number could change that idea." But let’s not get ahead of ourselves. Instead, let's focus on the weekly jobless claims, which provided a nice appetizer for tomorrow’s number. The print came in at 340K, slightly better than expectations at 345K and marking a new pandemic-era low. It was a welcomed bounce back from yesterday’s disappointing ADP employment report, which stated that private payrolls added only 374K jobs last month. The result was well off of expectations for more than 600K. But neither of these reports should be considered a harbinger for what’s coming tomorrow. So get ready for a potentially hectic session before the long Labor Day weekend.   Today's Portfolio Highlights: Blockchain Innovators: Sometimes it’s a surprise to find out how a company employs blockchain technology, and then other times its self-evident. You can put ScanSource (SCSC) in the latter camp. It’s a value-added distributor of specialty technologies, including automatic identification and point-of-sale products, as well as business telephone products. For a company that develops new technologies, blockchain is essential. And it’s certainly been working for SCSC. The Zacks Rank #2 (Buy) topped the Zacks Consensus Estimate for five straight quarters now. EPS growth for this year is forecasted at 14.6%, while next year should rise to 17.7%. If the earnings trend continues, Dave wouldn’t be surprised to see SCSC get back to 2017 highs near $45. The editor also sold Air Transport Services (ATSG) today for 37.9% to make room for new opportunities. Read the full write-up for more on today’s moves.   Commodity Innovators: The portfolio added Cabot Oil & Gas Corp. (COG) and Rayonier (RYN) on Thursday. COG is a Zacks Rank #1 (Strong Buy) natural gas play, which should benefit from higher prices in the winter months. It has a great-looking chart and a 2.7% dividend. RYN is a timberland REIT that held up well during the lumber selloff and beat the Zacks Consensus Estimate by 120% last quarter. This Zacks Rank #2 (Buy) has a dividend of almost 3% and should benefit on any rebound in lumber prices. Jeremy considers COG to be a mid-term stock, while RYN is a long-term. Read the full write-up for more specifics on these moves. Options Trader: Coming out of the pandemic, sales at American Express (AXP) have been slower than other payment processors. “I think its top heavy right now,” said Kevin. “And their chart suggests it might be getting tired.” Therefore, the editor bought to open a December 160.00 Put in AXP. He notes that this is a riskier trade, so use caution and get all the specifics on this move in the complete commentary. Surprise Trader: Taking some profits from a soaring stock is never a bad idea, so Dave sold half of DICK’S Sporting Goods (DKS) on Thursday for a nice return of more than 35% in just two weeks. On August 25, the company reported its fifth straight positive surprise (and 15th beat out of past 16 quarters) and raised its fiscal 2021 view. Now the portfolio gets a nice profit and lets the rest run to harness any further upswings. The editor also sold all of sidewinder Ulta Beauty (ULTA) for 1.6% in a little over a week and all of Designer Brands (DBI) since “the sellers have taken control”.   Headline Trader: After breaking Dan’s price target this morning, the editor decided to sell Equinix (EQIX) for a more than 35% return in less than six months. Furthermore, tomorrow’s jobs report presents “a slippery slope” for the world’s largest data center REIT, since it is inversely correlated to interest rates. The editor also got out of Virtu Financial (VIRT) after it broke through a critical support level. Zacks Top 10 Stocks: This portfolio had the best performer among all ZU names on Thursday as Quanta Services (PWR) climbed approximately 12%. The company announced today that it entered into a definitive agreement to acquire Blattner Holding Company, a leading utility-scale renewable energy infrastructure solutions provider. The deal would increase PWR’s exposure to renewable energy markets, such as wind, solar and energy storage. PWR is a Zacks Rank #2 (Buy) provider of specialty contracting services, and one of the largest contractors serving the transmission and distribution sector of the North American electric utility industry. It is the second-best performer in the portfolio with a gain of nearly 67% since being added on January 4. All the Best, Jim Giaquinto Recommendations from Zacks' Private Portfolios: Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>  Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021

