Well that escalated quickly… Just 4 months after its magnificently-lauded IPO – proving to every Bob, Dick, and Mary on business media that this time is different and everything’s awesome – Snap has collapsed back to below its IPO price and down 42% from its post-IPO highs. SNAP IPO’d at $17 and opened at $24, trading up to $29.44. Today it traded down to $16.95… We are reminded of Dennis Gartman’s recent epic rant against the company he calls “a time sapping hobby; a diversion.” Finally, is there anything in the investment world less investable than SNAP? This is a company losing mi...
From a fundamental perspective, GBP/USD should be trading lower. Consistently softer UK data casts doubt on the hawkish comments from the Bank of England. Service, manufacturing and construction sector activity slowed in the June while industrial and manufacturing production turned negative. This along with a stronger pound in May caused the trade deficit to increase. The U.S. dollar should rise into and after Janet Yellen’s semi-annual testimony but traders should not diminish the significance of BoE’s hawkishness. Since their last monetary policy meeting, we’ve seen Bank of England Governor Carney join McCafferty, Haldane, Saunders...
There was an interesting article written recently by Barry Ritholtz who says that people are feeling cautious towards the market, so they are looking for technical reasons to support their caution. I kind of agreed with the article, but some of the market caution seems reasonable to me. For instance, John Murphy mentioned in his most recent article that we haven’t had a 5% correction in a really long time, and that we are overdue to have one. He showed this chart below as evidence. I don’t think this is an example of someone looking for a reason to be cautious. Murphy also mentioned that late summer is often when the market experi...
The second-quarter 2017 earnings season is in its initial stage with just 23 S&P 500 members or 4.6% of the index’s total membership reporting their quarterly results as of Jul 7, according to the latest Zacks Earnings Preview report. Per the Preview article, the trend this earnings season indicates that we may finally see back-to-back four quarters of earnings growth in the Technology sector, after several quarters of decline. The report projects that earnings for the sector will improve 10.1% from the year-ago period on 6% higher revenues. The strong growth projections may be mainly attributed to the growing adoption of cloud comput...
Remember what I wrote last night in “Why We’re Vulnerable: CTAs’ ‘Oversized Loss’ Betrays Extreme Positioning“? No? That’s ok. It was Sunday evening and you were probably drunk (I would have been too had I not almost drank myself to death last November). But long story short, that post (which you should read if you haven’t) took a look at the juxtaposition between positioning in the 2Y and positioning in the 10Y as delineated in the latest CFTC data. I also cited two new pieces from Deutsche Bank in which Francis Yared and Aleksandar Kocic talk CTAs and the potential for extreme positioning to act as a contrarian indicator. T...
The High Yield Dividend Champion Portfolio is a publicly tracked stock portfolio on Scott’s Investments. Its goal is to capture quality high yield stocks with a history of raising dividends. The screening process for this portfolio starts with the “Dividend Champions” as compiled by DRIP Investing. The list is comprised of stocks that have increased their dividend payout for at least 25 consecutive years. Stocks are then ranked on yield, P/E and 3 year dividend growth rate and assigned an overall rank. Stocks are sold on the re-balance date (generally around the 5th of the month) when they drop out of the top 15 (to limit turn...
The big news this week was the flash crash in silver late on 6 July. We will publish a separate forensic analysis of this, as there is a lot to say and see. It’s hard to tell—we don’t have the tools to measure such a thing—but it seems like the hype and aggression from the gold bugs and conspiracy theorists is reaching a fever pitch. For example, one high-profile commentator, whose reputation goes way beyond the world of gold, claimed that 1.8 million ounces of gold were sold in a few seconds on June 26. A contract is 100oz, so that means 18,000 contracts. Surprisingly (so often these guys are off by orders of magnitude), this is in...
Friday’s market rally following a strong jobs report pushed the major indices back into the green for week and kicked off a solid start to Q3. The Dow, Nasdaq and the S&P 500 were all up marginally, but the real market action is set to kick off later this week as earnings season is back! We get some lesser reports earlier in the week before the big bank results arrive on Friday. Citigroup (C), Wells Fargo (WFC), JPMorgan Chase (JPM) and PNC Bank (PNC) all report and will set the tone for the rest of the quarter. Citigroup and JPMorgan have delivered double digit returns for investors thus far in 2017 but Wells has only gained 2%. Keep a...
They do suck. I mean how many times can the bears possibly blow a sell-off that is handed to them on a silver platter. Consequently, sell-offs that appear to be substantial, like the one last Thursday, has become a green light to buy the dip. Sure you can have a few multi-day sell-offs but those usually entail declines that are fractional losses that add up to no more than two or three points combined. So those aren’t anything worth getting excited about. Don’t get me wrong, I’m no permabear, that can be clearly seen by my past performance that I have posted for basically eight years now, but I do recognize the huge ...
Gold is suffering its worst drawdown this year, and hedge funds are betting more losses are in store… but judging by the precious metals’ performance the last two times hedgies piled in like this, the ‘smart money’ may be about to get a nasty surprise… As Bloomberg notes, signs that global central banks, including the Federal Reserve, are moving closer to unwinding economic stimulus helped boost bearish bets on the metal to the highest in almost 18 months. Gold futures posted a fifth straight weekly loss on Friday, the longest stretch since December. We’ve seen this pattern before… Buy The Dip?...