Archive for September, 2016

Week of Sept 23 2016 Weekly Recap & The Week Ahead

Monday, September 26th, 2016

“A person who never made a mistake never tried anything new.” — Albert Einstein

1. OPEC and Non-OPEC Producers Are Close to Reaching an Output Deal — OPEC and non-OPEC producers are close to reaching an output stabilizing deal, Venezuelan President Nicolas Maduro declared, a day after Iran welcomed any move aimed at market stability. OPEC members may even call an extraordinary meeting to discuss oil prices if they reach consensus at an informal gathering in Algiers this month, OPEC Secretary-General Mohammed Barkindo said during a visit to Algeria.
2. U.K. Prime Minister Theresa May Visits Wall Street Over Brexit — UL Prime Minister May landed in New York to consult with some of America’s largest firms over how her country should proceed with Brexit. The prime minister held two gatherings: a roundtable discussion with big investors in the U.K. including Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS), BlackRock (NYSE:BLK), IBM, and Amazon (NASDAQ:AMZN). She then hosted a reception for about 60 American executives, as well as British businesses that invest in the U.S.
3. S&P Real Estate Sector Draws Interest — the official launch of the S&P 500 real estate sector – the first subdivision to be added since 1999. This sector is made up of 28 components. Below is a chart of the new sector courtesy of WSJ.

4. FOMC Sept Meeting — the Federal Reserve kept interest rates unchanged, but Chairwoman Janet Yellen said one increase is “appropriate” this year barring any major new risks to the economy. Janet Yellen gave a fairly strong indication that a hike will happen before 2016 is over. She said the labor market is strengthening and “risks to the outlook have become roughly balanced.” The FOMC has two more meetings — in November, shortly before the presidential election, and December, where Yellen gives her final post-meeting news conference of the year.
5. AAII sentiment survey — according to this week’s sentiment survey, bullish sentiment fell to 24.83% down from 27.94%. That’s the lowest weekly reading since late June, the 47th straight week that bullish sentiment was below 40%, and the 81st time in the last 82 weeks that we have seen sub-40% readings. Charts below courtesy of BIG.

Bearish sentiment also increased from 35.92% up to 38.28%. This is the first week that bearish sentiment has been higher than both bullish and neutral sentiment as well as the highest weekly reading since the February market lows.

6. Leon Cooperman, legendary trader, Indicted by the SEC on insider trading charges –Billionaire investor Leon Cooperman said he will fight the SEC’s insider trading charges against him after the agency accused his hedge fund, Omega Advisors, of trading Atlas Pipeline Partners (now part of NGLS) on private information six years ago.

The week ahead — Economic data from Econoday.com:

Week of Sept 16 2016 Weekly Recap & The Week Ahead

Monday, September 19th, 2016

“OCTOBER: This is one of the peculiarly dangerous months to speculate in stocks. The other are July, January, September, April, November, May, March, June, December, August, and February.” — Mark Twain

1. NYSE Set to Eliminate ‘Rule 48’ — the New York Stock Exchange (NYSE:ICE) is instituting new procedures today that would eliminate “Rule 48,” which allows market makers to delay opening a stock when markets are volatile. Under the changes, NYSE (NYSE:ICE) pre-open price indications will be simplified and adjust for volatility. Values will also be published on both proprietary and other feeds under all market conditions.
2. IEA Cuts Global Oil Demand Forecast — according to the International Energy Agency, global oil demand growth is slowing at a faster pace than first thought. “For 2016, a gain of 1.3M bpd is expected,” the IEA said in its latest market update, equating to a downgrade of 100K bpd from its previous forecast. The prediction will be worrying for oil markets at a time when a delicate rebalancing of supply and demand was thought to be taking place.
3. Walmart Working On a Self-Driving Shopping Cart — Walmart (WMT) claimed that customers would be able to hail an Uber (Private:UBER) like shopping cart that possibly through a smartphone app. Not only has the retailer filed a patent for a cart that has a motor and video cameras, but it would be able to return itself from customers’ cars to the store. The system may also help Walmart (NYSE:WMT) manage inventory by scanning store shelves to ensure products are there.
4. Initial Quantities Of iPhone 7 Plus Sold Out — Apple has confirmed initial quantities of the new iPhone 7 Plus have sold out in all colors. The brand new jet black shade of the smaller iPhone 7 has also sold out around the world. Speculation over strong sales out of the gate and impressive initial reviews sent shares in the tech titan sharply higher.
5. Federal Prosecutors In Early Stages of Wells Fargo(NYSE:WFC) Probe — Federal prosecutors are in the early stages of a Wells Fargo (NYSE:WFC) investigation, WSJ reports. The probe is focusing on figuring out whether higher level executives directed employees to fraudulently open accounts or if poorly-performing employees were just “trying to save their jobs.” Whether prosecutors decide they have a case, or whether that may be criminal or civil is still a ways off.
6. Tesla Using Its Own Vision System Replacing Mobileye (MBLY)— Tesla (NASDAQ:TSLA) will be using its own vision system in upcoming versions of Autopilot. TSLA accused Mobileye (MBLY) “attempted to force Tesla to discontinue this development, pay them more and use their products in future hardware,” .