BTFD Arrives: Futures Rebound, Europe Surges While Asia Slumps On Evergrande Fears

BTFD Arrives: Futures Rebound, Europe Surges While Asia Slumps On Evergrande Fears Even though China was closed for a second day, and even though the Evergrande drama is nowhere closer to a resolution with a bond default imminent and with Beijing mute on how it will resolve the potential "Lehman moment" even as rating agency S&P chimed in saying a default is likely and it does not expect China’s government “to provide any direct support” to the privately owned developer, overnight the BTFD crew emerged in full force, and ramped futures amid growing speculation that Beijing will rescue the troubled developer... Algos about to go on a rampage — zerohedge (@zerohedge) September 21, 2021 ... pushing spoos almost 100 points higher from their Monday lows, and European stock were solidly in the green - despite Asian stocks hitting a one-month low - as investors tried to shake off fears of contagion from a potential collapse of China’s Evergrande, although gains were capped by concerns the Federal Reserve could set out a timeline to taper its stimulus at its meeting tomorrow. The dollar dropped from a one-month high, Treasury yields rose and cryptos rebounded from yesterday's rout. To be sure, the "this is not a Lehman moment" crowed was out in full force, as indicated by this note from Mizuho analysts who wrote that “while street wisdom is that Evergrande is not a ‘Lehman risk’, it is by no stretch of the imagination any meaningful comfort. It could end up being China’s proverbial house of cards ... with cross-sector headwinds already felt in materials/commodities.” At 7:00 a.m. ET, S&P 500 e-minis were up 34.00 points, or 0.79% and Nasdaq 100 e-minis 110.25 points, or 0.73%, while futures tracking the Dow  jumped 0.97%, a day after the index tumbled 1.8% in its worst day since late-July,  suggesting a rebound in sentiment after concerns about contagion from China Evergrande Group’s upcoming default woes roiled markets Monday. Dip-buyers in the last hour of trading Monday helped the S&P 500 pare some losses, though the index still posted the biggest drop since May. The bounce also came after the S&P 500 dropped substantially below its 50-day moving average - which had served as a resilient floor for the index this year - on Monday, its first major breach in more than six months. Freeport-McMoRan mining stocks higher with a 3% jump, following a 3.2% plunge in the S&P mining index a day earlier as copper prices hit a one-month low. Interest rate-sensitive banking stocks also bounced, tracking a rise in Treasury yields. Here are some of the biggest U.S. movers today: U.S.-listed Chinese stocks start to recover from Monday’s slump in premarket trading as the global selloff moderates. Alibaba (BABA US), Baidu (BIDU US), Nio (NIO US), Tencent Music (TME US)and Bilibili (BILI US) are among the gainers Verrica Pharma (VRCA US) plunges 30% in premarket trading after failing to get FDA approval for VP-102 for the treatment of molluscum contagiosum ReWalk Robotics (RWLK US) shares jump 43% in U.S. premarket trading amid a spike in volume in the stock. Being discussed on StockTwits Aprea Therapeutics gains 21% in U.S. premarket trading after the company reported complete remission in a bladder cancer patient in Phase 1/2 clinical trial of eprenetapopt in combination with pembrolizumab Lennar (LEN US) shares fell 3% in Monday postmarket trading after the homebuilder forecast 4Q new orders below analysts’ consensus hurt by unprecedented supply chain challenges ConocoPhillips (COP US) ticks higher in U.S. premarket trading after it agreed to buy Shell’s  Permian Basin assets for $9.5 billion in cash, accelerating the consolidation of the largest U.S. oil patch SmileDirect (SDC US) slightly higher in premarket trading after it said on Monday that it plans to enter France with an initial location in Paris KAR Global (KAR US) shares fell 4.6% in post-market trading on Monday after the company withdrew is full-year financial outlook citing disruption caused by chip shortage Sportradar (SRAD US) shares jumped 4.5% in Monday postmarket trading, after the company said basketball legend Michael Jordan will serve as a special adviser to its board and also increase his investment in the sports betting and entertainment services provider, effective immediately Orbital Energy Group (OEG US) gained 6% postmarket Monday after a unit won a