|Bid||64.26 x 1800|
|Ask||64.45 x 1400|
|Day's Range||64.46 - 64.74|
|52 Week Range||53.45 - 64.84|
|PE Ratio (TTM)||N/A|
|YTD Daily Total Return||2.47%|
|Beta (5Y Monthly)||0.61|
|Expense Ratio (net)||0.13%|
Yahoo Finance's Jared Blikre joins Zack Guzman, Julia LaRoche and Clearnomics Founder & CEO James Liu on YFi PM to break down the best and worst performing sectors in 2019.
Over the last few weeks, we have shared some of our concerns about the market -- falling margins, slowing manufacturing, yield inversions, etc.Source: Shutterstock We've also covered some of the issues traders are talking about that aren't likely to have a long-term or predictable impact on the major indices -- the outbreak of the coronavirus from China, the Democratic presidential primary, Brexit.So far, it appears that our generally positive outlook was justified, if perhaps a little overly cautious.InvestorPlace - Stock Market News, Stock Advice & Trading TipsHowever, we still recommend maintaining a careful stance because most of the fundamental issues facing the market remain unchanged. In this week's update, let's do a quick review of some potential trouble spots in market sentiment and what might motivate a shift in our outlook in either direction. Yields Remain FrustratingLately, you may have seen headlines in the financial press about long-term Treasury bond prices falling again.Although the yield curve -- comparing the 10-year yield to the 2-year yield -- hasn't inverted since last August, falling long-term yields are worrisome on their own because of their status as a leading indicator for minor (and sometimes major) corrections in the market.As you can see in the following chart, the yield on 10-year U.S. Treasury bonds, as represented by the CBOE 10-year Treasury Note Yield Index (TNX), has been falling since just before the Christmas holiday. However, prices on the S&P 500 have been rising during that period.Source: Charts by TradingView Historically, a divergence like this that lasts for more than a month has a 74% chance of ending with a 7%-15% correction in stock prices within 60 days. There is a lot of variability in the data, but the pattern is reliable enough to warrant watching the market closely.The last time we saw this sort of divergence was in the third quarter last year when the market pulled back against resistance twice in a row. Risky Assets Like IWM and XLP Are UnderperformingA confirmed bullish rally is usually led by the riskiest asset classes, like small-capitalization stocks, high-yield bonds and emerging-market stocks. Currently, those asset classes are lagging safety assets like Treasury bonds and large-cap stocks.As you can see in the following chart, small-cap stocks (light blue), as represented by the iShares Russell 2000 ETF (NYSEARCA:IWM), are still trading below their recent highs. On the other hand, consumer staples (candles), as represented by the Consumer Staples Select Sector SPDR Fund (NYSEARCA:XLP), have been setting new records this week.Source: Charts by TradingView The positive takeaway in a situation like this is that at least investors are taking on new risk -- even if it is in the safest sectors.However, in our experience, if this second divergence continues, we will likely experience greater volatility in March. A very similar situation occurred just prior to the volatility we experienced in the third quarter last year. It's also similar to the situation right before the bear market in late 2018. Sentiment IndicatorsOne of the ways we can get an internal view of the market is through sentiment indicators that look at derivatives pricing for signs of stress. For example, one of our favorites is the CBOE SKEW index, which measures the pricing of put options on the S&P 500. Investors use puts to hedge against risk. If the SKEW is high, investors are hedging, meaning they are nervous.Sometimes the SKEW index can be very wrong, but when it reaches extremes it is usually correct. The spike in the SKEW that occurred on Dec. 19, 2019 turned out to be a false alarm. But our concern is that the lows on the SKEW haven't returned to normal levels. Instead, they continue to rise with the market.As you can see in the following chart, the SKEW is still at moderate levels. But, the floor for the index is higher than it has been since the fall of 2018. This indicates that option prices remain elevated and big traders are still keeping their hedges close.Source: Charts by TradingView The Bottom LineWe don't bet against the market trend, so our outlook remains positive for now. But this update was a chance to explain why we feel a cautious approach is best. We should increase our tolerance for adding risk if rates start to rise, risky assets begin outperforming again or sentiment begins to improve.Conversely, if the indicators we have discussed continue to deteriorate, we will want to be a bit more aggressive about hedging our own risk. We may even want to seek some opportunities to the downside.One of the advantages we have as option traders is our ability to be flexible about how much risk we are taking on and our capacity to determine what that risk looks like.This is especially important right now because it gives us the opportunity to harvest extra premium from the options market.John Jagerson & Wade Hansen are just two guys with a passion for helping investors gain confidence -- and make bigger profits with options. In just 15 months, John & Wade achieved an amazing feat: 100 straight winners -- making money on every single trade. If that sounds like a good strategy, go here to find out how they did it. John & Wade do not own the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 20 Stocks to Buy From the Law of Accelerating Returns * 10 Strong Lottery Ticket Stocks That Could Soar in 2020 * 7 U.S. Stocks to Buy on Coronavirus Weakness The post Stocks Are Bullish, But Traders Are Still Cautious appeared first on InvestorPlace.
