|Bid||0.00 x 900|
|Ask||0.00 x 21500|
|Day's Range||74.77 - 75.45|
|52 Week Range||66.67 - 80.96|
|PE Ratio (TTM)||338.30|
|Expense Ratio (net)||0.14%|
A year ago, Jeff Immelt told investors at an industry conference there was a "mismatch" between the performance of company he led, General Electric Co (GE.N), and its stock price. Immelt, whose departure as chief executive was announced last June, proved prescient but perhaps not in the way he was thinking: GE shares have declined 45 percent since that conference and hit a nearly nine-year low in March. On Wednesday, Immelt's successor as chief executive of the industrial conglomerate, John Flannery, will make the case for GE's investment potential at the same annual Electrical Products Group investor conference in Longboat Key, Florida.
The US Census Bureau publishes a monthly report that tracks new orders for machinery, tools, and equipment for US industries. This data is released by the US Census Bureau through the Manufacturer’s Shipments, Inventories, and Orders (or M3) survey. Capex spending by industry can be assessed through this economic indicator.
The Institute of Supply Management (or ISM) publishes a monthly manufacturing (FIDU) report on changes to new orders, supplier deliveries, inventories, production, and employment. The institute constructs 11 indexes using this survey and the ISM new orders index captures the changes in the level of new orders at the producer (RGI) level, which acts as an important forward indicator and thus finds its place in the Conference Board Leading Economic Index (or LEI). The ISM new orders index has an overall weight of 15.9% on the Conference Board Leading Economic Index.
The US Federal Reserve considers the state of the employment market and the level of inflation (TIP) when making monetary policy decisions. Unemployment in the US is at a multi-decade low, leading to a shortage of skilled labor and forcing employers to increase wages to attract employees. The Conference Board Leading Economic Index (or LEI) uses average weekly initial claims as a constituent in its economic model rather than the popular non-farm payrolls because weekly claims, when adjusted for seasonality, provide a more accurate account of underlying economic conditions.
The US Bureau of Labor Statistics conducts the monthly establishment survey and reports the number of hours worked by the manufacturing (FXR) sector workers. The manufacturing sector (ITA) employs a large portion of the US workforce, and increasing worker hours is a strong signal for the economy. Increasing working hours in the manufacturing sector (IYJ) is a sign that employers are anticipating higher demand in the future, which is a positive sign for the economy.
The Conference Board Leading Economic Index (or LEI) is a monthly economic data release that helps investors track changes to the US business cycle. This index was constructed using an economic model that incorporates changes to ten forward-looking economic indicators. The Conference Board is an independent business membership and research institute that prepares reports for different economies.
Netflix’s (NFLX) net income has grown at a three-year and five-year average of 27.9% and 101.1%, respectively. The company’s pre-tax margin grew from 3.9% in 2013 to 4.2% in 2017. The stock prices have beaten the media-diversified industry in 2013, 2015, and 2017. The stock was beaten in 2014 and 2016 by the S&P 500. The market cap had gained 279% between 2013 and 2017.
The Industrial Select Sector SPDR (NYSEArca: XLI), the largest exchange traded fund tracking industrial stocks, is sporting a modest year-to-date loss, underscoring the point that after surging last year, ...
To receive further updates on this Industrial Select Sector SPDR Fund (NYSEARCA:XLI) trade, sign up for a risk-free trial of Maximum Options today. From a technical perspective, the Industrial Select Sector SPDR Fund (NYSEARCA:XLI) looks unlikely to go up much further. For those who might be new to this strategy, a call credit spread is a bearish position that involves writing (selling to open) an option and simultaneously purchasing (buying to open) an option at a different strike price in the same underlying security.
In the week that ended on May 18, the S&P 500 Index closed at 2,712.97, a fall of 0.54% compared to the previous week’s close of 2,727.72. With trade wars, geopolitical tensions, and most companies’ first-quarter earnings behind us, we can expect markets to start focusing on the threat from higher rates.
Capacity utilization in US industries and industrial production data are published by the Federal Reserve every month. There are only a few economic indicators that act as a precise leading indicator for the US economy, and capacity utilization is one of them.