contract  to construct 1,910 miles of rural broadband network in Virginia. Terms were not disclosed “So much of this information is already known that we don’t think it will necessary set off a wave of problems,” John Bilton, head of global multi-asset strategy at JPMorgan Asset Management, said on Bloomberg TV. “I’m more concerned about knock-on sentiment at a time when investor sentiment is a bit fragile. But when we look at the fundamentals -- the general growth, and direction in the wider economy -- we still feel reasonably confident that the situation will right itself.” Aside from worries over Evergrande’s ability to make good on $300 billion of liabilities, investors are also positioning for the two-day Fed meeting starting Tuesday, where policy makers are expected to start laying the groundwork for paring stimulus.  Europe's Stoxx 600 index climbed more than 1%, rebounding from the biggest slump in two months, with energy companies leading the advance and all industry sectors in the green. Royal Dutch Shell rose after the company offered shareholders a payout from the sale of shale oil fields. Universal Music Group BV shares soared in their stock market debut after being spun off from Vivendi SE. European airlines other travel-related stocks rise for a second day following the U.S. decision to soon allow entry to most foreign air travelers as long as they’re fully vaccinated against Covid-19; British Airways parent IAG soars as much as 6.9%, extending Monday’s 11% jump. Here are some of the biggest European movers today: Stagecoach shares jump as much as 24% after the company confirmed it is in takeover talks with peer National Express. Shell climbs as much as 4.4% after selling its Permian Basin assets to ConocoPhillips for $9.5 billion. Bechtle gains as much as 4.3% after UBS initiated coverage at buy. Husqvarna tumbles as much as 9% after the company said it is suing Briggs & Stratton in the U.S. for failing to deliver sufficient lawn mower engines for the 2022 season. Kingfisher slides as much as 6.4% after the DIY retailer posted 1H results and forecast higher profits this fiscal year. The mood was decidedly more sour earlier in the session, when Asian stocks fell for a second day amid continued concerns over China’s property sector, with Japan leading regional declines as the market reopened after a holiday. The MSCI Asia Pacific Index was down 0.5%, headed for its lowest close since Aug. 30, with Alibaba and SoftBank the biggest drags. China Evergrande Group slid deeper in equity and credit markets Tuesday after S&P said the developer is on the brink of default. Markets in China, Taiwan and South Korea were closed for holidays. Worries over contagion risk from the Chinese developer’s debt problems and Beijing’s ongoing crackdowns, combined with concern over Federal Reserve tapering, sent global stocks tumbling Monday. The MSCI All-Country World Index fell 1.6%, the most since July 19. Japan’s stocks joined the selloff Tuesday as investor concerns grew over China’s real-estate sector as well as Federal Reserve tapering, with the Nikkei 225 sliding 2.2% - its biggest drop in three months, catching up with losses in global peers after a holiday - after a four-week rally boosted by expectations for favorable economic policies from a new government. Electronics makers were the biggest drag on the Topix, which declined 1.7%. SoftBank Group and Fast Retailing were the largest contributors to a 2.2% loss in the Nikkei 225. Japanese stocks with high China exposure including Toto and Nippon Paint also dropped. “The outsized reaction in global markets may be a function of having too many uncertainties bunched into this period,” Eugene Leow, a macro strategist at DBS Bank Ltd., wrote in a note. “It probably does not help that risk taking (especially in equities) has gone on for an extended period and may be vulnerable to a correction.” “The proportion of Japan’s exports to China is greater than those to the U.S. or Europe, making it sensitive to any slowdown worries in the Chinese economy,” said Hideyuki Ishiguro, a senior strategist at Nomura Asset Management in Tokyo. “The stock market has yet to fully price in the possibility of a bankruptcy by Evergrande Group.” The Nikkei 225 has been the best-performing major stock gauge in the world this month, up 6.2%, buoyed by expectations for favorable policies from a new government and an inflow of foreign cash. The Topix is up 5.3% so far in September. In FX, the Bloomberg Dollar Spot Index inched lower and