Talking Numbers - CNBC | Yahoo Finance
- Lawrence Lewitinn at Talking Numbers1 hr ago
With 2015 just around the corner, which sector ETF is poised to deliver the best returns in 2015?
One trader’s pick may be a surprise. For Gina Sanchez, founder of Chantico Global, the energy sector ETF (trading under the symbol XLE) is the best of the bunch, even though energy is by far the worst-performing S&P 500 sector this year.
So what makes the sector so attractive? Simple: It’s cheap.
As oil price plummeted around 50 percent from over the past six months, the XLE tumbled 20 percent from its record high set in June. Thus energy sector ETF now trades at a price-to-earnings multiple of about 13 times, making energy the cheapest of the 10 sectors making up the S&P 500. As a whole, the market index currently trades at 17.5 times earnings.
Clearly, many investors are wary about the ripple impacts of crumbling oil prices. Sanchez maintains the XLE is now oversold.
- Lawrence Lewitinn at Talking Numbers1 hr ago
Investors are not as bullish as they were just a month ago. And paradoxically, that could actually be good news for stocks.
A recent survey by the American Association of Individual Investors shows bullish sentiment at 38.74 percent, a little below average. But just a month ago, bullish sentiment was as high as 57.93 percent.
Many investors see such negative sentiment as a contrary indicator of where the market is headed. That is, when many investors are bullish, it is thought that the market will head lower; when many are bearish, stocks could be set to rally. After all, when an investor is bullish or bearish, they have probably already bought or sold. So bullish sentiment is thought to indicate more available sellers, while bearish sentiment indicates more available buyers.
And according to the indicator’s most recent reading, the prospects for stocks to keep rising have just improved.
“This is yet another reason to think that we’re probably going to see this rally continue into the new year,” said Gina Sanchez of Chantico Global.
- Amanda Diaz at Talking Numbers2 hrs ago
Shares of UPS are sitting at all-time highs as the company sets out to deliver an estimated 34 million packages on Monday — the largest total volume on record for a single day. And the package and delivery provider has everything to prove to both investors and consumers following last year’s fiasco, where millions of packages arrived late for Christmas, causing the stock to tumble nearly 10 percent in January.
So, will UPS deliver this holiday season?
“I think it’s important to discern between [UPS] as a company and a stock,” said Marc Lichtenfeld of The Oxford Club. “I love UPS as a company, but I’m less enthusiastic about the stock.”
- Lawrence Lewitinn at Talking Numbers1 day ago
Even the best investors are losing money on crude.
Carl Icahn and John Paulson are among the many 10-figure names that lost millions of dollars owning energy-related stocks as oil plummeted, according to The Wall Street Journal. In the last six months, the price of crude dropped 47 percent, taking with it energy stocks. The ETF tracking the sector (trading under the ticker symbol XLE) fell 21 percent during that time period.
And while the XLE rallied 7 percent last week, anyone hoping a turnaround is underway in the energy sector may be sorely mistaken, according to some traders.
“What’s happening right now is just a very brief pause,” said Gina Sanchez, founder of Chantico Global.
“The Saudi government is probably willing to continue to dip into their reserves for at least a year,” she said. “I don’t think that necessarily shakes the shale players out; I think they’ll continue to run even at profitable levels. But it does mean the XLE is in for some more pain if that scenario plays out.”
The technicals are also showing bad news ahead for the energy sector, according to the chart work of Steven Pytlar, chief equity strategist at Prime Executions.
- Lawrence Lewitinn at Talking Numbers1 day ago
Stocks remain near record highs and the S&P 500 is up 12 percent on the year. So why do we feel so poor?
According to data gathered by Tom Lee at Fundstrat, a whopping 71 percent of active fund managers are trailing their benchmarks. That would be the worst since 1998 and go a long way to explaining why stocks have rallied so hard in the waning days of 2014.
“There is a significant amount of this rally that is a bit of catch-up,” said Gina Sanchez, founder of Chantico Global. “A lot of fund manager have just been decimated this year and this is their last chance.”
It’s worth noting that the last time investors trailed the market so badly in 1998, stocks enjoyed a similar year-end rally and finished the year with a 27 percent return. It appears history is repeating itself and investors don’t want to miss out.
“Any reason that the market has to rally, it’s definitely taking it,” said Sanchez , a CNBC contributor. “It could actually continue to go for a while.”
The technicals are also bullish on the S&P 500, based on the chart work of Steven Pytlar, chief equity strategist at Prime Executions.
- Lawrence Lewitinn at Talking Numbers3 days ago
Gold bugs simply can’t catch a break.
Despite a full-blown currency crisis in Russia and increasingly volatile markets in the U.S., the price of gold has barely budged.