The Federal Reserve released the April industrial production report on May 16. Tracking changes to the industrial production index helps us assess future changes to the business cycle. Industrial production continued to increase in the last few months except for a slump in January, which was a known seasonality.
3M (MMM) is falling on Wednesday, even as the Industrial Select Sector SPDR (XLI) edges up 0.1%, following a bearish note from Jefferies. Analyst Laurence Alexander downgraded 3M to Hold from Buy, and shaved $30 off his price target, to $220, writing that he sees less room for its multiple to expand in a rising-interest-rate environment. Alexander writes that that we are now in a "long late-cycle period where consolidation, bottlenecks, structural improvements in behavior, and a steeper cost curve create opportunities for rallies in upstream and intermediate chemicals where multiples have fallen." The analyst expects early-cycle large cap stocks, such as 3M, to lag.
3M (MMM) announced the key dates for its second-quarter dividend on May 8. Investors on record as of May 18, 2018, will be eligible for the dividend. 3M’s ex-dividend date is May 17. The dividend will be paid to shareholders on June 12. At the end of the first quarter, 3M had 612.7 million outstanding shares. Assuming that 3M doesn’t buy back any shares until the record date, it would pay ~$833.30 million in dividends in the second quarter. In the second quarter of 2017, 3M paid a dividend of $701 million.
So far this year, Western US rail freight giant Union Pacific’s (UNP) YoY (year-over-year) freight volume growth has lagged behind rival BNSF Railway’s (BRK.B). In Week 18, UNP’s carload traffic rose 5.2% YoY (year-over-year) to ~94,400 carloads (excluding intermodal units) from ~89,800. It underperformed BNSF Railway (BRK.B), whose carload traffic grew 10.7%, and US railroads.
As of April 30, the data show that Delta Air Lines’ (DAL) short interest has increased since it announced its 1Q18 earnings. One of the major reasons for the rise in DAL’s short interest is the high price of crude oil. Higher crude oil prices could have an adverse impact on airlines, as it’ll increase their operating costs in a big way, which in turn could negatively affect operating profits.
The “Job Openings and Labor Turnover Survey” (or JOLTS) data for March was reported on May 8 and contains key information about job openings and total separations. The total number of separations include layoffs, retirements, and voluntary quits. As per the latest JOLTS report, the total separations for March came in at 5.3 million at a rate of 3.6% of the total workforce, an increase from the February reading of 5.2 million and 3.5%, respectively.
The Bureau of Labor Statistics (or BLS) released the “Job Openings and Labor Turnover Survey” (or JOLTS) data for March on May 8. The BLS collects the data through a monthly survey of nearly 16,000 employers in the government, private (XLI), and non-farm sectors. The survey measures new employees hired, employees who have quit, employees who have been asked to leave, and other job separations.
As part of its statutory mandate, the US FOMC seeks to foster maximum employment and stable prices (TIP). The unemployment rate peaked at 9.0% during the recession of 2007–2010 and has slowly decreased to a 17-year low of 4.1% in March.
For the week ending May 4, the S&P 500 Index (SPY) closed at 2,663.42. With a minor change, the index was 0.24% compared to the close for the week ending April 27. To sum up the earnings season, nearly 90% of the companies reported better-than-expected earnings, which kept SPY afloat during the previous week.
In 1Q18, Boeing’s (BA) Global Services segment’s revenues jumped 8.0% to $3.9 billion compared with $3.6 billion in 1Q17. Growth in commercial services boosted the segment’s revenues in 1Q18. The segment’s revenues accounted for 16.5% of total revenues in 1Q18, compared with 16.5% in 1Q17.
Defense stocks haven't done well since reporting first-quarter earnings, which Wells Fargo's Sam Pearlstein blames on investors selling industrial stocks as they fret about the economic cycle. Pearlstein writes that defense stocks have historically outperformed most years.
In the previous parts of this series, we discussed how the broader market S&P 500 Index (SPY) and major sectors of the S&P 500 Index performed in April. Modifications in Donald Trump’s import tariff imposition and companies’ 1Q18 earnings played important roles in market movement in April 2018.