the greenback fell versus most of its Group-of-10 peers as a selloff in global stocks over the past two sessions abated; the euro hovered while commodity currencies led by the Norwegian krone were the best performers amid an advance in crude oil prices. Sweden’s krona was little changed after the Riksbank steered clear of signaling any post-pandemic tightening, as it remains unconvinced that a recent surge in inflation will last. The pound bucked a three-day losing streak as global risk appetite revived, while investors look to Thursday’s Bank of England meeting for policy clues. The yen erased earlier gains as signs that risk appetite is stabilizing damped demand for haven assets. At the same time, losses were capped due to uncertainty over China’s handling of the Evergrande debt crisis. In rates, Treasuries were lower, although off worst levels of the day as U.S. stock futures recover around half of Monday’s losses while European equities trade with a strong bid tone. Yields are cheaper by up to 2.5bp across long-end of the curve, steepening 5s30s spread by 1.2bp; 10-year yields around 1.3226%, cheaper by 1.5bp on the day, lagging bunds and gilts by 1bp-2bp. The long-end of the curve lags ahead of $24b 20-year bond reopening. Treasury will auction $24b 20-year bonds in first reopening at 1pm ET; WI yield ~1.82% is below auction stops since January and ~3bp richer than last month’s new-issue result In commodities, crude futures rose, with the front month WTI up 1.5% near $71.50. Brent stalls near $75. Spot gold trades a narrow range near $1,765/oz. Base metals are mostly in the green with LME aluminum the best performer Looking at the day ahead now, and data releases include US housing starts and building permits for August, along with the UK public finances for September. From central banks, we’ll hear from ECB Vice President de Guindos. Otherwise, the General Debate will begin at the UN General Assembly, and the OECD publishes their Interim Economic Outlook. Market Snapshot S&P 500 futures up 1.0% to 4,392.75 STOXX Europe 600 up 1.1% to 459.10 MXAP down 0.5% to 200.25 MXAPJ up 0.2% to 640.31 Nikkei down 2.2% to 29,839.71 Topix down 1.7% to 2,064.55 Hang Seng Index up 0.5% to 24,221.54 Shanghai Composite up 0.2% to 3,613.97 Sensex up 0.4% to 58,751.30 Australia S&P/ASX 200 up 0.4% to 7,273.83 Kospi up 0.3% to 3,140.51 Brent Futures up 1.6% to $75.13/bbl Gold spot down 0.1% to $1,761.68 U.S. Dollar Index little changed at 93.19 German 10Y yield fell 5.0 bps to -0.304% Euro little changed at $1.1729 Top Overnight News from Bloomberg Lael Brainard is a leading candidate to be the Federal Reserve’s banking watchdog and is also being discussed for more prominent Biden administration appointments, including to replace Fed chairman Jerome Powell and, potentially, for Treasury secretary if Janet Yellen leaves Federal Reserve Chair Jerome Powell will this week face the challenge of convincing investors that plans to scale back asset purchases aren’t a runway to raising interest rates for the first time since 2018 ECB Vice President Luis de Guindos says there is “good news” with respect to the euro-area recovery after a strong development in the second and third quarter The ECB is likely to continue purchasing junk-rated Greek sovereign debt even after the pandemic crisis has passed, according to Governing Council member and Greek central bank chief Yannis Stournaras U.K. government borrowing was well below official forecasts in the first five months of the fiscal year, providing a fillip for Chancellor of the Exchequer Rishi Sunak as he prepares for a review of tax and spending next month U.K. Business Secretary Kwasi Kwarteng warned the next few days will be challenging as the energy crisis deepens, and meat producers struggle with a crunch in carbon dioxide supplies The U.K.’s green bond debut broke demand records for the nation’s debt as investors leaped on the long-anticipated sterling asset. The nation is offering a green bond maturing in 2033 via banks on Tuesday at 7.5 basis points over the June 2032 gilt. It has not given an exact size target for the sale, which has attracted a record of more than 90 billion pounds ($123 billion) in orders Germany cut planned debt sales in the fourth quarter by 4 billion euros ($4.7 billion), suggesting the surge in borrowing triggered by the coronavirus pandemic is receding Contagion from China Evergrande Group has started to engulf even safer debt in Asia, sparking the worst sustained selloff of the securities