It's Wednesday morning and traders are turning to the combination of housing data and earnings for direction. Meanwhile, the Nasdaq is in focus.
It's Wednesday morning and traders are turning to the combination of housing data and earnings for direction. Meanwhile, the Nasdaq is in focus.
Get the most from your retirement savings in these affordable places outside the U.S.
Futures rose on stimulus deal hopes after stocks sold off on stimulus deal pessimism. Yep. Also, Apple has a new buy point, but with flaws. Several other giants are forging handles.
Data was reported last week by the federal government on diesel inventories that was historic in the magnitude of the change from the prior week. It could mark a shift in the weak diesel market that has benefited carriers and drivers for several months. Ultimately, the price of diesel will be set primarily by the price of crude. But the spread between crude and diesel is also an important factor in the final pump price. That spread has been trending near historic lows for months.The primary reason has been refiners making too much non-jet fuel distillate relative to demand. Diesel is a distillate; so is jet fuel. The result has been that distillate/diesel inventories in the U.S. and the world have been at historically high levels. (Other products besides diesel in the category would include heating oil.)That appears to have shifted. The most transparent and immediate numbers are the weekly Energy Information Administration statistics, released each Wednesday for the week that ended the prior Friday. And the numbers that came out last week (Thursday, actually, due to the Columbus Day holiday) were eye-popping when it comes to diesel.The most easily understood inventory number is "days cover." That number is reached by taking daily consumption, dividing it into inventories and the result is the number of days of consumption that could be covered by existing stocks.For distillate inventories that don't include jet fuel, that number tends to run in the range of 28-35 days. But earlier this year, as diesel inventories began to soar due to changes being made by refiners seeking survival — more on that later — the days cover figure broke above 50 days. In the history of the EIA series going back to 1991, the days cover figure broke above 50 only a handful of times. It was never sustained above that level.This year, the days cover figure broke through 50 days in late May and stayed above it for nine out of the next 10 weeks. The growth in inventories was unprecedented. It dropped below 50 days in early August but stayed in the 47 to 49 days' range all through September and into October. That was unprecedented.But last week, that number plummeted to 42 days, a drop of 6.1 days. It was easily the biggest one-week decline in the history of the series. It meant that in one week, six days of distillate/diesel inventory cover disappeared. That had never happened before.Why? There were two major contributors to that decline.The first is that demand for distillate/diesel soared. The fact that it had been lagging was somewhat of a mystery, given the strong trucking market. The "product supplied" figure for distillate/diesel rose to 4.175 million barrels/day in the week ending Oct. 9, the first time it had been above 4 million b/d since the second week of March. A year ago at this time, it was 4.36 million b/d.Second, refiners made a lot less of it. Since the collapse in air travel, refiners have been doing everything they can to not make too much jet fuel. They've largely succeeded; days cover for jet fuel had gotten up to more than 70 days but now is less than 40, which is even lower than distillate/diesel. But to get to that level, refiners needed to shift their distillate output away from jet and toward other distillates. Refiners have been trying through various means to not only reduce jet output but also to cut back distillate output as well. They succeeded in the first task. The second is harder. Put a barrel of crude through a refinery and you will get some level of distillate molecules. Cutting back on it can be a challenge.There was another fuel that refiners didn't want to make during the pandemic: gasoline. As a result, even during the height of the pandemic, distillate output topped 5 million b/d as every effort was made to reduce gasoline output when people weren't driving. That 5 million b/d figure for distillate is not a crazy high number normally but it is in the middle of a sharp economic contraction. However, the push to cut back on distillate output has succeeded. U.S. refiners in the week ended Oct. 9 produced 4.279 million b/d of distillates. That's the lowest number since 2013. It wasn't easy, but refiners took the steps to start making less distillate, as they already had done to make less jet fuel and less gasoline earlier. (With people driving again, refiners are back to making gasoline.)The end result: the six-day drop in U.S. days cover, created by a drop in inventories on the back of less output, and a decline in demand. But it is not just the U.S. In its latest monthly report, the International Energy Agency (IEA) said middle distillate inventories in Europe in September rose just 500,000 b/d. The five-year average is 9.3 million b/d. The result is a graph that showed that inventories are still above the five-year average but are no longer at historical