Marketmind: Move over Evergrande, Time to Watch Soaring Bond Yields

A look at the day ahead from Saikat Chatterjee.

European and U.S. stock futures fluctuated between gains and losses after U.S. stocks posted their biggest two-day rise since July.

While a large part of those gains can be attributed to easing concerns about Evergrande contagion, Thursday’s spike in yields in the global $60 trillion plus government debt markets raised the prospects of tighter monetary policy sooner than later.

Long-term U.S. Treasury yields have surged the most in 18 months as traders brought forward expectations for the first Fed rate hike to the end of 2022 and the Bank of England opened the door to a 2021 rate increase — sparking the biggest jump in two-year UK gilt yields since March 2015.

Yield curves from Australia to Germany bear steepened in response and the dollar sprung to the top of its 2021 trading range. While it remains to be seen whether the rise in yields can be sustained, some signs of weakness can be detected in the “buy the dip” trade from investors.

Value stocks, a beneficiary of higher yields, outperformed growth ones on Thursday while FAANG stocks have underperformed broader markets so far this month. And if investors are hoping quiet weekend, think again.

Sunday’s election in powerhouse European economy Germany will provide food for thought as Chancellor Angela Merkel steps down after 16 years in charge.

Her successor will play a new role in shaping domestic and broader EU policy and have to steer Germany’s economy through a still uncertain post-COVID environment.

Thursday’s flash PMIs for September pointed to a sharp slowdown in economic activity from the previous month from rising energy prices and difficulty in sourcing parts and materials, headwinds that are unlikely to abate in the coming days.

Key developments that should provide more direction to markets on Friday:

– ECB’s Lagarde says many causes of inflation spike temporary: CNBC

– Nike warns on holiday delays, cuts full-year sales estimate

– Daimler’s Mercedes-Benz to take a 33% stake in battery cell manufacturer Automotive Cells Company

– Germany’s IFO survey for September

– Fed speaker corner: Powell, Clarida

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Saikat Chatterjee; Editing by Dhara Ranasinghe)

Apple’s iPhone Privacy Update Is The Reason Why Facebook Underreported Ad Performance

Facebook has admitted that it has underreported ad performance due to the recent privacy changes implemented by Apple.

Apple’s Changes Affected Facebook’s Ads Performance Report

The social media giant Facebook has revealed earlier today that it underreported ad performances due to the recent privacy changes Apple made to its iPhones. Facebook said the privacy changes affected the performance it was reported to iPhone users.

In a blog post published earlier today, the social media giant admitted that it underreported web conversions on Apple’s iOS by roughly 15% in the third quarter of the year. The company added that there is a wide range of reports for different advertisers.

Graham Mudd, Facebook’s VP of product marketing, stated that they believe that the real world conversions, like sales and app installs, were much higher than what was reported to numerous advertisers.

“As we noted during our earnings call in July, we expected increased headwinds from platform changes, notably the recent iOS updates, to have a greater impact in the third quarter compared to the second quarter. We know many of you are experiencing this greater impact as we are,” Facebook added.

Facebook CFO David Wehner had previously warned of the potential effect of the iOS changes during the company’s last earnings call in July. Apple’s privacy changes gave iPhone and iPad users the choice to decide whether to opt in to be tracked when they first launch an app. This has affected businesses like Facebook that depend on specialized tracking to deliver more personalized ads to the users.

Facebook’s Stock Price Down By 4%

Mudd said he is optimistic about Facebook’s multi-year effort to put in place new privacy-enhancing technologies. These technologies are expected to minimize the amount of personal information Facebook processes while allowing the social media giant to show personalized ads and measure their effectiveness.

FB stock chart. Source: FXEMPIRE

The shares of Facebook are down by 4% since the company published the blog post earlier today. FB is trading at $342 per share, down from the $349 it was trading when the market opened a few hours ago.

YTD, FB has still performed excellently. FB started 2021 trading at $268 per share but is now up over 30%. It is one of the best-performing tech stocks so far this year.

Wall Street Ends Sharply Lower in Broad Sell-Off

The Nasdaq fell to its lowest level in about a month, and Microsoft Corp, Alphabet Inc, Amazon.com Inc, Apple Inc, Facebook Inc and Tesla Inc were among the biggest drags on the index as well as the S&P 500.

All 11 major S&P 500 sectors were lower, with economically sensitive groups like energy down the most.

Investors also were nervous ahead of the Federal Reserve’s policy meeting this week.

The banking sub-index dropped sharply while U.S. Treasury prices rose as worries about the possible default of Evergrande appeared to affect the broader market.

“You kind of knew that when there was something that caught markets off guard, that it was going to lead to probably a bigger sell-off and you didn’t know what the reason would be,” said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute.

“I guess it’s the China news but… it’s not altogether surprising given how bullish people were.”

Wednesday will bring the results of the Fed’s policy meeting, where the central bank is expected to lay the groundwork for a tapering, although the consensus is for an actual announcement to be delayed until the November or December meetings.

Unofficially, the Dow Jones Industrial Average fell 620.22 points, or 1.79%, to 33,964.66, the S&P 500 lost 75.28 points, or 1.70%, to 4,357.71 and the Nasdaq Composite dropped 325.95 points, or 2.17%, to 14,718.02.

The S&P 500 is down sharply from its intra-day record high hit on Sept. 2 and is on track to snap a seven-month winning streak.

Strategists at Morgan Stanley said they expected a 10% correction in the S&P 500 as the Fed starts to unwind its monetary support, adding that signs of stalling economic growth could deepen it to 20%.

The CBOE volatility index, known as Wall Street’s fear gauge, rose.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Caroline Valetkevitch in New York; additional reporting by Devik Jain and Sagarika Jaisinghani in Bengaluru and by Noel Randewich in San Francisco; Editing by Sriraj Kalluvila and Lisa Shumaker)

Wall Street Ends Lower, Weighed Down by Big Tech

Investors have become more cautious following Friday’s weak August payrolls data, while pressures from rising costs, despite the economy slowing, have increased concerns that the Fed could move sooner than expected to scale back massive monetary measures enacted last year to shield the economy from the coronavirus pandemic.

The U.S. economy “downshifted slightly” in August as concerns grew over how the renewed surge of coronavirus cases would affect the economic recovery, the Fed said on Wednesday in its latest Beige Book compendium of anecdotal reports about the economy.

The S&P 500 has dipped less than 1% from its record closing high last Thursday, and it remains up 20% year to date, buoyed by the Fed’s accommodative monetary policy.

“Investors are pulling petals from a daisy, saying, ‘The economy will grow, the economy won’t grow,'” said Sam Stovall, chief investment strategist at CFRA. “They can’t make up their minds, so they have not commitment to long-term positions.”

St. Louis Federal Reserve Bank President James Bullard told the Financial Times that the Fed should move forward with a plan to trim its pandemic stimulus program despite a slowdown in job growth.

Six of the 11 S&P 500 sector indexes fell, with materials and energy the deepest decliners, down over 1% each.

The Dow Jones Industrial Average fell 0.2% to end at 35,031.07 points, while the S&P 500 lost 0.13% to 4,514.07.

The Nasdaq Composite dropped 0.57% to 15,286.64.