since April. Premiums on Asian investment-grade dollar bonds widened 2-3 basis points Tuesday, according to credit traders, after a jump of 3.4 basis points on Monday Swiss National Bank policy makers watching the effects of negative interest rates on the economy are worrying about the real-estate bubble that their policy is helping to foster Global central banks need to set out clear strategies for coping with inflation risks as the world economy experiences faster-than-expected cost increases amid an uneven recovery from the pandemic, the OECD said A quick look at global markets courtesy of Newsquawk Asian equities traded cautiously following the recent downbeat global risk appetite due to Evergrande contagion concerns which resulted in the worst day for Wall Street since May, with the region also contending with holiday-thinned conditions due to the ongoing closures in China, South Korea and Taiwan. ASX 200 (+0.2%) was indecisive with a rebound in the mining-related sectors counterbalanced by underperformance in utilities, financials and tech, while there were also reports that the Byron Bay area in New South Wales will be subject to a seven-day lockdown from this evening. Nikkei 225 (-1.8%) was heavily pressured and relinquished the 30k status as it played catch up to the contagion downturn on return from the extended weekend with recent detrimental currency inflows also contributing to the losses for exporters. Hang Seng (-0.3%) was choppy amid the continued absence of mainland participants with markets second-guessing whether Chinese authorities will intervene in the event of an Evergrande collapse, while shares in the world’s most indebted developer fluctuated and wiped out an early rebound, although affiliate Evergrande Property Services and other property names fared better after Sun Hung Kai disputed reports of China pressuring Hong Kong developers and with Guangzhou R&F Properties boosted by reports major shareholders pledged funds in the Co. which is also selling key assets to Country Garden. Finally, 10yr JGBs were higher amid the underperformance in Japanese stocks and with the Japan Securities Dealers Association recently noting that global funds purchased the most ultra-long Japanese bonds since 2014, although upside was limited amid softer demand at the enhanced liquidity auction for 2yr-20yr maturities and with the BoJ kickstarting its two-day policy meeting. Top Asian News Richest Banker Says Evergrande Is China’s ‘Lehman Moment’ Hong Kong Tycoons, Casino Giants Find Respite in Stock Rebound Taliban Add More Male Ministers, Say Will Include Women Later Asian Stocks Drop to Lowest Level This Month; Japan Leads Losses European equities (Stoxx 600 +1.1%) trade on a firmer footing attempting to recoup some of yesterday’s losses with not much in the way of incremental newsflow driving the upside. Despite the attempt to claw back some of the prior session’s lost ground, the Stoxx 600 is still lower by around 1.6% on the week. The Asia-Pac session was one characterised by caution and regional market closures with China remaining away from market. Focus remains on whether Evergrande will meet USD 83mln in interest payments due on Thursday and what actions Chinese authorities could take to limit the contagion from the company in the event of further troubles. Stateside, futures are also on a firmer footing with some slight outperformance in the RTY (+1.2%) vs. peers (ES +0.8%). Again, there is not much in the way of fresh positivity driving the upside and instead gains are likely more a by-product of dip-buying; attention for the US is set to become increasingly geared towards tomorrow’s FOMC policy announcement. Sectors in Europe are firmer across the board with outperformance in Oil & Gas names amid a recovery in the crude complex and gains in Shell (+4.4%) after news that the Co. is to sell its Permian Basin assets to ConocoPhillips (COP) for USD 9.5bln in cash. Other outperforming sectors include Tech, Insurance and Basic Resources. IAG (+4.1%) and Deutsche Lufthansa (+3.8%) both sit at the top of the Stoxx 600 as the Co.’s continue to enjoy the fallout from yesterday’s decision by the US to allow travel from vaccinated EU and UK passengers. Swatch (-0.7%) is lagging in the luxury space following a downgrade at RBC, whilst data showed Swiss watch exports were +11.5% Y/Y in August (prev. 29.1%). Finally, National Express (+7.7%) is reportedly considering a takeover of Stagecoach (+21.4%), which is valued at around GBP 370mln. Top European