highs. They've gotten down to levels closer to earlier highs, still excessive but not chart-busting. Source: International Energy AgencyIn Asia, the IEA reported that middle distillate inventories rose with historic norms. (Autumn tends to be a time in oil markets of inventory building as the world prepares for winter.)Although the decline in distillate inventories in the U.S. may have been historic, it hasn't yet resulted in a significant price reaction. The price of crude has bounced around in the last weeks but ultimately gone nowhere. Brent crude, the world's benchmark and the more relevant marker for comparison with diesel, was $43.15/barrel on Sept. 17. Last Friday, it settled at $43.32./bDuring that time, the front-month price of ultra low sulfur diesel on CME rose to $1.1791/gallon from $1.1598/g. That increased the spread of ULSD over Brent to 14.09 cts/ga from 12.8 cts g on Sept. 17.But by point of comparison, to show how much all that diesel inventory had held down prices relative to crude, the spread a year ago was about 53 cts/gallon. The current diesel to Brent spreads aren't sustainable. Diesel has not entered a permanent, long-term realignment against crude. If the move toward normalcy is going to start anytime soon, it could be that last week's numbers were the signal that it has begun.More articles by John KingstonGood news for diesel consumers, tough news for oil patch drivers in federal reportLabor Day, Roadcheck one-offs catch diesel traders by surpriseOOIDA scoffs at high cost estimates for broker transparencySee more from Benzinga * Options Trades For This Crazy Market: Get Benzinga Options to Follow High-Conviction Trade Ideas * FreightWaves CEO Interviewed On "The Business Of Content" Podcast * News Alert: US, Canada, Mexico Border Closures Extended To Nov. 21(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
It might be like cold water in the face to think that earnings don't matter. But these stocks have detached themselves from all metrics.
My wife and I co-signed her nephew’s student loans so he could attend a small private college. You loaned money to your nephew by co-signing his loan with the expectation that he would finish college, get a job and repay it. In other words, you co-signed the loan so your nephew would make the investment in his own future.
(Bloomberg) -- Intel Corp. agreed to sell its Nand memory unit to South Korea’s SK Hynix Inc. for about $9 billion, part of a broader effort by the U.S. chipmaker to concentrate on its main business.The Asian company will pay 10.3 trillion won for the Intel unit, which makes flash memory components for computers and other devices. The acquisition, which will take place in stages through 2025, includes Intel’s solid-state drive, Nand flash and wafer businesses, as well as a production facility in the northeastern Chinese city of Dalian. Hynix’s shares rose as much as 4.8% Tuesday morning.The deal will shore up the Korean corporation’s position in a business that’s boomed in the wake of Covid-19, which drove online activity and demand for internet computing. Hynix, Samsung Electronics Co. and Micron Technology Inc. together dominate the market for the memory chips used in everything from Apple Inc.’s iPhones to data centers.Intel has said for months it was exploring options for the flash group. Hynix however won’t be buying the Optane division, which develops chips that can permanently store data and read and write it faster than NAND -- if not faster than traditional DRAM. The product, which went on sale in 2018, was tested successfully by some large cloud providers and Alibaba Group Holding Ltd. used the technology to support its massive Singles’ Day sales. Bob Swan, Intel’s chief executive officer, described Optane as “something special” last year.The Korean company said it will pay Intel $7 billion before the end of 2021, then the rest by March 2025.Read more: Intel ‘Stunning Failure’ Heralds End of Era for U.S. Chip SectorThe acquisition also further streamlines Intel’s struggling empire. Since taking over in 2019, Swan has looked to sell several units that aren’t part of the company’s focus on processors for personal computers and servers.The Santa Clara, California-based company has delayed production of important upcoming chip lines and now lags behind some industry players in manufacturing technology. Its shares are down about 9% so far this year, while the benchmark Philadelphia Semiconductor Index is up almost 29%.Despite the delays, the company’s server group has been performing well. Shedding another non-core business could help Intel focus on fixing its chip technology woes.Intel unloaded its smartphone cellular modem group to Apple in 2019 and this year sold its home connectivity chips group to MaxLinear Inc. In July, the company said it was considering moving away from manufacturing its own chips, potentially benefiting contract producers such as Taiwan Semiconductor Manufacturing Co. and Samsung.Read more: Intel’s Latest Chip Push Suggests the Company Has a Short Memory(Updates with deal details from the second paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Markets thrive on risk, but risk is hard to talk about. It’s easy to fall back on cliches – buy low and sell high, or the bulls and bears make money while the pigs get slaughtered – but those cliches have drifted into common parlance for a reason. They