|Day's Range||0.7500 - 0.7500|
Major U.S. indexes are swelling in today's early session, continuing from last week's climb up off the canvas following the worst trading day of the year on Wednesday.
What's more wild, the story unfolding with General Electric (NYSE:GE) or the volatility in the stock market?Headline after headline has been wreaking havoc on the broader markets, as volatility remains elevated and as investors try to figure out their next step. Trade war worries, imploding foreign stock markets and recession concerns are engulfing the news flow.InvestorPlace - Stock Market News, Stock Advice & Trading TipsCasual investors will at least like the news from the stock market today, where the SPDR Dow Jones Industrial Average (NYSEARCA:DIA) rose 1.25%, the SPDR S&P 500 ETF (NYSEARCA:SPY) climbed 1.48% and the PowerShares QQQ ETF (NASDAQ:QQQ) jumped 1.61%.Amid that calamity, the story unfolding with General Electric is even more interesting. Is GE Stock a Sham or a Buy?General Electric has been under pressure since it reported earnings. For months, readers here have been cognizant of $10.50 range resistance and $9 range support. The breakout never materialized and GE stock quickly sank down to support. * 10 Cheap Dividend Stocks to Load Up On It was an unimpressive showing, but not surprising given the volatility in the broader market and the suspect nature of GE's balance sheet. The most recent quarter showed that General Electric is inching its way out of trouble, but could still have some unknown risks, particularly with Boeing's (NYSE:BA) 737 issues.On Thursday, range support between $9 and $9.25 blew out, as reports began circulating that a whistleblower was sounding the alarm on GE's accounting practices. That whistleblower was Harry Markopolos, who also raised concern over Bernie Madoff before his ponzi scheme was uncovered.GE pushed back, saying it stands behind its financials and that it remains in a strong position of liquidity. GE even went as far as to say that Markopolos is being "compensated by unnamed hedge funds [that] are financially motivated to attempt to generate short selling in a company's stock."Wow, dramatic.It doesn't end there, though. GE CEO Larry Culp refuted the claims even more aggressively, calling it "plain and simple" market manipulation. He then went out and bought 2 million shares of GE stock!Analysts came out to GE's defense on Friday morning, as did the well-known short-seller of Citron Research, Andrew Left. The latter also corroborates GE's stance regarding hedge fund compensation, noting that, "As noted in the disclaimer on his site, Harry is being paid a % of profits from an unnamed hedge fund that is short GE. No credible hedge fund or short seller would ever do this."GE jumped almost 9% in response to Friday's news, (Here's the trade layout). Movers in the Stock Market TodayGE was an obvious mover on the day, but it wasn't the only one.Nvidia (NASDAQ:NVDA) rallied 7.5% on the day, showing some upside momentum after the company beat on earnings and revenue estimates. While the headline numbers look good and many believe in its long-term future, there are still some short-term concerns. Revenue sank 17.3% year-over-year and management expects third-quarter sales of $2.84 billion to $2.96 billion. Expectations were at $2.98 billion.Still, NVDA is on the move higher, which may be good news for bulls should the overall market start to rally too.Deere (NYSE:DE) stock was also on the move higher, climbing over 4% despite missing on bottom-line expectations. Earnings of $2.71 per share missed analysts' expectations by 13 cents. However, revenue of $10.04 billion handedly beat estimates by $660 million despite sinking 2.6% year-over-year.Shares of Palo Alto Networks (NYSE:PANW) were trading well on the day, up several percent before collapsing in the afternoon. PANW ended lower by 7.2% on news that Dave Peranich, EVP of worldwide sales, is leaving his post after three years on the job. Seems like it could be an overreaction, even if he was a top sales exec.Disney's (NYSE:DIS) latest billion-dollar hit is Toy Story 4, the company's fifth billion-dollar film this year. It now holds the record for most such films in a single year, while there is only one other competing film this year to top the nine-figure mark (Spider-Man: Far From Home). Further, the company announced last month that it had broken its prior annual box office record total of $7.61 billion, pulling in $7.67 billion in sales already in 2019.Don't forget, there's Frozen 2 and a Star Wars film still slated for 2019. It's going to be a huge year for Disney.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long NVDA and DIS. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post Stock Market Today: Is GE a Fraud or a Screaming Buy? appeared first on InvestorPlace.