News U.K. Warns of Challenging Few Days as Energy Crisis Deepens Germany Trims Planned Debt Sales as Pandemic Impact Recedes U.K.’s Green Bond Debut Draws Record Demand of $123 Billion Goldman Plans $1.5 Billion Petershill Partners IPO in London In FX, all the signs are constructive for a classic turnaround Tuesday when it comes to Loonie fortunes as broad risk sentiment improves markedly, WTI consolidates within a firm range around Usd 71/brl compared to yesterday’s sub-Usd 70 low and incoming results from Canada’s general election indicate victory for the incumbent Liberal party that will secure a 3rd term for PM Trudeau. Hence, it’s better the devil you know as such and Usd/Cad retreated further from its stop-induced spike to just pips short of 1.2900 to probe 1.2750 at one stage before bouncing ahead of new house price data for August. Conversely, the Swedish Krona seems somewhat reluctant to get carried away with the much better market mood after the latest Riksbank policy meeting only acknowledged significantly stronger than expected inflation data in passing, and the repo rate path remained rooted to zero percent for the full forecast horizon as a consequence. However, Eur/Sek has slipped back to test 10.1600 bids/support following an initial upturn to almost 10.1800, irrespective of a rise in unemployment. NOK/AUD/NZD - No such qualms for the Norwegian Crown as Brent hovers near the top of a Usd 75.18-74.20/brl band and the Norges Bank is widely, if not universally tipped to become the first major Central Bank to shift into tightening mode on Thursday, with Eur/Nok hugging the base of a 10.1700-10.2430 range. Elsewhere, the Aussie and Kiwi look relieved rather than rejuvenated in their own right given dovish RBA minutes, a deterioration in Westpac’s NZ consumer sentiment and near reversal in credit card spending from 6.9% y/y in July to -6.3% last month. Instead, Aud/Usd and Nzd/Usd have rebounded amidst the recovery in risk appetite that has undermined their US rival to top 0.7380 and 0.7050 respectively at best. GBP/CHF/EUR/JPY/DXY - Sterling is latching on to the ongoing Dollar retracement and more supportive backdrop elsewhere to pare losses under 1.3700, while the Franc continues its revival to 0.9250 or so and almost 1.0850 against the Euro even though the SNB is bound to check its stride at the upcoming policy review, and the single currency is also forming a firmer base above 1.1700 vs the Buck. Indeed, the collective reprieve in all components of the Greenback basket, bar the Yen on diminished safe-haven demand, has pushed the index down to 93.116 from 93.277 at the earlier apex, and Monday’s elevated 93.455 perch, while Usd/Jpy is straddling 109.50 and flanked by decent option expiry interest either side. On that note, 1.4 bn resides at the 109.00 strike and 1.1 bn between 109.60-70, while there is 1.6 bn in Usd/Cad bang on 1.2800. EM - Some respite across the board in wake of yesterday’s mauling at the hands of risk-off positioning in favour of the Usd, while the Czk has also been underpinned by more hawkish CNB commentary as Holub echoes the Governor by advocating a 50 bp hike at the end of September and a further 25-50 bp in November. In commodities, WTI and Brent are firmer in the European morning post gains in excess of 1.0%, though the benchmarks are off highs after an early foray saw Brent Nov’21 eclipse USD 75.00/bbl, for instance. While there has been newsflow for the complex, mainly from various energy ministers, there hasn’t been much explicitly for crude to change the dial; thus, the benchmarks are seemingly moving in tandem with broader risk sentiment (see equities). In terms of the energy commentary, the Qatar minister said they are not thinking of re-joining OPEC+ while the UAE minister spoke on the gas situation. On this, reports in Russian press suggests that Russia might allow Rosneft to supply 10bcm of gas to Europe per year under an agency agreement with Gazprom “as an experiment”, developments to this will be closely eyed for any indication that it could serve to ease the current gas situation. Looking ahead, we have the weekly private inventory report which is expected to post a headline draw of 2.4mln and draws, albeit of a smaller magnitude, are expected for distillate and gasoline as well. Moving to metals, spot gold is marginally firmer while silver outperforms with base-metals picking up across the board from the poor performance seen yesterday that, for instance, saw LME copper below the USD 9k mark. Note, the