have a grain of truth.Buying low and selling high has always been known as the way to make a profit, from the earliest days of human barter. And whether the market is moving up or down, whether investors follow a bullish or a bearish strategy, it’s possible to turn that profit.So, let’s talk about buying low. While the overall market has recovered nicely from the pandemic swoon of mid-winter, many stocks are still struggling with a depressed share value. Some of them are fundamentally sound – and Wall Street’s analysts have taking note.Using TipRanks database, we pinpointed three such stocks. Each is down at least 60% so far this year, but each also has a Strong Buy consensus rating and at least 40% upside potential for the coming months.Diamondback Energy (FANG)First up is Diamondback Energy, a Texas oil company that has been part of the Permian Basin boom which put Texas once again at the forefront of the North American oil industry. Diamondback is a smaller player in its industry and its operations are entirely within the Permian, where it is producing some 170,000 barrels of oil daily. While this number is up 40,000 barrels from the springtime, Diamondback has been hit hard by low oil prices in recent months and the stock is down 68% year-to-date.The low prices on the open oil market have impacted Diamondback’s bottom line, and earnings have been falling steadily from their $1.93 per share peak in 4Q19. The 1Q20 EPS was $1.45, while Q2 earnings came in at just 15 cents. The company is set to release third quarter figures on November 3, and the outlook calls for 37 cents – an improvement, but still down. However, it’s important to note here that Diamondback has beaten the earnings forecasts in the last three quarters.On a more positive note, company management points out that despite recent low earnings, FANG was able to end Q3 without touching its revolving credit facility – and that the company has over $2 billion in liquid assets available. Combined with rising production, this gives the company a solid footing.JPMorgan analyst Arun Jayaram, looking at the Texas oil sector and Diamondback’s place in it, sees the company as well-positioned to survive in a low-price environment. “We have consistently viewed FANG as one of the top-tier operators in the industry, and given the recent weakness in oil prices, the mgmt. team has made the prudent decision to sharply reduce activity levels. Given a focus on continuous cost reduction, we believe the company has the inventory depth and balance sheet strength to be a relative outperformer through the downturn,” Jayaram wrote.Jayaram rates FANG shares an Overweight (i.e. Buy), and his $48 price target suggests a 68% upside potential by next year. (To watch Jayaram’s track record, click here)Overall, the Strong Buy consensus rating on FANG is based on 11 recent Buys against a single Hold. The stock is selling for $28.58 per share, and its $52.10 average price target is even more bullish than Jayaram’s, implying an upside of 82%. (See FANG stock analysis on TipRanks)ChampionX Corporation (CHX)Next up is ChampionX, an oilfield technology company acquired its current name this past summer, through the merger of Apergy Corporation and ChampionX Holdings. The combined company kept Apergy’s trading history, and took on the new ticker, CHX. This is a midstream company with operations in the drilling, production, pipeline, and water technology segments of the oil industry. It’s a diversified portfolio of operations that gives ChampionX plenty of room to maneuver in a bearish oil market.ChampionX may need all of that maneuvering room, as the shares are down 76% this year. As with Diamondback, the chief culprit is low oil prices cutting into profit margins. Even though, as a midstream and service company, ChampionX does not directly pull the oil out of the ground and sell it, its operations are tied to the end users’ purchase price. In 2Q20, EPS turned sharply negative with a 43-cent per share net loss. This comes even as revenues rose in Q2, to $298 million.Scotiabank analyst Vaibhav Vaishnav sees CHX in a good place after improving its positioning as a services company.“With the merger with Ecolab’s Upstream business, CHX is now among the top two players in the production chemicals business. This business is relatively very stable as it focuses on production rather than drilling and completions activity. Essentially, daily U.S. or international oil production is the primary driver," Vaishnav opined. To this end, Vaishnav rates CHX an Outperform (i.e. Buy) rating. He gives the stock a $12 price target, indicating confidence in 48% upside growth for the coming year. (To watch Vaishnav’s track record, click here)Overall, CHX has 6 Buys and 1 Hold supporting its Strong Buy consensus rating. With a bullish average price target of $14.09, Wall Street’s analysts see a 73% upside potential from the current share price of $8.11. (See CHX stock analysis on TipRanks)Gol Linhas (GOL)From the oil industry, we move to the airline industry. It should come as no surprise that an airline, even a budget carrier, would face serious difficulties in the current environment of social distancing, trade and travel restrictions and disruptions, and economic shutdowns. Gol Linhas is Brazil’s premier low-cost air carrier, and the country’s third-largest airline. The difficulties facing the airline industry