Perrigo Company Plc jumped 9% after the drugmaker said it plans to buy HRA Pharma from investment firms Astorg and Goldman Sachs Asset Management in a deal valued at 1.8 billion euros ($2.13 billion).

Cryptocurrency exchange Coinbase Global Inc fell 3.2% after the U.S. securities regulator threatened to sue the firm if it goes ahead with plans to launch a crypto lending scheme.

U.S. payments giant PayPal Holdings Inc declined 2.7% after it said it would acquire Japanese buy now, pay later firm Paidy in a $2.7 billion largely cash deal.

Volume on U.S. exchanges was 9.5 billion shares, compared with the 9.1 billion average for the full session over the last 20 trading days.

Declining issues outnumbered advancing ones on the NYSE by a 1.71-to-1 ratio; on Nasdaq, a 2.18-to-1 ratio favored decliners.

The S&P 500 posted 32 new 52-week highs and 1 new lows; the Nasdaq Composite recorded 55 new highs and 41 new lows.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Noel Randewich; Additional reporting by Shashank Nayar and Medha Singh in Bengaluru; Editing by Anil D’Silva, Aurora Ellis and Arun Koyyur)

Nasdaq Ekes Out Record Finish as Wall St Ends Higher

The energy sector rose, reversing most of the losses suffered during the first three days of the week. Thursday’s performance was fueled by U.S. crude prices jumping 2% on a sharp decline in U.S. inventories and a weaker dollar.

Cabot Oil & Gas Corp and Occidental Petroleum Corp were among the largest risers, with oil majors Exxon Mobil and Chevron Corp also posting solid gains.

The technology index slipped into negative territory, as some of the industry’s largest companies saw their recent upward momentum stall.

Amazon.com Inc, Microsoft Corp, Facebook Inc and Google-owner Alphabet Inc were all under water. A notable exception was Netflix Inc, which hit an all-time high intraday.

U.S. stocks have regularly hit record highs over the past few weeks as a solid corporate earnings season and hopes of continued central bank support underpinned confidence as data showed the country’s post-pandemic economic growth was beginning to slow.

Data on Thursday showed the number of Americans filing new claims for jobless benefits fell last week, although the focus will be on the Labor Department’s monthly jobs report on Friday to set the stage for the Fed’s policy meeting later this month.

The report is likely to show job growth slowed to 750,000 in August from 943,000 the previous month.

“You have to see very wide beats or misses in this data to really change people’s minds,” said Greg Boutle, U.S. head of equity and derivative strategy at BNP Paribas.

“Investors are either in this renormalization camp that thinks inflation will not happen, or they believe there will be some persistence to inflation. Really, it will be a collection of beats or misses that will move the needle for investors and the Fed, rather than a single data point.”

Unofficially, the S&P 500 gained 12.92 points, or 0.29%, to end at 4,537.01 points, while the Dow Jones Industrial Average  gained 129.38 points, or 0.37%, to 35,441.91. The Nasdaq Composite  rose 21.15 points, or 0.14%, to 15,330.53.

Despite deadly flash floods in New York City, trading on Wall Street was operating normally.

Wells Fargo rose after three straight sessions of losses. The lender had been weighed by a report it could face further regulatory sanctions over the pace of compensating victims of a years-long sales practice scandal.

Contracting services company Quanta Services Inc jumped to a record high after saying it would buy privately held Blattner Holding Company in a deal valued at about $2.7 billion.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Shashank Nayar in Bengaluru and David French in New York; Editing by Aditya Soni and Lisa Shumaker)

Wall Street Boom or Bubble? Don’t Blame It All on the Fed: Jamie McGeever

It is undeniable that trillions of dollars of asset purchases and years of official interest rates of zero and 10-year bond yields barely above 1% have boosted stock prices.

But the significance of Fed actions are overstated.

The tech-heavy composition of Wall Street, which benefits more from low interest rates and plain old stronger economic growth, are adding fuel to the U.S. stock surge. And the Fed’s large balance sheet expansion is nowhere near the European Central Bank or Bank of Japan’s.

Look no further than Wall Street: The S&P 500 has more than doubled from its COVID low of March last year, chalking up 51 record highs this year.

According to Ryan Detrick, chief market strategist at LPL Financial in Charlotte, North Carolina, only 1964 and 1995 had more than 50 new highs by the end of August. He reckons the S&P 500 could make 78 new highs this year, eclipsing the all-time record of 77 set in 1995.

On a 12-month forward earnings valuation basis, the S&P 500 earlier this year was its most expensive since 1999, just before the tech bubble burst. This price/earnings ratio has since drifted lower. But it is still above 20, which is unfamiliar territory for most of the last two decades.

Official interest rates and ultra-low benchmark bond yields make investing in profitable, cash-generating companies an attractive proposition. To some investors desperate for return, riskier stocks are a no-brainer.

Many argue there is a natural consequence of the Fed doubling the size of its balance sheet to $8.3 trillion since the pandemic outbreak.

As a share of GDP, that is now around 40%.

With stocks and other financial assets mostly in the hands of society’s better off, critics say U.S. monetary policy is widening the gap between rich and poor and directly exacerbating wealth inequality.

The world’s second and third largest central banks, meanwhile, have also ramped up their pandemic-fighting asset purchases. Their balance sheets, as a share of GDP, are far bigger than the Fed’s. Yet stock markets and valuations in the euro zone and Japan are nowhere near as high.

“The commonly held narrative centers on the Fed, and if everyone believes that, then it is self-reinforcing,” said Meb Faber, co-founder and chief investment officer at Cambria Investments in El Segundo, California.

“But there is a limit as to how far you can extrapolate that.”

The ECB has grown its balance sheet to $9.5 trillion since the outbreak of the pandemic. The ECB’s balance sheet is now worth more than 60% of euro zone GDP.

Similarly, the Bank of Japan has grown its balance sheet by $1.4 trillion since March 2020 to $6.6 trillion, around 120% of GDP.

Yet the euro Stoxx 50 is up ‘only’ around 65% from the COVID low, and is still 23% below its record high from March 2000. Euro stocks’ 12-month forward price/earnings ratio is around 16.

Japan’s Topix is up 55% from the COVID low and has a forward multiple of around 13.

Both figures, again, are significantly below their U.S. equivalents, suggesting factors other than central bank largesse are behind Wall Street’s surge.

For one, the U.S. equity market is far more tech- and digital-heavy than its global peers.

A world of zero interest rates benefits tech companies disproportionately because a low discount rate inflates future cash flows for companies where cutting edge innovation is likely to fuel faster growth. By any measure, the big five tech ‘FAANG’ stocks – Facebook, Amazon, Apple, Netflix and Google – dominate Wall Street. They have risen more than three times the broader S&P 500 in the last five years and their $7 trillion market cap is 21% of the whole index.

Another is good old-fashioned economic growth.

Some of the more bullish U.S. forecasts have been trimmed recently, but the International Monetary Fund expects 7.0% GDP growth in the United States this year, 4.6% in the euro zone, and just 2.8% in Japan.

On top of that, Corporate America is motoring along nicely.

LPL Financial’s Detrick notes that some 85% of S&P 500 companies posted second quarter earnings beats. And 2021 consensus earnings per share estimates are for a 43% jump from last year.