U.S. markets and stock ETFs rallied Friday as Germany's right-left coalition government works on plans to take on new debt to stimulate the economy. On Friday, the Invesco QQQ Trust (QQQ) increased 1.7%, SPDR Dow Jones Industrial Average ETF (DIA) rose 0.9% and SPDR S&P 500 ETF (SPY) was 1.5% higher. “This is huge news from a European perspective,” Brad McMillan, chief investment officer of Commonwealth Financial Network, told Reuters.
Plunging Treasury bond yields spooked a lot of investors this past week, especially after the yield on the 10-year Treasury briefly fell below that of the 2-year for the first time in more than a decade. That so-called inverted yield curve has preceded each of the last seven recessions. But Scott Ladner, chief investment officer at Horizon Investments, tells Yahoo Finance that the U.S. stock market shouldn’t necessarily be taking its cue from the bond market right now. That’s because about $17 trillion of government bonds worldwide are trading at negative yields, according to Bloomberg.
The Federal Reserve's recent interest rate cut in late July looks "more out of line than ever" given no immediate signs of a recession, the economist wrote. The central bank faces pressure from President Donald Trump, who publicly blasted Fed Chairman Jerome Powell on multiple occasions to lower rates even more.
Right now, we're still in perhaps the greatest bull run in history.The "weather" is terrific: low interest rates, an economy firing on all cylinders and a business-friendly administration in the White House. The Dow Jones Industrial Average recently hit 27,000 for the first time ever -- and, despite some recent turbulence, remains near record highs.But the longer this decade-plus bull market runs, the more investors worry about its end.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThey're right to worry. After all, every business cycle turns -- and so will this one.Economic recessions … real estate busts … stock market crashes … wars … financial shocks. These aren't aberrations. In fact, they are common occurrences. A quick tour of American history shows how this is the case. During the 110 years from 1900 to 2010, we've had the Great Depression, two world wars, more than 30 bear markets (market drops of more than 20%), the runaway inflation of the 1970's, the savings and loan crisis of the 1980's, the 2000-'02 dot-com crash and the 2007-'08 financial crisisI'm seeing signs that the next crash could hit soon.That doesn't mean you should panic and sell everything -- just that you should be prepared by defending your wealth. After all, there are always ways to make money, even if the market tumbles. * 10 Cheap Dividend Stocks to Load Up On So here are three warning signals I'm seeing that could cause problems for the market -- and one step you can take today to make sure you're prepared for the worst… Market Crash Warning Signal No. 1: Deep in DebtSource: Shutterstock Let's go back to 2007 … right before the last time the market crashed.The economy had been humming along at a growth rate of 2% to 3% for the previous five years, which caused the S&P 500's earnings to double from the recessionary lows of 2002. Thanks to these boom-time conditions, the national unemployment rate fell below 5%. Investors were loving it!Share prices had more than doubled over the previous five years. But below the surface, trouble was brewing.While the stock market was busy hitting new all-time highs, mortgage debt, credit card debt, student debt, corporate debt and government debt were also hitting new all-time highs. The U.S. economy was literally drowning in debt. The economy's foundation was crumbling beneath our feet.Then stock prices collapsed…The S&P 500 fell from its October 2007 high of 1,576.09 to an "apocalyptic" low of 666 in March 2009. That was a collapse of 57.7%.The economic and stock market conditions of today share some important traits with the 2007 version.The U.S. economy has recovered nicely from the 2007-2008 crisis, producing a steady string of 2% to 3% growth. As a result, the unemployment rate is below 5% once again.Plus, the current financial boom is even bigger than the 2002-2007 bull market. This time around, the S&P's earnings have tripled, as the stock market has rocketed more than 400% from its recessionary lows of 2009.But despite this prosperity, our economy looks shaky if you examine it up close. Mortgage debt is once again close to the nosebleed levels it hit in 2008. Credit card debt has jumped to a new all-time high of $870 billion. Student loan debt has skyrocketed to nearly $1.5 trillion. That's triple what it was in 2007. And corporate debt outstanding is hitting new all-time records, just like it was in early 2008. The difference is that the current levels nearly 50% higher than they were then.It's easy to "explain away" the market downturns we've seen so far this year -- in May and now in August -- as just temporary bumps during our decade-long bull run.But they could be the start of something much bigger… Market Crash Warning Signal No. 2: The Recession IndicatorSource: Shutterstock On the morning of Aug. 14, before the U.S. markets opened, we witnessed a rare but ominous event.That's when a closely watched yield curve inverted for the first time since late 2005. Translation: The 10-year Treasury bond yield dropped below the yield of the 2-year Treasury.This yield curve is a fairly reliable recession indicator. In fact, all five yield curve