Shares of Kraft Heinz Co. slipped 0.1% in premarket trading Thursday, after the food and beverage company reported a fourth-quarter profit that beat expectations, although sales fell short. The company swung to net income of $182 million, or 15 cents a share, from a loss of $12.57 billion, or $10.30 a share, in the year-ago period. Excluding non-recurring items, such as impairment charges, adjusted earnings per share slipped to 72 cents from 84 cents but was above the FactSet consensus of 68 cents. Sales fell 5.1% to $6.54 billion, below the FactSet consensus of $6.61 billion. In the U.S., sales declined 2.7% to $4.68 billion to miss expectations of $4.74 billion, as volume/mix decreased by 5.8 percentage points as lower shipments of cheese, coffee, cold cuts and bacon offset growth in condiments and sauces. Pricing increased 3.1%. The stock has dropped 9.8% over the past three months, while the SPDR Consumer Staples Select Sector ETF has gained 4.8% and the S&P 500 has climbed 9.2%.
Reynolds Consumer Products Inc.'s stock opened Friday morning 5.8% above its initial public offering price, to give the household products maker a market capitalization of nearly $5.6 billion. The first trade for the stock was at $27.50 at 10:36 a.m. Eastern for 6.5 million shares, after the IPO priced late Thursday at $26, which was in the middle of the expected range of $25 to $28. The stock has inched slightly higher since then, and was last up 6.2%. Reynolds went public at a time that the Renaissance IPO ETF has rallied 10.9% over the past three months, while the SPDR Consumer Staples Select Sector ETF has gained 4.2% and the S&P 500 has advanced 6.9%.
Shares of Procter & Gamble shed 2.5% in premarket trading Thursday, after the consumer products company reported a fiscal second-quarter profit that beat expectations but revenue that rose less than forecast. Net income increased to $3.72 billion, or $1.41 a share, from $3.19 billion, or $1.22 a share, in the year-ago period. Excluding non-recurring items, core earnings per share came to $1.42, above the FactSet consensus of $1.37. Sales increased 5% to $18.24 billion, below the FactSet consensus of $18.42 billion. Beauty sales increased 7%, grooming sales rose 2%, health care sales increased 14%, fabric and home care sales rose 4% and baby, feminine and family care sales rose 4%. For fiscal 2020, the company raised its sales growth guidance range to 4% to 5% from 3% to 5% and lifted its core EPS growth outlook to 8% to 11% from 5% to 10%. The stock has gained 2.1% over the past three months through Wednesday, while the SPDR Consumer Staples Select Sector ETF has climbed 4.7% and the Dow Jones Industrial Average has advanced 8.8%.
Fairway Market issued a statement via its Twitter account saying it's not filing for bankruptcy. "Despite reports, Fairway Market has no intention to file for chapter 7 or liquidate all of its stores," the iconic New York City grocer wrote. "All 14 stores remain open for business, offering a complete range of high quality, specialty food products, and we look forward to seeing our customers and employees." The New York Post previously reported that Fairway was on the verge of bankruptcy and would be closing all of its locations, though interest from Village Super Market Inc. could save a "handful" of stores. Fairway, which was previously publicly traded, has struggled in the past. An ill-timed expansion and debt drove a chapter 11 filing in 2016. It emerged from bankruptcy with a new board and consortium ownership that included Blackstone Group's GSO Capital Partners. Blackstone's GSO no longer has a position in the company. The Consumer Staples Select Sector SPDR Fund is up 23.4% over the past year while the S&P 500 index has gained 26.6% for the period.