“The Fed backstop helps explain why people are willing to pay higher multiples. But higher earnings are higher earnings, and that justifies a lot. Investors still see better opportunity in the U.S., and are willing to pay that premium,” he said.

For a look at all of today’s economic events, check out our economic calendar.

(By Jamie McGeever; Editing by Edward Tobin)

How Options Are Fueling The Markets

First, let’s look at the covid crisis and how it played a role. As a result of the shutdowns, the FED took a really aggressive stance with its quantitative easing measures.  Lots of money printing to pay for massive stimulus payouts.  The worse news we hear historically is that the markets will react sharply to the downside.

In this market, they did the opposite because many in the market viewed the bad news as a sign the FED will keep its foot on the gas with their aggressive quantitative easing.  The markets love this as they see it as huge economic growth with less risk, even when things were shut down.  Many people were at home and had nothing to do but spend their stimulus money.  The markets loved this.  That is why we saw massive growth in AMZN, FB, GOOGL, and MSFT.  Other stocks favored from staying at home were ZM, NFLX, and TTD.

Now how do options fuel the markets?  Well, when an underlying stock has options there is a secondary derivative market that has its own supply and demand outside of the stock.  This can cause market makers to balance those demands.  How do they do this?

They do this by taking the difference of the total contracts bought and sold and adjust accordingly.  So for example let’s look at SPX.  In the below picture you can see Put volume is roughly half the call volume.  In this case, the market maker would engage in an activity called delta hedging where they would buy shares of stock to offset the difference between the Put and Call contract volume.  Since the market maker is only interested in the arbitrage between the bid and ask of these contracts, they want to stay delta neutral or, in other words, not be affected by stock price movement.

When they buy to offset, this can drive the price of an underlying stock up.  This is one reason why so many traders watch unusual options activity.

Every day on  Options Trading Signals we do defined risk trades that protect us from black swan events 24/7.  Many may think that is what stop losses are for.  Well, remember the markets are only open about 1/3 of the hours in a day.  Therefore, a stop loss only protects you for 1/3 of each day.  Stocks can gap up or down.  With options, you are always protected because we do defined risk in a spread.  We cover with multiple legs which are always on once you own.

Enjoy your day!

For a look at all of today’s economic events, check out our economic calendar.

Chris Vermeulen
Founder & Chief Market Strategist
www.TheTechnicalTraders.com

 

Best Growth Stocks September 2021

Oftentimes, that can be institutional activity. We’ll go over what that looks like in a bit. But, the 5 stocks we see as long-term candidates are ALGN, SEDG, ILMN, VEEV, & FB.

For MAPsignals, we believe that Big Money trading can alert you to the forward fundamental picture of a stock. We want the odds on our side when looking for the highest quality stocks.

Up first is Align Technology, Inc. (ALGN), which is the leader in invisible braces.

Strong growth candidates tend to have strong performance. Check out ALGN:

  • 1-year performance (+126%)
  • 1-year outperformance vs. healthcare ETF (+89.33% vs. XLV)
  • Historical big money signals

Just to show you what our Big Money signal looks like, have a look at the top buy signals Align Technology has made the past few years.

Blue bars are showing that ALGN was likely being bought by a Big Money player according to MAPsignals.

When you see a lot of them, I call it the stairway to heaven:

Chart, histogramDescription automatically generated
Source: www.MAPsignals.com

But, what about fundamentals? As you can see, Align’s revenue numbers have been strong:

  • 3-year sales growth rate (+19.52%)
  • 3-year earnings growth rate (+129.65%)

Next up is SolarEdge Technologies, Inc. (SEDG), which is a solar semiconductor firm.

Check out these technicals for SEDG:

  • 1-year performance (+39%)
  • 1-year performance vs. technology ETF (+2.12% vs. XLK)
  • Historical big money signals

Let’s look long-term. These are the top buy signals SolarEdge has made since 2015. Clearly the Big Money has been consistent for years:

Chart, histogramDescription automatically generated
Source: www.MAPsignals.com

Let’s look under the hood. As you can see, SolarEdge has grown revenues massively:

  • 3-year sales growth rate = +36.28%
  • 3-year earnings growth rate = +13.85%

Another growth name is Illumina, Inc. (ILMN), which is a sequencing and genomic analysis company.

Strong candidates for growth usually have big money buying the shares. Illumina has that. Also, the stock has been a rocket:

  • 1-year performance (+43%)
  • 1-year outperformance vs. healthcare ETF (+15.44% vs. XLV)

Below are the big money signals Illumina has made since 2015. That’s juice!

Chart, histogramDescription automatically generated
Source: www.MAPsignals.com

Now let’s look under the hood. Illumina’s sales growth is impressive. I expect more growth in the coming years:

  • 3-year sales growth rate = +6.27%
  • 3-year earnings growth rate = 0%

Number 4 on the list is Veeva Systems, Inc. (VEEV), which is a cloud-based software firm for the life sciences industry.

Here are the technicals important to me:

  • 1-year performance (+29.17%)
  • 1-year outperformance vs. healthcare ETF (+1.37% vs. XLV)
  • Historical big money signals

Below are the big money signals for VEEV since 2015:

Chart, histogramDescription automatically generated
Source: www.MAPsignals.com

Let’s look under the hood. Veeva Systems has been growing nicely:

  • 3-year sales growth rate = +28.83%
  • 3-year earnings growth rate = +36.47%

Our last growth candidate is Facebook, Inc. (FB), which is a social media giant.

Check out these technicals:

  • 1-year performance (+37.49%)
  • 1-year outperformance vs. technology sector (+.16% vs. XLK)
  • Historical big money signals

Facebook is a Big Money favorite…we call that an outlier:

Chart, histogramDescription automatically generated
Source: www.MAPsignals.com

Now look at these juicy growth numbers:

  • 3-year sales growth rate = +28.52%
  • 3-year earnings growth rate = +27.3%

The Bottom Line

ALGN, SEDG, ILMN, VEEV, & FB represent top growth stocks for September 2021. Strong fundamentals and big money buy signals make these stocks worthy of extra attention.

To learn more about MAPsignals’ Big Money process please visit: www.mapsignals.com

Disclosure: the author holds long positions in ILMN in personal accounts. He holds no positions in ALGN, SEDG, VEEV & FB at the time of publication.

Investment Research Disclaimer

Cautious Fed Hurting The Buck

FOMC wait-and-see mode remains

Chair Powell and his fellow policymakers acknowledged that economic activity indicators have continued to strengthen and the economy has made progress towards its goals of price stability and maximum employment. But especially on employment, there is still some way to go for the recovery to be substantial enough to start tapering asset purchases. Inflation is still seen as transitory but is not broadly based and Chair Powell specified that one-off price rises, even if they are not reversed, are no sustained inflation.

Many in the markets are touting the Jackson Hole symposium at the end of next month as the big date for more taper detail. But, with only one NFP jobs report next week to be released before then, is that enough information for the Fed to shift their bias? There are then three FOMC meetings left in the year in September, November and December.