inversions since 1978 have been followed by recessions. Last time this yield curve inverted was in December 2005, two years before the recession hit.So, not surprisingly, investors and Wall Street's supercomputers immediately started selling stocks and moving into bonds. As you and your portfolio likely recall, the Dow Jones Industrial Average plummeted 800 points that day -- and the other market indices sunk around 3% as well.Starting from our peak back in late July, the S&P 500 has now sold off around 5%.Moreover, according to the New York Federal Reserve's proprietary yield curve-based recession probability model, there's a 27% chance we will face a recession in the next 12 months.I know … 27% doesn't sound like bad odds, but here's the thing: The last time the probability of a recession reached that high was back in early 2007, not long before the Great Recession kicked off. * 10 Stocks Under $5 to Buy for Fall Plus, one well-regarded analyst -- Jesse Colombo at Clarity Financial -- says the Fed indicator's modeling is skewed thanks to some top-level shenanigans back in the 1980's.He places the odds of a recession in the next year at 64%.In other words, our top "recession indicator" is flashing red. Market Crash Warning Signal No. 3: Another Kind of RecessionSource: Shutterstock As I write this, a second-quarter earnings recession is just about a done deal.With just about all of the S&P 500 components having reported, the year-over-year EPS growth estimate is negative 0.72%, according to FactSet.If that negative earnings score holds out, it would follow a 0.21% decline in the first quarter. And an earnings recession is defined as two consecutive quarter of negative growth.True, 0.72% and 0.21% declines don't sound bad. But here's the point…We're seeing no growth in corporate earnings.At best, according to the earnings followers at FactSet, S&P 500 earnings will grow 1.5% this year. That's far short the 6% growth the experts forecast at the start of 2019. In fact, FactSet says, we could see an earnings contraction.The last earnings recession was during the second quarter of 2016.The market fallout following that was small -- just 4.1% between mid-August and early November 2016.But things could get a lot worse this time.Consider these three factors… * More than one quarter of the world's bonds are "paying" a negative These "grifter" bonds literally take a little bit of your money away from you every day. * Geopolitically, the planet seems to be enjoying relative calm. but tensions are on the rise in Hong Kong, North Korea, Iran, and Syria. * The ongoing U.S.-China trade war is taking a bite out of global growth… and threatens to consume it completely. "This type of scenario is among the reasons why we referred to 2019 as a delicate year for the global economy," the International Monetary Fund recently warned.Still, despite these widespread signs of distress in the real economy, stock valuations are high, just like they were in early 2008.To be sure, the stock market could keep rising over the next few months -- and even hit new all-time highs. But history shows the risk of a severe selloff is high.The National Association for Business Economics recently surveyed nearly 300 business economists, and about 75% of them believe we'll get a recession by the end of 2021.More than half of them expect it'll come by the end of 2020. The One Step to Take Now That said, investors shouldn't panic -- or even worry -- about a market crash.The market crash may take months or even years to get here, but it's inevitable - and no effort on anyone's part is going to stop it.Instead of worrying, investors should make moves right now to defend their wealth - and make even more money along the way.To help you do so, I've written the book on bear market preparation.Part "diary" and part "owner's manual," Bear Market 2020: The Survival Blueprint takes you by the hand and walks you, step-by-step, through six simple tactics that will help you and your family survive, and even make money, during America's next bear market.Knowing about and using these bear market defense strategies could mean the difference between having an abundant retirement -- or barely getting by in your old age.In this report, I've shown you why a bear market -- or worse, a market crash -- is coming.The clock is ticking.Click here to find out how to get our survival guide.Eric Fry is a 30-year international finance expert, former hedge fund manager, and InvestorPlace's resident expert on global investment trends. He founded his own investment management firm and served as a partner several others. One of the few analysts who predicted the last big market crash, in 2007-'08, Eric showed his readers how to profit off of companies that eventually went bust. His readers could have walked away with gains like 1,415% on Countrywide Financial, 4,408% on Fannie Mae, and even 6,425% on Freddie Mac. With Fry's Investment Report, Eric's goal is to track the world's biggest macroeconomic and geopolitical events - and help investors make big gains from those emerging opportunities. Click here to learn more. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post 3 Warning Signals a Stock Market Crash Is Coming appeared first on InvestorPlace.
U.S. markets and stock ETFs stabilized late Thursday as upbeat retail data helped offset the recessionary fears. On Thursday, the Invesco QQQ Trust (NASDAQ: QQQ) was flat, SPDR Dow Jones Industrial Average ...
