|Day's Range||1.1200 - 1.2300|
U.S. stocks ended slightly higher while crude oil prices plunged nearly 6% at settlement after Saudi Arabia said it was on track to restore much of the oil production lost during a weekend attack on key facilities in the country’s oil infrastructure.
A narrow trading range combined with an increase in the volatility index as investors appear poised to move money from stocks to bonds.
It was another relatively quiet session in the stock market today. On Tuesday we saw the SPDR S&P 500 ETF (NYSEARCA:SPY) rally 0.3%, the SPDR Dow Jones Industrial Average (NYSEARCA:DIA) jump 0.2% and the PowerShares QQQ ETF (NASDAQ:QQQ) climb 0.5%.That's as investors try to get positioned ahead of the Federal Reserve's announcement on Wednesday. It doesn't help that there's a quadruple witching day this Friday, one of four throughout the year, as we roll into the fourth quarter.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Assets Moving Ahead of the FedWhile it's been a relatively calm Monday and Tuesday in the equity markets, the same cannot be said about financial markets over the past month.Earlier this month, we had the SPY, DIA and QQQ break out of their choppy trading ranges. Amid that breakout though, we had a deep correction in high-growth tech stocks like Roku (NASDAQ:ROKU), Alteryx (NYSE:AYX), The Trade Desk (NASDAQ:TTD), Veeva Systems (NYSE:VEEV) and many, many others.We recently caught a nice pullback both in gold and bonds after an absolutely explosive rally in the SPDR Gold Shares (NYSEARCA:GLD) and the iShares 20+ Treasury Bond ETF (NASDAQ:TLT). The latter's decline helped spring a potent rebound in bank stocks, by the way.Finally, how could we forget the move in crude oil. Following a drone strike in Saudi Arabia over the weekend, oil prices were skyrocketing. While they have come down off the highs, and with Saudi production expected to come fully back online in the coming weeks, crude is still up about 7.5% from its closing price last week.To say the Fed has a full plate is putting it lightly. What to Expect From the FedThere is now a greater chance of no rate cut on Wednesday than there is of a rate cut. This has not been the norm over the past few days or weeks, mind you.Currently, the Fed Funds futures are pricing in 52.7% probability the Fed does not raise interest rates tomorrow. The other 47.3% probability calls for a 25-basis point cut. Essentially, a coin flip. * 7 Momentum Stocks to Buy On the Dip Just a day ago, the figures stood at 37.7% probability of no cut and 62.3% chance of a cut. A week ago it was even more drastic. Participants were pricing in a greater than 92% chance the Fed cuts rates, with a less than 10% probability of no cut.Finally, a month ago, the market wasn't even pricing in the chances of no cut. Instead, it was expecting a cut of at least 25-basis points, while there was a 22.3% probability of a 50-basis point cut.Sorry for the deluge of statistics, but they underscore how much can change in a relatively short amount of time. It will be interesting to hear what Fed Chair Jerome Powell has to say about the economy and the recent fluctuations in various assets.With unemployment low and stocks near their highs, it's easy to make the case for "no cut." But if that's the course the Fed chooses, it will surely hear from a chorus of dovish detractors -- as well as President Donald Trump. Movers in the Stock Market TodayShopify (NYSE:SHOP) stock fell 2.7% after the company announced a 1.9 million share secondary offering. The deal is for Class A stock that priced at $317.50, raising just over $600 million for the company. The move comes as little surprise given that Shopify stock is still up roughly 140% in 2019 and after its recent $450 million acquisition.Following Disney's (NYSE:DIS) acquisition of Twenty-First Century Fox, the company is getting to work on its balance sheet. Disney is looking to deleverage a bit after digesting that big $71.3 billion deal, tendering more than $4.2 billion worth of notes. It increased its intended purchases as well.Micron (NASDAQ:MU) caught a price target boost from $55 to $65 at Cascend Securities. The analysts maintain a "buy" rating and believe MU has "good value" after evaluating the DRAM market. Shares ended the day higher by 1.4% at $50.84.Oh, and thank goodness the WeWork IPO is being shelved -- at least for a little while. We had some gripes about that one.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long ROKU and TTD. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Momentum Stocks to Buy On the Dip * 7 Dow Titans Breaking Higher * 5 Growth Stocks to Sell as Rates Move Higher The post Stock Market Today: What to Expect From the Federal Reserve appeared first on InvestorPlace.
Despite headline hysteria, many companies are reporting positive earnings. Co-CIO Francis Gannon explains how we’re investing during this time of two tales Continue reading...
Much of that advance has been led by momentum stocks, or stocks that investors have been bidding upwards precisely because they already were rising, thereby creating a self-reinforcing trend. Now, Morgan Stanley says these momentum stocks are stalling, which the firm says is an ominous warning sign of both a recession and major stock market declines ahead. "The last two times we've experienced a momentum breakdown this severe, it preceded or coincided with an economic recession," warns the U.S. equity strategy team at Morgan Stanley headed by Mike Wilson.
U.S. markets and stock ETFs retreated on a spike in risk-off sentiment, following the weekend attack on Saudi Arabia’s oil facilities that sent crude price surging, but strength in the energy sector helped offset some of the broader selling.
Modern markets have evolved into vastly complicated organisms with thousands of data points competing for attention. It's our job to transform this information flood into an efficient set of charts, tickers, indexes and indicators that support our profit objectives. Part of this task requires observation of broad market forces, while the balance demands a narrow focus on specific securities used to execute our strategies.
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.