The yellow metal has been about flat in the last 30 days and remains close to the $1,200 per ounce level. If it closed there, gold would be looking at a slight loss on the year, which would be its first back-to-back yearly loss since 1997.
What’s keeping worried money away from buying gold? Ironically, the turmoil in Russia, which should be helping gold, could in fact be hurting it.
“There is concern that Russia—one of the things that should be driving gold up—is in fact really hurting to defend its currency,” said Gina Sanchez, founder of Chantico Global and a CNBC contributor. “If they start to sell their gold reserves … the problems in Russia could lead to more depression in the gold price.”
In other words, some gold traders fear Russia, one of the world’s top gold producers, may decide to sell some of its horde to buy rubles in order to prop up the currency.
- Lawrence Lewitinn at Talking Numbers4 days ago
MGM Resorts’ miserable losing streak has finally come to an end, at least for one day. And if one technician’s charts are correct, the stock could be a winning short-term bet.
Until Thursday, investors in the casino stock were dealt a losing hand every single trading day this month. Despite its latest 4 percent rebound, MGM shares still remain off by 15 percent since the month began. That’s when China’s gambling mecca Macau reported a 20 percent decline in November revenues compared to last year. About a third of MGM’s revenues come from its Macau operations.
Two factors are cutting into Macau’s gaming revenues as a whole—Beijing’s crackdown on corruption and uncertainty in emerging markets. That means trouble for MGM, said Gina Sanchez, founder of Chantico Global.
“MGM’s story in particular is very specific to what’s happening in Macau,” said Sanchez, a CNBC contributor. “This crackdown is not over. … You do have to be a little careful because [MGM’s] revenues are going to be hurt going forward.”
- Amanda Diaz at Talking Numbers4 days ago
Could the end of the epic bond rally be afoot?
U.S. treasury yields rose along with the broader market Thursday following Wednesday’s Fed announcement that suggested interest rates could begin to rise in the next year. The yield on the U.S. 10-year hit 2.2 percent during Thursday’s trading, the highest level in more than a week.
Now, bonds have been the surprising trade of 2014. The end of the Fed’s stimulus program was supposed to lead to higher rates, but the exact opposite has happened: the yield on the 10-year has fallen from 3 percent in January to 2.2 percent. Yields fall as bond prices rise, and U.S. treasurys have benefited from low rates abroad. The yield on the 10-year German bond is 0.6 percent, and that has helped anchor rates here, but some see more pain to come in the bond market.
“We think by the end of the year we could be another 5 to 10 basis points higher on 10-year yields,” said Ira Jersey, director of U.S. interest rate strategy at Credit Suisse.
- Lawrence Lewitinn at Talking Numbers5 days ago
You might think that falling oil prices are good news for transportation stocks. This makes sense, given that companies in the sector tend to use a lot of fuel. And indeed, as crude oil has plunged this year, the Dow Jones transportation average has performed nearly twice as well as the market this year.
But FedEx’s earnings report indicates that the bulls may be getting a bit ahead of themselves. And that could put high-flying transport stocks in jeopardy.
One of the biggest components in the Dow Jones transportation average, FedEx slid nearly 4 percent on Wednesday, after the company missed earnings estimates. Perhaps more significantly, the shipping giant failed to boost its guidance for future quarters, even though many had predicted it would due to falling fuel costs. This could indicate that low oil prices won’t prove to be quite the boon that some have anticipated. And indeed, even as the S&P 500 rose 2 percent on Wednesday, UPS dropped 1 percent alongside its competitor.
For one portfolio manager, the time has come to take profits in transport stocks, which are up nearly 15 percent since the market’s October low.
- Amanda Diaz at Talking Numbers5 days ago
The hottest trade of the year is suddenly coming under pressure.
The U.S. dollar, which tracks the dollar versus a basket of other currencies, has fallen about 1 percent in the past five trading sessions, as investors speculate on what Fed Chair Janet Yellen will say in Wednesday’s last 2014 F ed announcement.
But according to one currency expert, any pullback in the index, which has rallied 10 percent since January, should be seen as a buying opportunity heading into next year.
“ I think 2015 is going to be a great year for the dollar,” said Kathy Lien of BK Asset Management. “After [ Wednesday’s ] Fed announcement, I expect to see further profit - taking in the dollar [into year-end],” she added. “But I would look at that as an opportunity (to) buy at lower levels for a stronger rally in 2015.”
Lien added that monetary policies are going to drift further next year, and the easing and tightening in other parts of the world will make the dollar more attractive.
According to Craig Johnson of Piper Jaffray, the dollar is pushing up against critical resistance.