The latest round of 13F filings from institutional investors were out this week, revealing to the world the stocks that some of the richest and most successful investors have been buying and selling. Takeaways ...
China's Customs Tariff Commission of the State Council said in an online post the government feels "severely violated" by Trump's tariff escalation as it is not consistent with an agreement reached during the G-20 summit, CNBC wrote. Trump wrote in a Tweet Wednesday China President Xi Jinping is a "great leader who very much has the respect of his people." He followed up that his Chinese counterpart likely wants to "quickly and humanely" reach a solution to the escalation of tensions and riots in Hong Kong.
It's not a stretch to say plenty of market participants are focusing on the inverted yield curve. The SPDR S&P 500 ETF (NYSE: SPY), the world's largest exchange traded fund, closed with a dividend yield of 1.87%. News of 10-year yields dropping below that of SPY come as some market observers believe dividend growth expectations have gotten too pessimistic.
The S&P 500, as represented by the popular exchange-traded fund the SPDR S&P 500 ETF (NYSEARCA:SPY), has embarked on a slippery slope lower over the past couple of weeks. For active investors this is a time where it pays to be tactical and measure downside targets one day at a time. I still like being short the SPY ETF from a trading perspective and below I lay out my case for the next downside levels this ETF could possibly reach.Source: Shutterstock When I first offered the trade idea to short the S&P 500 on Aug. 1, the recent selling pressure had just begun. In the meantime, the proposed first downside target of the trade idea around $288 in the SPY ETF has been reached. Furthermore, the index has found some time to consolidate and over the past day or so and it now looks to have begun making its next leg lower.Thus it's time to look at this trade idea again for what the next downside targets could be.InvestorPlace - Stock Market News, Stock Advice & Trading Tips SPY ETF ChartsFirst, on the bigger picture chart note that the upper-end of our "megaphone pattern" (purple lines) has indeed offered resistance for stocks. The popular S&P 500 ETF then subsequently first broke below the steepest rising wedge pattern (red line), followed by the next and larger rising wedge pattern (black lines). * 15 Growth Stocks to Buy for the Long Haul As we want to take this day-by-day, week-by-week and month-by-month, I don't yet want to focus on the potential much lower target at the bottom of the megaphone pattern, or at least around the late December 2018 lows … although that ultimately is a downside target worth keeping in mind.On the daily chart we see that from Aug. 8 to Aug. 13 an important price area around the $293 - $294 zone offered critical technical resistance for the SPY ETF. It so happens that this area also coincided with the yellow 50-day simple moving average, as well as a 50% retracement of the first leg lower from late July into early August. With the selling pressure from Aug. 14, the SPY ETF now looks to have embarked on the next leg lower that could see the red 200-day simple moving average as a first downside target, around the $280 area.While the second and possibly third downside target could take some time to reach (if and when), here they are: * The second price target is around $269, which is the 50% retracement of the entire 2019 stock market rally * The third price target is around $260, which is the 61.80% Fibonacci retracement of the entire 2019 stock market rallyMy clients and I prefer to structure a trade in the highest probability manner, which, in this case, means selling a very specific options spread on the SPY ETF.In order to teach this special options trade I am holding a webinar for InvestorPlace readers on Thursday, Aug. 15. Register here.Join Serge in an exclusive live webinar: The steady income options strategy. Register HERE. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks Under $5 to Buy for Fall * 5 Stocks to Avoid Amid the Ongoing Trade War * 7 5G Stocks to Buy Now for the Future The post Trade of the Day: It's a Hot Time to Trade the SPDR S&P 500 ETF Again appeared first on InvestorPlace.
Stock market volatility, as measured by the CBOE Volatility Index (VIX), has surged in recent weeks, but price swings in other asset classes such as oil, bonds, and currencies also have become more pronounced, a warning sign for the broader market. “That becomes a risk that equity volatility is going to move even further,” Stuart Kaiser, head of equity derivatives research at UBS Group AG, told the The Wall Street Journal in a detailed story. Meanwhile, the low volatility stocks in the S&P 500 Low Volatility Index have been beating the full S&P 500 Index (SPX) by a wide margin, per Barron's. The respective gains over the past 12 months through Aug. 13, 2019 are 14.6% and 3.7%, per S&P Dow Jones Indices.