China soothes equity jitters

Equities finished mixed in the US with tech outperforming. Facebook beat earnings expectations but warned of a significant growth slowdown and the stock fell as much as 5% in extended trading. European bourses have started the morning in the green after China took steps to calm recent investor fears which helped the Hong Kong market gain over 3%.

Gold enjoying dollar woes

With the hawks disappointed after the FOMC meeting, dollar selling is helping to push gold out of its recent range. The bullish break is now within touching distance of the widely watched 200-day moving average at $1,822. A strong close above here should see the July highs at $1,829/34 come into view fairly quickly. Solid support sits at $1,789.

Gold chart

By Lukman Otunuga, FXTM Senior Research Analyst

For more information, please visit: FXTM

Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Today’s Market Wrap Up and a Glimpse Into Thursday

Stocks finished the day mixed after the Fed revealed that the economy is on track for employment and inflation. The Dow Jones Industrial Average and S&P 500 were each down fractionally, while the tech-heavy Nasdaq added 100 points to end modestly higher.

As the economy continues on the path to recovery, the Fed tipped its hand, saying it would begin to pull back from its asset purchasing activity. The major indices still remain close to all-time high levels.

One winner in the Dow was Boeing, which surprised Wall Street by swinging to a profit for the first time almost in two years.

Stocks to Watch

The tech earnings parade rolled on, with Facebook taking the spotlight today. Mark Zuckerberg’s company sees 3.51 billion people flock to its platforms,  including Facebook, Instagram, Messenger and Whatsapp, each month, up 12% YoY.

Facebook’s Q2 revenue came in at USD 29.08 billion, continuing a trend that Google, Microsoft and Apple similarly experienced in the quarter. While Facebook’s Q2 results topped Wall Street’s estimates, revenue growth is not expected to be sustained at these levels, the company warned.

PayPal bucked the positive trend in corporate America after its Q2 results disappointed. Worse, the payments company isn’t expecting things to get much better for Q3. Investors punished the stock in extended hours, sending shares lower by about 6%.

Ford shares found a reason to rally thanks to a stronger than expected Q2 in which the company was profitable. The automaker lifted its Q3 forecast on the heels of robust demand for its Ford Bronco SUV.

Shares of cannabis company Tilray climbed more than 25% in the wake of a profitable fiscal Q4. Tilray CEO Irwin Simon sees a world in which marijuana will become legalized at the federal level in the U.S. in the next 18-24 months.

Look Ahead

On Thursday, an advance look at GDP comes out at 8:30 a.m. ET. Wells Fargo economists predict that the economy grew at an annualized pace of 9.1% in the quarter. The economy has come a long way since last year’s pandemic-fueled contraction, which lasted for two months. The economists forecast that consumer spending and business investments were strong in Q2, while supply chain constraints persisted.

Amazon’s earnings come out on Thursday. Bitcoin investors might be listening to the call to hear if the company addresses the recent crypto-related drama.

Facebook Stock Is A Big Money Magnet

So, what’s Big Money? That’s when a stock goes up in price alongside chunky volumes. It’s indicative of institutions betting on the shares.

Smart money managers are always looking for the next hot stock. And Facebook has many fundamental qualities that are attractive.

This sets up well for the stock going forward. But how the stock is trading points to more upside. As I’ll show you, the Big Money has been consistent in the shares the last year.

You see, fund managers are always looking to bet on the next outlier stocks…the best in class. They spend countless hours sizing up companies, reading reports, speaking to analysts…you name it. When they find a company firing on all cylinders, they pounce in a big way.

That’s why I’ve learned how critical it is to gauge Big Money demand for shares. To show you what I mean, have a look at all the big money signals FB has made the last year.

The last few days has seen Big Money activity, too. Each green bar signals big trading volumes as the stock ramped in price. Red signals are showing big selling in the shares:

ChartDescription automatically generated
Source: www.mapsignals.com

In 2021, the stock has steadily gained. Year to date, FB made 11 of these rare green signals. These came after a big selloff earlier this year when growth stocks were under pressure. Generally speaking, recent green bars could mean more upside is ahead.

Now, let’s check out technical action grabbing my attention:

  • YTD outperformance vs. technology ETF (+16% vs. XLK)

Outperformance is huge for leading stocks.

Next, it’s a good idea to check under the hood. Meaning, I want to make sure the fundamental story is strong too. As you can see, Facebook has been growing revenues and earnings rapidly. Take a look:

  • 3-year sales growth rate (+28.52%)
  • 3-year earnings growth rate (+27.3%)

Marrying great fundamentals with technically superior stocks is a winning recipe over the long-term.

In fact, Facebook has been a top-rated stock at my research firm, MAPsignals, dozens of times the last few years. That means the stock has buy pressure, strong technicals, and growing fundamentals. We have a ranking process that showcases stocks like this on a weekly basis.

FB has been a Big Money favorite since 2013 (live and backtested data). And since it last appeared on this report back on 8/27/2013, it’s up 832%. The blue bars below are the times that Facebook was a top pick:

Chart, histogramDescription automatically generated
Source: www.mapsignals.com

I wouldn’t be surprised if Facebook makes additional appearances in the years to come. Let’s tie this all together.

Facebook continues to fire on all cylinders technically alongside growing sales and earnings. I like the long-term story of the stock.

The Bottom Line

The Facebook rally could have further to go. Big money buying in the shares is signaling to take notice. Shares could be positioned for further upside. Given the historical gains in share price and strong fundamentals, this stock could be worth a spot in a growth-oriented portfolio.

Disclosure: the author holds no position in FB at the time of publication.

Learn more about the MAPsignals process here.

Disclaimer

Facebook and Tech Giants to Target Manifestos, Militias in Database

(Corrects to show 14 not 15 companies can access GIFCT database in paragraph 9)

By Elizabeth Culliford

Until now, the Global Internet Forum to Counter Terrorism’s (GIFCT) database has focused on videos and images from terrorist groups on a United Nations list and so has largely consisted of content from Islamist extremist organizations such as Islamic State, al Qaeda and the Taliban.

Over the next few months, the group will add attacker manifestos — often shared by sympathizers after white supremacist violence — and other publications and links flagged by U.N. initiative Tech Against Terrorism. It will use lists from intelligence-sharing group Five Eyes, adding URLs and PDFs from more groups, including the Proud Boys, the Three Percenters and neo-Nazis.

The firms, which include Twitter and Alphabet Inc’s YouTube, share “hashes,” unique numerical representations of original pieces of content that have been removed from their services. Other platforms use these to identify the same content on their own sites in order to review or remove it.

While the project helps combat extremist content on mainstream platforms, groups can still post violent images and rhetoric on many other sites and parts of the internet.

The tech group wants to combat a wider range of threats, said GIFCT’s Executive Director Nicholas Rasmussen in an interview with Reuters.

“Anyone looking at the terrorism or extremism landscape has to appreciate that there are other parts…that are demanding attention right now,” Rasmussen said, citing the threats of far-right or racially motivated violent extremism.

The tech platforms have long been criticized for failing to police violent extremist content, though they also face concerns over censorship. The issue of domestic extremism, including white supremacy and militia groups, took on renewed urgency following the deadly Jan. 6 riot at the U.S. Capitol.

