|Day's Range||2.7900 - 3.0200|
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In Part 3 (the final segment) in the series, I discuss a case that symbolized nearly all of the flawed thinking during the 2007 to 2009 market crash Continue reading...
Volatility is elevated as the S&P 500 stalls near historic highs, while the software industry is oddly not participating in the recent rebound.
It was another good day in the stock market today, as equities pushed higher in Friday morning trade. It's not hard to see that bulls are getting tired though, as equities faded off their opening highs.The SPDR S&P 500 ETF (NYSEARCA:SPY) fell 0.1%, the SPDR Dow Jones Industrial Average (NYSEARCA:DIA) rallied 0.1% and the PowerShares QQQ ETF (NASDAQ:QQQ) dropped 0.4%.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe rebound in equities has been a continuous story line for investors over the past two weeks. And so have the disastrous developments of the WeWork IPO. What's Up With WeWork?WeWork is a real estate company that provides shared office spaces for startups and other businesses.The idea of WeWork is an excellent alternative to building and office leases, providing startups, potential clients and teams a rich collaborative environment. But that's not how investors are looking at it. In short, they don't trust WeWork.Earlier this year, SoftBank (OTCMKTS:SFTBY) threw money at WeWork, valuing the cash-burning entity at $47 billion after it invested $2 billion. Now? Reports of a continually lower IPO valuation keep circulating. The latest calls for a $10 billion IPO valuation -- a whopping 78% reduction from the valuation it garnered when SoftBank invested -- and that's after SoftBank said the company should shelve its IPO plans.It's just the latest example of another private-equity unicorn garnering a valuation way ahead of its skis and paying the piper in the public market. Uber (NYSE:UBER) and Lyft (NASDAQ:LYFT) paid the price right out the gate, and while it took some time, Slack (NYSE:WORK) is suffering too.Accord to WeWork's U.S. Securities and Exchange Commission Form S-1, the company reported sales of $436 million in 2016, $886 million in 2017 and $1.8 billion in 2018. That's pretty solid growth. However, operating losses have exploded. WeWork had operating losses of $396 million in 2016, $931.8 million in 2017 and $1.7 billion last year.In the first six month of 2019, WeWork has revenue of $1.5 billion and operating losses of $1.4 billion. How is this model sustainable? Further, its structure couldn't be more complicated. Have a look (again, from the S-1):Finally, co-founder and CEO Adam Neumann raises some red flags. For instance, by buying properties and then leasing them back to his own company. Or Neumann being a managing member of an LLC that owned the "We" trademark that then sold said trademark to WeWork when it rebranded as The We Company for a cool $5.9 million.I don't know Neumann personally -- obviously -- but what kind of founder-CEO does this type of stuff? There are 10 pages of disclosures on Neumann in the S-1, who has voting control via a three-class share structure. In June, three former executives launched a lawsuit against We ranging from sexual harassment to age discrimination.Lastly, We saw its lease obligations jump from $34 billion to $47 billion in the first six months of 2019. How's the company going to cover those obligations as its operating losses swell and without free cash flow? What's it going to do when -- not if -- a recession strikes, either in the U.S. or globally, or both?These are serious questions that need serious answers. I'm not trying to dog on We, but man, you do not see a pre-IPO show turn into a circus act with a near-80% haircut in valuation without there being some serious flaws.If this company ultimately goes public, be sure to do your due diligence. Movers in the Stock Market TodayOne IPO that's not disappointing investors -- like SmileDirectClub (NASDAQ:SDC) on Thursday -- is Cloudflare (NYSE:NET). Shares jumped 20% on the day, closing at $18. Despite pricing at $15 per share, well above its original $12-$14 range, shares still found a bevy of buyers on Friday.Apple (NASDAQ:AAPL) stock sank 1.9% on Friday, after enjoying strong gains for most of the week. Despite rallying after unveiling its new iPhone, streaming plans and other products on Tuesday, not everyone is on board.One Rosenblatt analyst sees lower demand for the iPhone 11 and argues that sales could disappoint. He has a "sell" rating and Street-low $150 price target. Another analyst from Goldman Sachs says that Apple's plan to offer one year of Apple TV+ for free when customers purchase certain new devices could have a "material negative impact."Finally, one last analyst take is on Disney (NYSE:DIS). Remember, Disney, Netflix (NASDAQ:NFLX) and Roku (NASDAQ:ROKU) all fell when Apple announced its new streaming product.However, analysts at Cowen noted that Disney's strength at the box office this year could make for a very difficult comp next year. To be honest, it's hard to argue that point, but Cowen must still be optimistic, maintaining a $154 price target.Next week we'll hear from the Federal Reserve. Not more than a few weeks ago, the market was pricing in a 100% probability of at least one rate cut. Even on Thursday, the odds stood at about an 89% probability of a rate cut and an 11% chance of no cut. On Friday, the odds of no cut jumped to 20.4%. Hmm.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long DIS and AAPL. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Big IPO Stocks From 2019 to Watch * 7 Discount Retail Stocks to Buy for a Recession * 7 Stocks to Buy Benefiting From Millennial Money The post Stock Market Today: Donat Get Me Started on the WeWork IPO appeared first on InvestorPlace.