It has been a very tough couple of days for traders, with the choppy action in United States stocks frustrating both the bulls and the bears. As for Wednesday, well, it was another tough session in the stock market today. The SPDR S&P 500 ETF (NYSEARCA:SPY) fell 2.96%, while the PowerShares QQQ ETF (NASDAQ:QQQ) dropped 2.99%.The cause? The yield curve.InvestorPlace - Stock Market News, Stock Advice & Trading Tips What's the Yield Curve All About?Before we do anything, let's talk about this yield curve and spreads.In a healthy environment, one can plot the yields of bonds on a chart and see a positive slope, basically meaning that as the duration of the bond gets longer, the yield goes higher. However, when you keep hearing about a flattening or inverting yield curve, it means that the opposite is occurring -- that short-duration bonds are yielding more than long-duration bonds. * 15 Growth Stocks to Buy for the Long Haul This development shows itself in the spread. Traders often look at the 10-year/2-year Treasury spread. As this spread -- measured by the 10-year yield minus the 2-year yield -- approaches zero, investors start to grow leery. When it inverts, meaning the 2-year yields more than the 10-year, then investors get a bit finicky.That's what happened on Wednesday and that's what caused the selloff. Recession ImplicationsSome of you might be wondering, "what's all this hoopla about bond yields anyway?" Well, the hoopla comes from the fact that an inverted yield curve -- and in particular, a negative 10-year/2-year spread -- has historically preceded economic recessions with surprising reliability.Don't forget, when the algos see the negative spread on the 2-year/10-year or recession headlines start spreading, they start selling. That's just the way it is. It doesn't help that China's economic numbers aren't all that hot, while Europe's strongest member -- Germany -- hovers just above contraction territory.For argument's sake, let's assume that a U.S. recession is on the way, even though the U.S. still has a strong labor market and relatively healthy businesses. What does that mean for the stock market?Stocks tend to be forward looking, while economic readings are lagging indicators. So we should surely expect the market to be in trouble before a recession is actually on the books. However, that doesn't mean markets peak or decline directly after a 2-year/10-year inversion.This is noteworthy.Of the last five recessions, the yield curve inverted an average of 17 months before the start of the recession. At its fastest, it was 10 months early. At its slowest, it was 24 months -- two years full years.Referring to the time between the inversion and the recession as the "lag period," stocks performed well. The S&P 500 was positive four of the five times, recording gains of at least 11% on each of those four years. Three of those years boasted gains of more than 22%. The one year it didn't was amid the dot-com bust, a bubble we certainly aren't matching in U.S. equities at the moment.So while the worry is real, investors need to remember that the U.S. economy is still doing relatively well and that just because we have a brief 2-year/10-year inversion (so far), doesn't mean we're headed for the gallows tomorrow. Movers in the Stock Market TodayMacy's (NYSE:M) did well to rally off the lows, but the 13.3% decline was still enough to send shares to new 52-week lows. The company badly missed on earnings, reporting a profit of 28 cents per share vs. expectations of 45 cents per share. In-line revenue and a cut to management's full-year earnings outlook didn't help matters.Nordstrom (NYSE:JWN), Kohl's (NYSE:KSS), J.C. Penney (NYSE:JCP) and others heavily sold off in sympathy. Keep in mind, Walmart (NYSE:WMT) will report on Thursday too. It has been a stalwart in the retail space.Keeping with retail, Canada Goose (NYSE:GOOS) and The RealReal (NASDAQ:REAL) were hammered too. Canada Goose fell 7.5% even as revenue of $71.1 million scorched estimates of $41.1 million. Worsening profitability likely alarmed investors, despite the torrid revenue growth.For REAL, a top- and bottom-line earnings beat led to an initial surge of almost 20% in after-hours trading. That flipped to a 15% decline for the stock, as the recent IPO makes new lows. Traders can wait for a reversal before diving into this one.World Wrestling Entertainment (NYSE:WWE) was one of the few winners on the day. Shares climbed 1.1% after Rosenblatt analysts initiated the stock with a buy rating and $85 price target. Although, it's worth pointing out that this name is down 16% in the last three months and 23% in the last six.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 * 15 Growth Stocks to Buy for the Long Haul * 5 More Cloud Stocks With Plenty of Potential * 5 Clean Energy ETFs to Buy for 2019 The post Stock Market Today: Are We About to Enter a Recession? appeared first on InvestorPlace.
According to John Sheehan, accommodative Fed policy and favorable market technicals drove the investment grade credit market’s strong start to 2019, by John Sheehan Continue reading...