Fourteen companies can access the GIFCT database, including Reddit, Snapchat-owner Snap, Facebook-owned Instagram, Verizon Media, Microsoft’s LinkedIn and file-sharing service Dropbox.

GIFCT, which is now an independent organization, was created in 2017 under pressure from U.S. and European governments after a series of deadly attacks in Paris and Brussels. Its database mostly contains digital fingerprints of videos and images related to groups on the U.N. Security Council’s consolidated sanctions list and a few specific live-streamed attacks, such as the 2019 mosque shootings in Christchurch, New Zealand.

GIFCT has faced criticism and concerns from some human and digital rights groups over censorship.

“Over-achievement in this takes you in the direction of violating someone’s rights on the internet to engage in free expression,” said Rasmussen.

The group wants to continue to broaden its database to include hashes of audio files or certain symbols and grow its membership. It recently added home-rental giant Airbnb and email marketing company Mailchimp as members.

(Reporting by Elizabeth Culliford in New York; Editing by Kenneth Li and Lisa Shumaker)

Microsoft Overbought and Overloved

Dow component Microsoft Corp. (MSFT) reports fiscal Q4 2021 earnings after Tuesday’s closing bell, with analysts forecasting a profit of $1.92 per-share on $44.3 billion in revenue. If met, earnings-per-share (EPS) will mark a 31% profit increase compared to the same quarter last year. The stock sold off nearly 3% in April despite beating Q3 expectations by wide margins and raising Q4 guidance. Buyers returned in June, lifting the tech giant into a series of all-time highs.

Overbought Signals Abound

Microsoft should post exceptionally strong results, as usual, but the stock has gained nearly 19% in the last seven weeks, setting off technically overbought signals. In addition, Mr. Softee has been named as a target by Biden administration trust-busters, even though it has avoided the broad swath of political controversy, unlike Facebook Inc. (FB) and Amazon.com Inc. (AMZN). Even so, its huge footprint has made it nearly impossible for small companies to compete, especially in the cloud computing segment.

Citigroup analyst Tyler Radke raised the firm’s target to $378 last week, noting “We expect to see a strong finish to Microsoft’s FY21 with a combination of recovering IT budgets, an uptick in expected reseller growth, signs of reacceleration in consumption models and slightly higher PC numbers vs. 3 months ago. The general numbers set-up looks attractive with conservative guidance against easy compares. We continue to like MSFT best in mega-cap software, with multiple levers for sustained DD growth at scale and significant room to run”.

Wall Street and Technical Outlook

Wall Street consensus is pristine, now yielding a ‘Buy’ rating based upon 21 ‘Buy’, 3 ‘Overweight’, and 2 ‘Hold’ recommendations. No analysts are recommending that shareholders underweight or sell positions. Price targets currently range from a low of $256 to a Street-high $378 while the stock will open Monday’s session about $11 below the median $300 target. Upside after the report appears limited, given the proximity to the median target and strong gains since June.

Microsoft cleared 16-year resistance in 2016 and entered an historic trend advance that stalled at 190 in February 2020. It returned to that level in May after a 58-point decline, ahead of a breakout that ended at 233 in September. The stock cleared that barrier in January 2021 and eased into a rising channel that broke to the upside last week. While this marks impressive strength, it also highlights a one-sided market that’s unlikely to persist in coming weeks.

For a look at all of today’s economic events, check out our economic calendar.

Disclosure: the author held no positions in aforementioned securities at the time of publication. 

Monstrous Earnings Week Ahead: Tesla, Google, Microsoft, Apple, Facebook and Amazon in Focus

Earnings Calendar For The Week Of July 26

Monday (July 26)

IN THE SPOTLIGHT: TESLA, LOCKHEED MARTIN

TESLA: The California-based electric vehicle and clean energy company is expected to report its second-quarter earnings of $0.94 per share, which represents year-over-year growth of over 113% from $0.44 per share seen in the same quarter a year ago.

The high-performance electric vehicle manufacturer would post revenue growth of about 90% to around $11.4 billion. The electric vehicle producer has beaten earnings three times in the last four quarters.

“A double-fly-wheel. We believe Tesla can leverage its cost leadership in EVs to aggressively expand its user base, over time generating a higher % of revenue from recurring/high-margin services revenue. Services drives the upside. We forecast Tesla’s network services EBITDA as a % of total TSLA EBITDA to reach 11% by 2025, ~18% by 2030 and ~35% by 2040. Tesla Service revenue includes automated driving, infotainment, upgrades, supercharging, maintenance, telematics, etc,” noted Adam Jonas, equity analyst at Morgan Stanley.

“Valuation supportive vs. tech. Including Network Services, Energy & Insurance to our core auto fcst, at $900 Tesla trades at ~29x EV/EBITDA in 2025 and ~6x 2025 sales. Expensive vs. auto but not vs. software/tech comps.”

LOCKHEED MARTIN: The Bethesda, Maryland-based global security and aerospace company is expected to report its second-quarter earnings of $6.53 per share, which represents year-over-year growth of about 13% from $5.79 per share seen in the same quarter a year ago.

The world’s largest defense contractor would post revenue growth of over 4% to around $16.9 billion. It is worth noting that the aerospace company has beaten earnings in all last eight quarters.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE JULY 26

Ticker Company EPS Forecast
PSON Pearson £8.40
LMT Lockheed Martin $6.53
PHG Koninklijke Philips $0.47
CHKP Check Point Software Technologies $1.56
LII Lennox International $4.39
RPM RPM International $1.26
BOH Bank of Hawaii $1.31
DORM Dorman Products $1.04
TSLA Tesla $0.94
KOF Coca Cola Femsa Sab De Cv $14.53
ARE Alexandria Real Estate Equities $0.62
AMP Ameriprise Financial $5.20
SUI Sun Communities $0.57
BRO Brown & Brown $0.40
UHS Universal Health Services $2.69
PKG Packaging Of America $1.77
FFIV F5 Networks $2.46
AGNC American Capital Agency $0.65
ACC American Campus Communities -$0.07
AMKR Amkor Technology $0.45
CR Crane $1.39
ADC Agree Realty $0.47
SSD Simpson Manufacturing $1.61
AXTA Axalta Coating Systems $0.46
TNET TriNet $0.81
HXL Hexcel $0.01
RRC Range Resources $0.25
PCH Potlatch $2.55
JJSF J&J Snack Foods $0.76
IBTX Independent Bank $1.31
CATY Cathay General Bancorp $0.83
AIN Albany International $0.73
CALX Calix $0.27
IBA Industrias Bachoco Sab De Cv $1.22
ARI Apollo Commercial Real Est Finance $0.36
PPERY PT Bank Mandiri Persero TBK $0.18
CDNS Cadence Design Systems $0.76
OTIS Otis Worldwide Corp $0.72
RYAAY Ryanair -$1.46
HAS Hasbro $0.48
WWD Woodward $0.98
ACKAY Arcelik ADR $0.46
GT Goodyear Tire & Rubber $0.16
TTM Tata Motors -$0.31
CBU Community Bank System $0.80
SANM Sanmina $0.91
BDN Brandywine Realty $0.01
FRME First Merchants $0.91

Tuesday (July 27)

IN THE SPOTLIGHT: GOOGLE (ALPHABET), MICROSOFT, APPLE

GOOGLE (ALPHABET): The parent of Google and the world’s largest search engine that dominates internet search activity globally is expected to report its second-quarter earnings of $19.33 per share, which represents year-over-year growth of about 90% from $10.13 per share seen in the same quarter a year ago.