U.S. markets and stock exchange traded funds meandered on Friday as optimism over progress in the trade war with China was pared down by lingering uncertainty over global growth. On Friday, the SPDR Dow Jones Industrial Average ETF (DIA) rose 0.2% and SPDR S&P 500 ETF (SPY) was flat. Global equities have been pushing higher this week on hopes of easing trade tensions between the U.S. and China, along with expectations of looser monetary policies from global central banks, recovering some of the lost ground experienced over a volatile August.
The federal budget deficit has topped $1 trillion for the first time in seven years, the Treasury Department said. Expenses in August eclipsed incoming revenue by $214 billion this month, taking the government’s total shortfall to just under $1.07 trillion, the government reported Thursday. The growing deficit has also pushed up the national debt, the amount owed by the country to creditors to cover the difference between revenue and expenses.
Debt owed by governments, businesses, and households has shot up by almost 50% worldwide since the financial crisis, far outpacing economic growth.
The S&P 500 hesitated at historic highs. Micro caps have surged since September's start, with Chef's Warehouse breaking to new highs.
U.S. markets and stock exchange traded funds rallied Thursday after the European Central Bank revealed its intent to support the Eurozone economy and positive developments on U.S.-China trade. On Thursday, ...
The SPDR S&P 500 (NYSEARCA:SPY) hit new all-time highs on Thursday. Who would have predicted that for the stock market today?Not many were looking for such a robust rally to take place over the past few trading sessions. But InvestorPlace readers were ready. They knew that the stock market was trading in a well-defined range throughout the month of August and they knew when that range resolved to the upside.InvestorPlace - Stock Market News, Stock Advice & Trading TipsOnce resistance gave way and we saw follow through from the bulls, that's when it was clear new highs were possible. In fact, we wrote: "Above resistance could send the S&P 500 back to 3,000, while a move below support likely brings up a test of the 200-day moving average."So what's causing this rally anyway? Markets liked the de-escalating tone between China and the U.S., even though there some reports say the trade war will not likely be resolved any time soon. More Quantitative Easing, Please?For those looking for more quantitative easing from the Federal Reserve, don't hold your breath. The Fed is scheduled to make its rate decision next week on Wednesday, Sept. 18. As it currently stands, the Fed Funds Rate is pricing in an 88.8% probability of a 25 basis point cut next week. The other 11.2% probability has the Fed keeping rates unchanged.Put simply, the U.S. is not in the economic position -- either with low growth or negative interest rates -- to warrant more stimulus. But the European Union is. * 10 Battered Tech Stocks to Buy Now The European Central Bank announced a 10-basis-point cut in its deposit rate to -0.5%, in-line with expectations. The ECB also announced that it will restart its QE program to the tune of $20 billion per month beginning Nov. 1. While ECB president Mario Draghi says there's only a low chance chance of an E.U. recession, those odds have increased.QE should be a boost, but it's concerning that it's needed after a near-decade of various policies. Movers in the Stock Market TodayIt was an exciting day in the stock market today, if not just because equities are flirting with their all-time highs. However, not all assets are moving favorably.While gold prices -- and the SPDR Gold Shares (NYSEARCA:GLD) -- closed higher on the day, GLD finished well off its morning highs. The can be said for bonds too, via the iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT). The fall in bonds helped pave the way for bank stocks to continue their rally on Thursday, even as they approach resistance.The Top Stock Trades column took a closer look at the bank stocks earlier today.What else was moving?Aurora Cannabis (NYSE:ACB) fell roughly 10% and hovered near its session lows in the stock market today. The decline came after the company reported its quarterly results, missing revenue expectations and showing margin pressure. The woes of the cannabis space continue.Shares of General Electric (NYSE:GE) fell 1.2%, but Baker Hughes (NYSE:BHGE) was making waves after the former became a seller of the latter.BHGE opened notably lower on the day and fell to $21.36. However, it finished higher by 1.5% at $22.63 despite GE announcing it will cut its stake from 50.3% to roughly 39.5% as it looks to raise capital.The IPO market remains a mixed bag, with the latest shake-up coming from SmileDirectClub (NASDAQ:SDC). Shares priced at $23, above the $19-$22 range. But that didn't please investors, as shares tumbled 27.5% in their debut. Ouch. Heard on the StreetShares of Activision Blizzard (NASDAQ:ATVI) got off to a hot start in the stock market today. However, the stock only managed to climb 1% by the time the market closed. That's despite Nomura analysts upgrading the stock to "buy" and raising their price target from $49 all the way to $64. The target implies more than 16% upside from Wednesday's closing price.Wells Fargo analysts are ringing the bell on Caterpillar (NYSE:CAT) and Deere (NYSE:DE). They downgraded both stocks from "outperform" to "market perform," assigning price targets of $170 and $143, respectively.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Battered Tech Stocks to Buy Now * 7 Strong-Buy Stocks Hedge Funds Are Buying Now * The 7 Best Penny Stocks to Buy The post Stock Market Today: Should Investors Expect More Quantitative Easing?Â appeared first on InvestorPlace.
Below is a closer look at the Goldman's 5 key takeaways on this trend. While the drop in momentum stocks over the past two weeks was sharp, it simply unwound a robust rally that propelled these stocks upward by 17% for the month through Aug. 27. "The reversal in Momentum captured sharp rotations in other equity factors and sectors that had become increasingly correlated with each other," the report notes. Growth stocks and low volatility stocks also fell, while small caps and value stocks outperformed the broader market.