are apparent in GOL’s 62% share price decline since the start of the year.The hit Gol Linhas has taken is clear from the revenues and earnings. At the top line, the 17% sequential revenue drop in Q1 deepened to 88% in Q2, when the company brought in just $357 million. Quarterly revenues for GOL were above $3.8 billion before the corona crisis.The drop in revenue brought a serious loss in earnings. The company typically sees a drop off from Q4 to Q1 in earnings, and this year was no exception. The bright spot was, Q1 beat the forecast and beat the year-ago number. Q2, however, was disastrous, with an 81-cent EPS net loss. While not as deep as the $1.10 expected, it was a serious hit for the company. The outlook for Q3 is no better, at minus 80 cents.The long-term, however, looks better for this budget carrier. Deutsche Bank analyst Michael Linenberg sees GOL with several paths forward – although he believes that real returns will not come in until after 2021. "As we believe 2020 and 2021 will not be representative of GOL’s normal earnings potential, we are basing our 12-month PT on our 2022 forecast as GOL and the global airline industry begin to recover from the effects of COVID-19," the 5-star analyst noted.In line with this long-term optimism, Linenberg sets a $10 price target, implying an upside of 40% over the next 12 months. Accordingly, he rates the stock a Buy. (To watch Linenberg’s track record, click here)Wall Street agrees with Linenberg on the long-term potential here, and GOL’s Strong Buy consensus rating is based on a unanimous 5 Buys. (See GOL stock analysis on TipRanks)To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
Is Boeing stock a good buy now as coronavirus ravages aviation? Look at the aerospace giant's fundamentals and stock chart.
The report released on Monday showed registrations in California, a bellwether for the electric-car maker and its largest U.S. market, recovered from a second-quarter low of roughly 9,800 vehicles to around 16,200 vehicles in the three months ended September. California registration for Tesla's Model 3 mass-market sedan, which in the past accounted for more than half of total registrations, fell 60% on a yearly basis to 6,500.
Apple Inc.'s iPhone 12 launch hasn't driven much momentum for AT&T Inc. shares, which are on track for their lowest close in almost seven months.
Chipmaker Intel is nearing a deal to sell its memory-chip business to South Korea's SK Hynix for about $10 billion, the Wall Street Journal reported Monday. Intel stock rose on the news.
The recent coronavirus vaccine race has been fraught with setbacks. Both Astra Zeneca and Johnson & Johnson recently halted their respective COVID-19 vaccine programs due to a participant’s unexplained reactions.There appears to be no such trouble right now for a fellow pharma heavyweight seeking to be first to market with a viable solution.On Friday, Pfizer (PFE) said that based on interim data, by the end of October it hopes to find out whether its COVID-19 vaccine – developed in collaboration with BioNTech (BNTX) - is effective or not.Moreover, by mid-November it hopes to have enough safety and manufacturing data available to present to the FDA an Emergency Use Authorization (EUA) application.Mizuho analyst Vamil Divan calls the pace of Pfizer’s vaccine development “remarkable.”“We commend the management team for their transparency during this accelerated development program,” Divan said. “Overall, things appear very much on track and the speed in potentially getting this vaccine to market is much faster than we would have expected when the pandemic started... The speed with which Pfizer has moved to develop this vaccine candidate is encouraging to us, and suggests Pfizer may be able to meet its stated objectives of being a faster moving, more nimble biopharmaceutical company, especially once the pending sale of their Upjohn division is completed.”Divan estimates the vaccine could generate sales of $2 billion in 2020-2021 combined, before sales decrease to between $550-600 million from 2024 onwards.However, with various deals similar to the one with the US government in place with several developed countries, pending regulatory approval, sales could actually exceed $8.5 billion between 2020-2021.The additional sales, Divan notes, “would still be meaningful even to a company of Pfizer's size and would provide Pfizer with additional options in terms of investing in their business, pursuing acquisition or licensing opportunities, or returning cash to shareholders.”Overall, Divan has a Buy rating on PFE shares alongside a $43 price target. What’s in it for investors? A ~14% upside from current levels. (To watch Divan’s track record, click here)Overall, based on 3 Buys and 8 Holds, the analyst consensus rates the stock a Moderate Buy. With an average price target of $41.21, the analysts except shares to add 9% in the months ahead. (See Pfizer stock analysis on TipRanks)To find good ideas for healthcare stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
The current day trading boom will end as these frenzies always do: in tears. While we wait for the inevitable crash, let’s review not only why day traders are doomed but also why most people shouldn’t trade, or even invest in, individual stocks. Day trading basically means rapidly buying and selling investments, hoping to profit from small price fluctuations.