The Mountain View, California-based internet giant would post revenue growth of more than 45% to around $56.16 billion. It is worth noting that the company, on average, has delivered an earnings surprise of over 43% in the last four quarters.

Alphabet’s better-than-expected results, which will be announced on Tuesday, July 27, would help the stock hit new all-time highs. Alphabet shares surged more than 50% so far this year. On Friday, the stock closed at a fresh record high at $2,660.30, up 3.57%.

MICROSOFT: The Redmond, Washington-based global technology giant would report its fiscal fourth-quarter earnings of $1.91 per share, which represents year-over-year growth of over 30% from $1.46 per share seen in the same quarter a year ago. The world’s largest software maker would post revenue growth of over 15% to around $44.1 billion, up from the $38.03 billion a year earlier.

“Channel work and our CIO survey point to building momentum across the Cloud, Hybrid and On-premise portfolio, which should power a solid Q4. While investors seek reassurances margin expansion continues into FY22, our model suggests durable high-teens EPS growth and upside in the shares,” noted Keith Weiss, equity analyst at Morgan Stanley.

Microsoft’s better-than-expected results, which will be announced on Tuesday, July 27, would help the stock hit new all-time highs. Microsoft shares have surged more than 30% so far this year.

APPLE: The consumer electronics giant would post its fiscal third-quarter earnings of $1.01 per share, which represents year-over-year growth of over 55% from $0.65 per share seen in the same quarter a year ago.

The iPhone manufacturer would post revenue growth of over 20% to around $73.3 billion up from $59.69 billion a year earlier. It is worth noting that the company has beaten earnings in all last eight quarters.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE JULY 27

Ticker Company EPS Forecast
SIRI Sirius XM $0.07
IEX IDEX $1.62
PCAR PACCAR $1.40
MMM 3M $2.29
MSCI Msci $2.31
ENPH Enphase Energy $0.42
LSXMK Liberty Media SiriusXM C $0.36
LSXMA Liberty Media SiriusXM A $0.48
CVLT Commvault Systems $0.52
LOGI Logitech Internationalusa $0.90
MXIM Maxim Integrated Products $0.85
ST Sensata Technologies $0.88
CNC Centene $1.22
UPS United Parcel Service $2.79
TRU TransUnion $0.91
SHW Sherwin-Williams $2.67
IVZ Invesco $0.70
FELE Franklin Electric $0.80
LW Lamb Weston Holdings Inc $0.42
IQV IQVIA Holdings Inc $2.07
RTX Raytheon Technologies Corp $0.93
ENTG Entegris $0.79
LECO Lincoln Electric $1.48
FISV Fiserv $1.28
DTE DTE Energy $1.36
GE General Electric $0.03
ROK Rockwell Automation $2.09
WM Waste Management $1.19
SWK Stanley Black & Decker $2.88
ADM Archer-Daniels Midland $1.02
HUBB Hubbell $2.16
PNR Pentair Ordinary Share $0.79
BSX Boston Scientific $0.37
ECL Ecolab $1.21
PPBI Pacific Premier Bancorp $0.71
GPK Graphic Packaging $0.28
PHM PulteGroup $1.73
AWI Armstrong World Industries $1.05
RGEN Repligen $0.52
SFNC Simmons First National $0.52
SSTK Shutterstock $0.68
ABG Asbury Automotive $4.60
MPWR Monolithic Power Systems $1.69
CHRW C.H. Robinson Worldwide $1.33
MANH Manhattan Associates $0.43
GOOG Alphabet $19.33
CB Chubb $3.00
AMD Advanced Micro Devices $0.54
PGRE Paramount Group -$0.05
SBUX Starbucks $0.77
CAKE Cheesecake Factory $0.72
EGP EastGroup Properties $0.67
AXS Axis Capital $1.42
WSBC WesBanco $0.75
HIW Highwoods Properties $0.33
STAG STAG Industrial $0.12
VIST Vista Oil Gas $0.15
NAVI Navient $0.85
EHC Encompass Health Corp $0.98
OMAB Grupo Aeroportuario Del Centro Nort $11.31
NOV National Oilwell Varco -$0.13
V Visa $1.34
GOOGL Alphabet $19.24
BXP Boston Properties $0.57
AAT American Assets $0.11
MSFT Microsoft $1.91
JNPR Juniper Networks $0.39
BYD Boyd Gaming $0.90
MASI Masimo $0.90
MTDR Matador Resources $0.75
CSGP CoStar $0.23
FIBK First Interstate BancSystem $0.72
OLN Olin $1.44
EQR Equity Residential $0.19
EXR Extra Space Storage $1.06
EPR EPR Properties $0.06
USNA USANA Health Sciences $1.72
THG Hanover $2.38
UMBF UMB Financial $1.75
CHE Chemed $4.29
SYK Stryker $2.13
MDLZ Mondelez International $0.65
MAT Mattel -$0.06
PFG Principal Financial $1.52
AAPL Apple $1.01
TER Teradyne $1.75
VIV Telefonica Brasil $0.13
ASH Ashland $1.31
GLW Corning $0.51
PII Polaris Industries $2.15
JBLU JetBlue Airways -$0.74
RDY Drreddys Laboratories $0.55
XRX Xerox $0.40
CIT CIT $0.86
SID Companhia Siderurgica Nacional $0.86
RNST Renasant $0.77

Wednesday (July 28)

IN THE SPOTLIGHT: FACEBOOK

The world’s largest online social network is expected to report its second-quarter earnings of $3.04 per share, which represents year-over-year growth of about 70% from $1.80 per share seen in the same quarter a year ago. The Menlo Park, California-based social media conglomerate would post revenue growth of over 49% to around $28.0 billion.

“Monetization Potential: We are positive on FB’s monetization roll-out of Instagram as well as FB’s ability to continue to innovate and improve its monetization (Canvas Ads, Dynamic Ads, video). Combined with the high and growing engagement we see monetization upside going forward,” noted Brian Nowak, equity analyst at Morgan Stanley.