Reynolds Consumer Products set terms of its initial public offering Tuesday, to raise up to $1.32 billion and to value the consumer products company at up to $5.07 billion. The company, which brands include Reynolds Wrap, Hefty and Alcan, said it will offer 47.17 million shares in the IPO, which is expected to price between $25 and $28 a share. The company said there will be 202.63 million shares outstanding after the IPO. If the underwriters, led by Credit Suisse, Goldman Sachs and J.P. Morgan, exercise all the options to buy additional shares, Reynolds Consumer could raise up to $1.52 billion. The company recorded net income of $135 million on revenue of $2.20 billion over the nine months ended Sept. 30, compared with net income of $92 million on revenue of $2.24 billion in the same period a year ago. The company is looking to go public at a time that the Renaissance IPO ETF has rallied 17.4% over the past three months, while the SPDR Consumer Staples Select Sector ETF has gained 4.7% and the S&P 500 has tacked on 10.7%.
The coffee industry is a complex and multilayered one, including everything from producers and distributors to processors, wholesalers, and retailers, including Starbucks Corp. (SBUX), JM Smucker Co. (SJM) and Restaurant Brands International Inc.
Nearby resistance combined with common technical sell signals suggest that the consumer staples sector could be headed for a pullback.
Shares of Colgate-Palmolive Co. slumped 0.9% in morning trading Thursday, to buck the gains in its consumer staples peer group and the broader stock market, after BofA Securities downgraded the consumer products company, citing concerns over continued market-share losses. Analyst Olivia Tong cut her rating to neutral from buy, and lowered her price target to $74 from $77. "While we continue to view [Colgate-Palmolive] as one of the higher quality names in consumer staples, with dominant market shares, low private label exposure, geographic depth, and a more aggressive stance in driving growth, struggles to stem share losses in toothpaste and tough [comparisons] drive our concern that conditions will be more challenging next year, potentially necessitating another year of outsized investment," Tong wrote in a note to clients. The stock's decline comes while the SPDR Consumer Staples Select Sector ETF gained 0.4% and the S&P 500 tacked on 0.2%.
High Ridge Brands Co. announced Wednesday that it has filed for voluntary chapter 11 bankruptcy and is pursuing sale of the company. High Ridge's portfolio includes Zest soap, Alberto VO5 hair care products, and the Reach toothbrush. High Ridge says the company's U.K. business operations are not included in the bankruptcy filing. High Ridge has received a commitment of $20 million debtor-in-possession financing, and the company says it has enough liquidity to continue with business obligations including making deliveries in full and paying suppliers. The Consumer Staples Select Sector SPDR ETF is up 23.7% for the year to date while the S&P 500 index is up 27.5% for the period.
Shares of General Mills Inc. rose 1.6% in premarket trading Wednesday, after the consumer foods company reported a fiscal second-quarter profit that beat expectations, while revenue came up a bit shy. Net income for the quarter to Nov. 24 rose to $580.8 million, or 95 cents a share, from $343.4 million, or 57 cents a share, in the year-ago period. Excluding non-recurring items, adjusted earnings per share of 95 cents beat the FactSet consensus of 88 cents. Sales inched up to $4.42 billion from $4.41 billion, just below the FactSet consensus of $4.43 billion, as North America retail sales were in line with expectations, convenience stores and foodservice sales missed and pet sales beat. The company affirmed its fiscal 2020 adjusted EPS growth guidance of 3% to 5%; the FactSet EPS consensus of $3.36 implies 4.3% growth. The stock has lost 4.3% over the past three months, while the SPDR Consumer Staples Select Sector ETF has gained 3.3% and the S&P 500 has advanced 6.2%.
Shares of Unilever PLC tumbled 9.11% toward a 9-month low in afternoon trading Tuesday, after the U.K.-based consumer goods giant warned of a sales miss for the year. The stock was on track to suffer the biggest one-day percentage decline since May 2003. The company said earlier that it expects 2019 sales growth to be below its previous guidance, of the "lower half" of its 3% to 5% multi-year range. "This is a result of challenges in the quarter in some markets, including the economic slowdown in South Asia, one of Unilever's largest markets, and trading conditions in West Africa remaining difficult," the company said in a statement. "The trading environment in developed markets continues to be challenging and while there are early signs of improving performance in North America, a full recovery there will take time." The stock has gained 7.7% year to date, while the SPDR Consumer Staples Select Sector ETF has run up 24.0% and the S&P 500 has surged 27.5%.
The Consumer Staples Select SPDR (NYSEArca: XLP) is staving off trade war news and hitting new highs, which could have consumer staples riding alongside its wave with strength in defensive equities over ...