action is more of a steadying from yesterday’s downside performance than any notable upside, with the likes of copper well within Monday’s parameters. US Event Calendar 8:30am: Aug. Building Permits MoM, est. -1.8%, prior 2.6%, revised 2.3% 8:30am: Aug. Housing Starts MoM, est. 1.0%, prior -7.0% 8:30am: Aug. Building Permits, est. 1.6m, prior 1.64m, revised 1.63m 8:30am: Aug. Housing Starts, est. 1.55m, prior 1.53m 8:30am: 2Q Current Account Balance, est. -$190.8b, prior -$195.7b DB's Jim Reid concludes the overnight wrap Global markets slumped across the board yesterday in what was one of the worst days of the year as an array of concerns about the outlook gathered pace. The crisis at Evergrande and in the Chinese real estate sector was the catalyst most people were talking about, but truth be told, the market rout we’re seeing is reflecting a wider set of risks than just Chinese property, and comes after increasing questions have been asked about whether current valuations could still be justified, with talk of a potential correction picking up. Remember that 68% of respondents to my survey last week (link here) thought they’d be at least a 5% correction in equity markets before year end. So this has been front and centre of people’s mind even if the catalyst hasn’t been clear. We’ve all known about Evergrande’s woes and how big it was for a while but it wasn’t until Friday’s story of the Chinese regulatory crackdown extending into property that crystallised the story into having wider implications. As I noted in my chart of the day yesterday link here Chinese USD HY had been widening aggressively over the last couple of months but IG has been pretty rock solid. There were still no domestic signs of contagion by close of business Friday. However as it stands, there will likely be by the reopening post holidays tomorrow which reflects how quickly the story has evolved even without much new news. Before we get to the latest on this, note that we’ve still got a bumper couple of weeks on the calendar to get through, including the Fed decision tomorrow, which comes just as a potential government shutdown and debt ceiling fight are coming into view, alongside big debates on how much spending the Democrats will actually manage to pass. There has been some respite overnight with S&P 500 futures +0.58% higher and 10y UST yields up +1.5bps to 1.327%. Crude oil prices are also up c. 1%. On Evergrande, S&P Global Ratings has said that the company is on the brink of default and that it’s failure is unlikely to result in a scenario where China will be compelled to step in. The report added that they see China stepping in only if “there is a far-reaching contagion causing multiple major developers to fail and posing systemic risks to the economy.” The Hang Seng (-0.32%) is lower but the Hang Seng Properties index is up (+1.59%) and bouncing off the 5 plus year lows it hit yesterday. Elsewhere the ASX (+0.30%) and India’s Nifty (+0.35%) have also advanced. Chinese and South Korean markets are closed for a holiday but the Nikkei has reopened and is -1.80% and catching down to yesterday’s global move. Looking at yesterday’s moves in more depth, the gathering storm clouds saw the S&P 500 shed -1.70% in its worst day since May 12, with cyclical industries leading the declines and with just 10% of S&P 500 index members gaining. There was a late rally at the end of the US trading session that saw equity indices bounce off their lows, with the S&P 500 (-2.87%) and NASDAQ (-3.42%) both looking like they were going to register their worst days since October 2020 and late-February 2021 respectively. However, yesterday was still the 5th worst day for the S&P 500 in 2021. Reflecting the risk-off tone, small caps suffered in particular with the Russell 2000 falling -2.44%, whilst tech stocks were another underperformer as the NASDAQ lost -2.19% and the FANG+ index of 10 megacap tech firms saw an even bigger -3.16% decline. For Europe it was much the same story, with the STOXX 600 (-1.67%) and other bourses including the DAX (-2.31%) seeing significant losses amidst the cyclical underperformance. It was the STOXX 600’s worst performance since mid-July and the 6th worst day of the year overall. Unsurprisingly, there was also a significant spike in volatility, with the VIX index climbing +4.9pts to 25.7 – its highest closing level since mid-May – after trading above 28.0pts midday. In line with the broader risk-off move, especially sovereign bonds rallied strongly as investors