“Investing from Position of Strength to Drive Faster Long-Term Growth: We are modeling ~33% GAAP opex (excl. one-time items) growth in 2021, implying an incremental ~$18bn in opex. Our base case model implies opex per employee moderates in ’21 while FB hiring remains roughly flat on an absolute basis. We believe FB will grow EPS at a ~39% CAGR (2019-2022).”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE JULY 28

Ticker Company EPS Forecast
PTC PTC $0.63
URI United Rentals $4.90
ENSG Ensign $0.88
ALKS ALKERMES $0.12
TYL Tyler Technologies $1.63
AMG Affiliated Managers $3.85
SF Stifel Financial $1.38
FIX Comfort Systems USA $0.91
MSA MSA Safety $1.04
CBD Companhia Brasileira De Distrib $0.04
ALGT Allegiant Travel $2.55
GD General Dynamics $2.55
HES Hess $0.11
PFE Pfizer $0.97
QCOM Qualcomm $1.68
HP Helmerich & Payne -$0.56
UMC United Microelectronics $0.14
BA Boeing -$0.81
EQIX Equinix $1.87
DB Deutsche Bank $0.33
RJF Raymond James Financial $2.27
SAN Banco Santander $0.13
HNP Huaneng Power International $0.86
LRCX Lam Research $7.59
APH Amphenol $0.55
EVR Evercore Partners $2.71
PPC Pilgrim’s Pride $0.52
R Ryder System $1.38
NSC Norfolk Southern $2.97
FORM FormFactor $0.33
SHOO Steven Madden $0.31
SCI Service International $0.67
ADP ADP $1.14
MNRO Monro Muffler Brake $0.52
SLAB Silicon Laboratories $0.93
BXMT Blackstone Mortgage $0.60
PAG Penske Automotive $2.76
ROL Rollins $0.18
BCS Barclays $0.54
CAJ Canon $0.33
XLNX Xilinx $0.78
HUM Humana $6.82
AVY Avery Dennison $2.05
NYCB New York Community Bancorp $0.30
SCL Stepan $1.84
GSK Glaxosmithkline $0.55
CME CME $1.61
TEVA Teva Pharmaceutical Industries $0.59
MCD McDonalds $2.11
BSBR Banco Santander Brasil $0.20
EXP Eagle Materials $2.07
DT Dynatrace Holdings $0.15
EEFT Euronet Worldwide $0.65
SPOT Spotify -$0.38
OC Owens Corning $2.14
FMX Fomento Economico Mexicano Sab $14.29
BMY Bristol-Myers Squibb $1.89
VRTS Virtus Investment Partners $8.11
GRMN Garmin $1.26
SIX Swiss Exchange -$0.22
CCJ Cameco USA -$0.05
TDY Teledyne Technologies $2.70
IART Integra LifeSciences $0.66
GNRC Generac $2.30
MCO Moody’s $2.77
VRT Veritas Pharma $0.24
EPD Enterprise Products Partners $0.50
GIB CGI Group USA $1.08
TMO Thermo Fisher Scientific $5.47
TEL TE Connectivity $1.58
SLGN Silgan $0.83
PB Prosperity Bancshares $1.39
ODFL Old Dominion Freight Line $2.17
BG Bunge $1.62
LFUS Littelfuse $2.24
CNMD CONMED $0.62
CP Canadian Pacific Railway USA $1.00
AVB AvalonBay Communities $0.74
ALGN Align Technology $2.52
AM Antero Midstream Partners $0.19
CNO CNO Financial Group $0.54
CINF Cincinnati Financial $0.99
SSNC SS&C Technologies $1.14
MTH Meritage Homes $3.28
TTEK Tetra Tech $0.88
MKSI MKS Instruments $2.95
ROIC Retail Opportunity Investments $0.06
SIGI Selective $1.23
VAC Marriottacations Worldwide $0.89
PDM Piedmont Office Realty $0.05
IRBT Irobot $0.32
UDR UDR $0.01
EXAS Exact Sciences -$0.75
MOH Molina Healthcare $3.39
EQT EQT $0.04
MXL MaxLinear $0.50
IR Ingersoll Rand $0.42
AGI Alamos Gold $0.11
MAA Mid-America Apartment Communities $0.55
KGC Kinross Gold USA $0.13
ESRT Empire State Realty -$0.01
BSMX Santander Mexico Fincl Gp Sab Decv $0.17
CRUS Cirrus Logic $0.39
MUSA Murphy USA $3.21
RE Everest Re $8.58
VALE Vale $1.47
DRE Duke Realty $0.19
PYPL PayPal $1.12
NOW ServiceNow $1.21
CCS Century Communities $2.84
NLY Annaly Capital Management $0.27
TROX Tronox $0.52
XPO XPO Logistics $1.66
SAVE Spirit Airlines -$0.86
PAC Grupo Aeroportuario Del Pacifico $1.14
CHX ChampionX Corp $0.10
NUVA NuVasive $0.44
FBHS Fortune Brands Home Security $1.39
NOVA Nova Mentis Life Science Corp -$0.24
FB Facebook $3.04
ACGL Arch Capital $0.84
CONE CyrusOne $0.04
AR Antero Resources $0.20
AEM Agnico Eagle Mines USA $0.59
RBC Regal Beloit Corporation $2.07
PEGA Pegasystems -$0.18
AFL Aflac $1.28
PKI PerkinElmer $2.44
CHDN Churchill Downs $2.51
PEB Pebblebrook Hotel -$0.65
CTSH Cognizant Technology Solutions $0.96
HOLX Hologic $1.12
KRC Kilroy Realty $0.29
ALSN Allison Transmission $0.93
F Ford Motor -$0.04
ASGN On Assignment $1.29
HIG Hartford Financial Services $1.34
ORLY O’Reilly Automotive $7.51
ISBC Investors Bancorp $0.31

Thursday (July 29)

IN THE SPOTLIGHT: AMAZON.COM

The eCommerce leader for physical and digital merchandise is expected to report its second-quarter earnings of $12.24 per share, which represents year-over-year growth of about 19% from $10.3 per share seen in the same quarter a year ago.

The Seattle, Washington-based multinational technology giant would post revenue growth of about 29% to around $115 billion. The company has beaten earnings per share (EPS) estimates at all times in the last four quarters.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE JULY 29