At some point over the next century, the stock market will lose more than 20% of its value in a single day. Maybe this doesn’t seem like useful advice, but the fact is that you’re kidding yourself if you think market crashes of such magnitude won’t happen again. This sobering thought coincides with the 33rd anniversary of the 1987 U.S. stock market crash.
If you have any old-fashioned “value” or “equity income” funds in your 401(k), IRA or other retirement accounts, right about now you may be asking yourself, or your financial adviser, some very awkward questions. Strategists divided the stock market cleanly into “value” and “growth” halves. Morningstar (MORN) the fund-research company, says the average U.S. large company “value” mutual fund has lost 8% so far this year, even including reinvested dividends.
Stock in the Chinese electric-vehicle maker was on fire last week, leaving some on Wall Street wondering what happened and investors wondering what comes next.
Although Americans typically assume they will retire when they want, and on their own terms, many are in for a surprise
While the wealthy and corporations might have to reach deeper into their pockets to pay Uncle Sam, tax-exempt municipal bonds could emerge as a big winner.
Shares of Kaixin Auto Holdings Inc. skyrocketed 257.5% on massive volume in afternoon trading Monday, to extend the stretch of volatile trading that started last week despite the lack of news announced by the China-based operator of auto dealers. Trading volume exploded to 184.0 million shares, which was already more than triple the previous one-day record for volume of 60.6 million on Oct. 14, and enough to make the stock the most actively traded on the Nasdaq exchange. The company did not immediately respond to a request for comment. The stock has now gained 1,270.3% over the past four sessions. It ran up 55.6% on volume of 55.1 million shares on Friday, tumbled 32.8% on volume of 6.3 million shares on Thursday and soared 266.7% on volume of 60.6 million on Wednesday. In the company's last filing with the Securities and Exchange Commission on Aug. 26, the company said after reexamining its business model it has decided to halt its used-car dealership operations, meaning second-quarter revenue will be "significantly lower" than in prior periods, and that "it may not have meaningful revenue starting in the third quarter of 2020." The stock had closed at a record low of 41 cents on Sept. 8. With the recent rally, the stock has now climbed 295.7% year to date, while the iShares MSCI China ETF has advanced 21.4% and the S&P 500 has gained 7.4%.
With Tesla Inc (NASDAQ: TSLA) scheduled to report third-quarter results Wednesday, an analyst at Wedbush is optimistic that the electric vehicle giant will outperform expectations.The Tesla Analyst: Daniel Ives maintained a Neutral rating on Tesla shares and increased the price target from $475 to $500.The Tesla Thesis: The focus is likely to be on Tesla's level of third-quarter profitability and the unit growth trajectory into the fourth quarter, Ives said in a Monday note. The company is poised to report a bottom-line beat, helped by manufacturing efficiency and shining Giga3 success in China, the analyst said.Full-year deliveries are on track to hit the company's guidance of 500,000, as Tesla navigated the unprecedented COVID-19 backdrop, he said. "We believe with a strong 4Q that Tesla will be on a pace to hit the 500k threshold as pent up China demand and pockets of strength within Europe remains the linchpin to the demand resurgence that Musk & Co. have seen over the past few quarters," Ives said. Related Link: What To Expect When Tesla's Q3 Report Drops Next Week View more earnings on TSLAWith China expected to account for over 40% of Tesla's global sales potentially by early 2022, Tesla's profitability profile will improve, as Model 3s sold in China have higher margins, the analyst said.Along with more leverage on the horizon out of Giga 3, more price cuts both in the U.S. and China could stimulate demand further, he said. "Steady profitability after years of red ink has been the 'hearts and lungs' to the bull thesis on the Street and a key ingredient in the stock's performance this year." The overall EV market is still in the early days of playing out globally, according to Wedbush.Tesla is in a formidable position to maintain its leadership position despite competitors coming from every angle globally, Ives said. TSLA Price Action: Tesla shares were down 0.49% at $437.53 at last check Monday. Related Link: Tesla Analyst Sees Disconnect Between Share Price, EV Company's Fundamentals Photo courtesy of Tesla. Latest Ratings for TSLA DateFirmActionFromTo Oct 2020WedbushMaintainsNeutral Oct 2020Morgan StanleyMaintainsEqual-Weight Oct 2020Goldman SachsMaintainsNeutral View More Analyst Ratings for TSLA View the Latest Analyst Ratings See more from Benzinga * Options Trades For This Crazy Market: Get Benzinga Options to Follow High-Conviction Trade Ideas * Tesla Battery Supplier LG Chem Preannounces 159% Profit Growth * Tesla Analyst Sees Disconnect Between Share Price, EV Company's Fundamentals(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.