downgraded their assessment of the economic outlook and moved to price out the chances of near-term rate hikes. By the close of trade, yields on 10yr Treasuries had fallen -5.1bps to 1.311%, with lower inflation breakevens (-4.1bps) leading the bulk of the declines. Meanwhile in Europe, yields on 10yr bunds (-4.0bps), OATs (-2.6bps) and BTPs (-0.9bps) similarly fell back, although there was a widening in spreads between core and periphery as investors turned more cautious. Elsewhere, commodities took a hit as concerns grew about the economic outlook, with Bloomberg’s Commodity Spot Index (-1.53%) losing ground for a third consecutive session. That said, European natural gas prices (+15.69%) were the massive exception once again, with the latest surge taking them above the peak from last Wednesday, and thus bringing the price gains since the start of August to +84.80%. Here in the UK, Business Secretary Kwarteng said that he didn’t expect an emergency regarding the energy supply, but also said that the government wouldn’t bail out failed companies. Meanwhile, EU transport and energy ministers are set to meet from tomorrow for an informal meeting, at which the massive spike in prices are likely to be discussed. Overnight, we have the first projections of the Canadian federal election with CBC News projecting that the Liberals will win enough seats to form a government for the third time albeit likely a minority government. With the counting still underway, Liberals are currently projected to win 156 seats while Conservatives are projected to win 120 seats. Both the parties are currently projected to win a seat less than last time. The Canadian dollar is up +0.44% overnight as the results remove some election uncertainty. Turning to the pandemic, the main news yesterday was that the US is set to relax its travel rules for foreign arrivals. President Biden announced the move yesterday, mandating that all adult visitors show proof of vaccination before entering the country. Airline stocks outperformed strongly in response, with the S&P 500 airlines (+1.55%) being one of the few industry groups that actually advanced yesterday. Otherwise, we heard from Pfizer and BioNTech that their vaccine trials on 5-11 year olds had successfully produced an antibody response among that age group. The dose was just a third of that used in those aged 12 and above, and they said they planned to share the data with regulators “as soon as possible”. Furthermore, they said that trials for the younger cohorts (2-5 and 6m-2) are expected as soon as Q4. In Germany, there are just 5 days left until the election now, and the last Insa poll before the vote showed a slight tightening in the race, with the centre-left SPD down a point to 25%, whilst the CDU/CSU bloc were up 1.5 points to 22%. Noticeably, that would also put the race back within the +/- 2.5% margin of error. The Greens were unchanged in third place on 15%. Staying with politics and shifting back to the US, there was news last night that Congressional Democratic leaders are looking to tie the suspension of the US debt ceiling vote to the spending bill that is due by the end of this month. If the spending bill is not enacted it would trigger a government shutdown, and if the debt ceiling is not raised it would cause defaults on federal payments as soon as October. Senate Majority Leader Schumer said the House will pass a spending bill that will fund the government through December 3rd and that the “legislation to avoid a government shutdown will also include a suspension of the debt limit through December 2022.” Republicans may balk at the second measure, given that it would take the issue off the table until after the 2022 midterm elections in November of that year. There wasn’t a great deal of data out yesterday, though German producer price inflation rose to +12.0% in August (vs. +11.1% expected), marking the fastest pace since December 1974. Separately in the US, the NAHB’s housing market index unexpectedly rose to 76 in September (vs. 75 expected), the first monthly increase since April. To the day ahead now, and data releases include US housing starts and building permits for August, along with the UK public finances for September. From central banks, we’ll hear from ECB Vice President de Guindos. Otherwise, the General Debate will begin at the UN General Assembly, and the OECD will be publishing their Interim Economic Outlook. Tyler Durden Tue, 09/21/2021 - 07:45.....»»

Category: blogSource: zerohedgeSep 21st, 2021