The week ahead — Economic data from Econoday.com:

Week of Sept 9 2016 Weekly Recap & The Week Ahead

Monday, September 12th, 2016

“Move on, understand what happened in the past but do not have an emotional attachment to it.” — unknown

1. G20 Meeting Communique From China — the heads of the world’s top economies declared in a joint communique following a summit in Hangzhou, China that “We are determined to use all policy tools – monetary, fiscal and structural – individually and collectively to achieve our goal of strong, sustainable, balanced and inclusive growth,”. G20 leaders also reiterated their support for “international tax cooperation, a transparent financial system, environmentally sustainable growth strategies, energy collaboration, and opposition to protectionism on trade and investment in all its forms.”
2. Chinese Trade Improves in August — China logged stronger-than-expected trade data in August as imports unexpectedly climbed for the first time in nearly two years and the slump in exports abated. In U.S. dollar terms, imports rose 1.5% compared to a year ago, a significant improvement from the 12.5% decline in July, while exports fell 2.8% on-year, following last month’s 4.4% drop. That brought a trade surplus to a seven-month high of $52.05B, slightly below July’s $52.31B.
3. Senate Panel To Probe EpiPen Pricing — the U.S. Senate’s permanent subcommittee on investigations will be the next to probe Mylan’s (NASDAQ:MYL) pricing of the EpiPen, describing the review as a “preliminary inquiry.” Despite heat over the allergy auto-injector’s cost, EpiPen sales recorded a 32% increase in the first three weeks of August compared to the same period of 2015.
4. North Korea Conducts Fifth Nuclear Test — just hours after multiple global agencies detected a magnitude 5.3 earthquake near North Korea’s nuclear test site, Pyongyang declared it had conducted its fifth nuclear test and was now able to produce miniaturized nuclear warheads. South Korea’s vice finance minister said the government will closely monitor financial markets and guard against geopolitical risks linked to the North’s actions.
5. American Association of Individual Investors (AAII) Latest Sentiment Survey — In the latest survey from AAII, bullish sentiment increased from 28.6% up to 29.75%. This week’s sub-30 reading also represents the 45th straight week where bullish sentiment was under 40%. below 30%, it is generally a sign of pessimism.

The latest survey also showed that bearish sentiment declined from 31.52% to 28.48%. With that decline, bearish sentiment is now once again lower than bullish sentiment for the first time in three weeks.

The week ahead — Economic data from Econoday.com:

Week of Aug 26 2016 Weekly Recap & The Week Ahead

Thursday, September 8th, 2016

Two rules for investing/trading:
Rule number one : most things will prove to be cyclical
Rule number two : some of the greatest opportunities for gain and loss come when other people forget rule number one
— Howard Marks

1. US New Home Sales Race To Near 9-Year High in July — the Commerce Department reported new home sales surged 12.4 percent to a seasonally adjusted annual rate of 654,000 units last month, the highest level since October 2007. Residential construction was a minor drag on economic growth in the second quarter. Housing market strength, marked by rising home values which are boosting household wealth, is helping to buoy consumer spending, cushioning the blow on the economy from a downturn in business spending as well an inventory correction.
2. Delphi Automotive and Mobileye to Partner In Self-Driving Car Push — key driving partnership between Delphi Automotive (NYSE:DLPH) and Mobileye (NYSE:MBLY) to be a leader in Self-Driving Car. The two auto suppliers want to pool investment and execution risk amid the rapidly developing self-driving car push in the industry.
3. Senate Judiciary Committee To Hold Hearing on Ag-Chemical Merger Deals — the U.S. Senate Judiciary Committee plans to hold a hearing in late September to discuss the merger of Dow Chemical (NYSE:DOW) and DuPont (NYSE:DD), and ChemChina’s purchase of Syngenta (NYSE:SYT). Committee Chair Senator Grassley of Iowa has expressed concern that the deals would result in farmers paying more for seeds, pesticides and herbicides, and reduce the companies’ incentive to innovate. However, the committee has no formal say over whether the deals can go forward; the Justice Department is reviewing the Dow-DuPont merger, while the FTC is looking at ChemChina’s purchase of Syngenta.
4. House Republican To Propose New Tax Rule for Internet Commerce — a leading House Republican plans to introduce a proposal over how to tax inter-state Internet transactions. Bob Goodlatte wants the rules affecting a transaction to be based on where the retailer is located but the tax rate to be set by the consumer’s state. For example, an Ohio company selling a pair of trousers to a buyer in Maryland would use Ohio’s regulations for taxing clothing and Maryland’s tax rate. This contrasts with the current rules in which a sale is taxed only if the seller has a physical presence in the shopper’s state.
5. Fed’s Yellen Sees Stronger Case for Interest-Rate Rise — Federal Reserve Chairwoman Janet Yellen said the case for another interest-rate hike is strengthening, sending a strong signal the U.S. central bank is preparing to increase rates as soon as next month. She stated “In light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal-funds rate has strengthened in recent months,”.

The week ahead — Economic data from Econoday.com:

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