Headline and analysis round-up
Markets turning a bit nasty, stocks selling off for the first time in the last two and half months, since stocks put in a panicky capitulation bottom. Since those panicky February lows, the markets spent the next ten weeks going practically straight up. Along the way, most money managers found themselves having to chase the same stocks they sold in a panic as they climbed higher. Energy and energy stocks went through a capitulation bottom, at least a temporary bottom a few weeks ago too. There’s been a turnover in energy stock shareholders and new shareholders now have some cushion from the lows.
Let’s run through some of these themes and others that every investor should be looking at into the weekend.
How Earnings Expectations Are Changing – Earnings seasons often come with themes — sometimes most any report gets bought, sometimes most any report gets sold and sometimes strong reports pop while bad reports tank, and other times it’s just random. So far this earnings season most reports have been a bit soft and have been sold as evidenced by Google, Apple, Netflix, Chipotle, Twitter, Buffalo Wild Wings and others that have tanked after their reports. Amazon and Facebook are the obvious exceptions to this current earnings seasons theme. In the article, Brian Gilmartin gives very insightful earnings season round up including basically everything you need to know about corporate earnings so far this earnings season.
Wall Street thinks Facebook is perfect – This headline about Facebook being perfect makes me want to at least trim some! Did you know that if Facebook rallies another 15% that Facebook would be worth more than Microsoft?
This Indicator Is Still Flashing A Bear Market Warning – Markets turning a bit nasty, stocks selling off. Apple at new 52-week lows and Facebook couldn’t hold above its all-time high levels from Thursday morning after its big earnings report. Is the seasonal top in?
Carl Icahn dumps Apple stake amid China concerns – I’d been saying all year that I thought Apple could hit $130 in 2016, and now I sorta feel like a sellside analyst lowering my price target, but I do think $120 is probably the upside potential for Apple for the next 9 months unless the iPhone 7 comes out and it’s amazing or something. The iPhone 7 will need to be released this year and will need to be innovative enough to compel yet another new round of upgrades for Apple to rally back towards its highs. On other hand, I’m not sure just how big the downside risk really is. $70s is being thrown around as a potential price target on here and elsewhere I’ve seen and that price would make the stock a screaming buy if it got there, probably even if the iPhone 7 sucks.
Why vision is what really matters at Amazon – AWS, Echo, Prime, Prime Video, and Amazon’s other platforms would seem to indicate that this year’s numbers aren’t indicative of what the company’s revenue and earnings profile will look like in 2025.
Profits are down at ExxonMobil, but don’t cry for the CEO – If I had to own a couple energy names, the two companies with the strongest positions and balance sheets in the industry are probably Chevron and Exxon. I don’t have to own energy stocks though and I only own one in my own portfolio presently.
GDP disappoints, BOJ surprise – I’ve been vocal that I think the broader economy/prices/currency wars around the world will drive the FED to implement yet more forms of corporate/bank-friendly QE and the reported US GDP numbers this week fit that vision well. With Japan’s central bank already using unprecedented forms of negative interest rates for just a few months now, the idea of more central bank tinkering over there probably is even more foolish. At any rate, the strong Yen and weak dollar also play well into my thesis of the US central bank reversing course and moving to an easing cycle. Finally, a 5% pullback would get all of Robert Marcin’s free-market-hypocrites out in full-force and voila — the Fed’s got cover to cut/QE.
Have a great weekend.