Ticker Company EPS Forecast
RLGY Realogy $1.08
VSTO Vista Outdoor $0.90
AGCO AGCO $2.20
PCG PG&E $0.28
MATX Matson $2.96
PRFT Perficient $0.79
NATI National Instruments $0.05
GPI Group 1 Automotive $7.59
CFX Colfax $0.53
CMS CMS Energy Corporation $0.46
LYG Lloyds Banking $0.14
MHK Mohawk Industries $3.59
EBS Emergent BioSolutions $1.41
TXT Textron $0.65
AUOTY AU Optronics $0.56
CMCSA Comcast $0.66
VLO Valero Energy $0.17
CG Carlyle $0.60
ABEV Ambev $0.02
NLSN Nielsen $0.36
MTD Mettler Toledo International $7.62
ADS Alliance Data Systems $3.68
FTNT Fortinet $0.88
FTV Fortive Corp $0.60
ASX Advanced Semiconductor Engineering $0.16
LKQ LKQ $0.75
ERJ Embraer -$0.26
TFX Teleflex $2.87
CARR Carrier Global Corp $0.55
CX Cemex Sab De Cv $0.16
ORAN Orange $0.18
CVE Cenovus Energy USA $0.26
MT Arcelormittal $2.52
MA Mastercard $1.74
KBR KBR $0.50
HOCPY Hoya Corp $0.85
YUM Yum Brands $0.96
EIX Edison International $1.02
EME EMCOR $1.58
AGIO Agios Pharmaceuticals -$1.35
KPELY Keppel Corporation $0.18
BUD Anheuser-Busch $0.87
CS Credit Suisse $0.22
DANOY Danone PK $0.45
SNY Sanofi $0.77
AZN Astrazeneca $0.45
TEF Telefonica $0.14
STM Stmicroelectronics $0.37
GRFS Grifolsbarcelona $0.26
THRM Gentherm $0.65
WWW Wolverine World Wide $0.49
CNX Consol Energy $0.24
CBRE CBRE Group Inc $0.77
TAP Molson Coors Brewing $1.35
VC Visteon $0.05
KEX Kirby $0.14
TREE LendingTree -$0.63
SAH Sonic Automotive $1.38
HSY Hershey $1.42
AMT American Tower $1.27
TW Towers Watson $0.39
OSK Oshkosh $2.25
MAS Masco $1.04
MO Altria $1.18
TROW T. Rowe Price $3.19
CTXS Citrix Systems $1.22
SPGI S&P Global Inc $3.26
BAX Baxter International $0.75
ICE Intercontinental Exchange $1.16
SO Southern Co. $0.79
NTCT Netscout Systems $0.18
GOL Gol Linhas Aereas Inteligentes -$0.91
CFR Cullen/Frost Bankers $1.56
CWT California Water Service $0.41
FSS Federal Signal $0.45
AER AerCap $1.37
COLB Columbia Banking System $0.66
COR CoreSite Realty $0.45
WEX WEX $1.95
TMHC Taylor Morrison Home $0.96
XEL Xcel Energy $0.56
FLEX Flextronics International $0.38
SAIA Saia $2.05
OSTK Overstock $0.67
IDA IdaCorp $1.21
FCN FTI Consulting $1.52
LAWS Lawson Products $0.60
WST West Pharmaceutical Services $1.74
MLM Martin Marietta Materials $3.85
MTSI MACOM Technology Solutions $0.53
LH Laboratory Of America $5.62
EXLS ExlService $1.01
BSAC Banco Santander Chile $0.50
AOS A.O. Smith $0.65
TPX Tempur Sealy International $0.56
HBAN Huntington Bancshares $0.32
WAB Westinghouse Air Brake Technologies $0.96
NOC Northrop Grumman $5.83
MMP Magellan Midstream Partners $1.02
HLT Hilton Worldwide $0.39
KDP Keurig Dr Pepper $0.37
OMCL Omnicell $0.82
BC Brunswick $2.14
MRK Merck & Co $1.40
TRP Transcanada USA $0.77
KIM Kimco Realty $0.12
IP International Paper $1.06
MDC MDC $1.99
PRLB Proto Labs $0.44
SGEN Seattle Genetics -$0.61
CPT Camden Property $0.34
SIMO Silicon Motion Technology $1.25
CUBE CubeSmart $0.21
DLB Dolby Laboratories $0.28
BIO Bio-Rad Laboratories $2.66
CC Chemours Co $0.94
ZEN Zendesk $0.16
FWRD Forward Air $0.97
AJG Arthur J. Gallagher $1.08
SPSC SPS Commerce $0.40
ROG Rogers $1.89
ERIE Erie Indemnity $1.51
CUZ Cousins Properties $0.20
WELL Welltower Inc $0.15
PTCT PTC Therapeutics -$1.81
AUY Yamana Gold USA $0.06
LPLA LPL Financial $1.67
WWE World Wrestling Entertainment $0.25
WRE Washington Real Estate Investment -$0.04
TXRH Texas Roadhouse $0.98
ATR AptarGroup $0.97
GLPI Gaming And Leisure Properties $0.57
OFC Orate Office Properties $0.14
RSG Republic Services $0.95
TEX Terex $0.60
X United States Steel $3.08
LBTYA Liberty Global Class A Ordinary Shares $0.46
KLAC KLA-Tencor $3.99
SWKS Skyworks Solutions $2.14
DXCM Dexcom $0.44
HUBG HUB $0.70
VCYT Veracyte -$0.25
POWI Power Integrations $0.75
LGND Ligand Pharmaceuticals $1.38
FHI Federated Hermes Inc $0.66
FSLR First Solar $0.55
CWST Casella Waste Systems $0.24
DLR Digital Realty $0.24
MTX Minerals Technologies $1.25
VRTX Vertex Pharmaceuticals $2.37
PFPT Proofpoint $0.49
ESS Essex Property $0.88
GILD Gilead Sciences $1.73
WERN Werner $0.87
MMSI Merit Medical Systems $0.45
LBTYK LIBERTY GLOBAL $0.46
AMZN Amazon $12.24
QGEN Qiagen $0.65
EW Edwards Lifesciences $0.55
NRZ New Residential Investment $0.31
MSTR Microstrategy $0.81
SM SM Energy -$0.26
SWN Southwestern Energy $0.21
TMUS T-Mobile Us $0.51
DECK Deckers Outdoor -$0.15
CORT Corcept Therapeutics $0.17
TWOU 2U -$0.16
SBH Sally Beauty $0.62
MPW Medical Properties $0.29
CACC Credit Acceptance $10.36
SJW SJW $0.64
SHEN Shenandoah Telecommunications $0.86
ES Eversource Energy $0.80
KMPR Kemper $1.33
WRI Weingarten Realty Investors $0.10
OPK Opko Health $0.02
SU Suncor Energy USA $0.39
APELY Alps Electric $0.11
ACI AltaGas Canada $0.69
EXPO Exponent $0.42

Friday (July 30)

Ticker Company EPS Forecast
KMTUY Komatsu $0.40
VFC VF $0.11
ABR Arbor Realty $0.42
PEXNY PTT Exploration & Production $0.16
LAZ Lazard $0.89
HRC Hill-Rom $1.35
XOM Exxon Mobil $1.00
COG Cabot Oil Gas $0.29
MFG Mizuho Financial $0.08
GCTAY Siemens Gamesa ADR $0.02
TU Telus USA $0.21
JCI Johnson Controls $0.83
CL Colgate-Palmolive $0.80
BAH Booz Allen Hamilton $0.97
TOTDY Toto $0.25
ASEKY Aisin Seiki Co $1.13
BBVA Banco Bilbaoizcaya Argentaria $0.06
E ENI $0.33
FMS Fresenius Medical Care $0.48
SMFG Sumitomo Mitsui Financial $0.21
SBGSY Schneider Electric SA $0.63
PG Procter & Gamble $1.09
CHD Church Dwight $0.70
ALNPY ANA Holdings ADR -$0.20
CVX Chevron $1.58
BNPQY BNP Paribas ADR $1.07
NMR Nomura $0.17
CHT Chunghwa Telecom $0.34
HUN Huntsman $0.81
LIN Linde PLC $2.55
AON AON $1.85
PNM PNM Resources $0.46
CAT Caterpillar $2.41
CPRI Capri Holdings Ltd $0.79
BLMN Bloomin’ Brands $0.66
CHTR Charter Communications $4.79
DAN Dana $0.50
ITW Illinois Tool Works $2.09
GWW Grainger $4.59
CERN Cerner $0.76
NWL Newell Brands Inc $0.45
POR Portland General Electric $0.37
ENB Enbridge USA $0.45
LYB LyondellBasell Industries $5.30
ABBV AbbVie $3.08
SHLX Shell Midstream Partners $0.35
WPC W. P. Carey $0.56
AVNT Avient Corp $0.81
WY Weyerhaeuser $1.37
IDXX Idexx Laboratories $2.02
BCPC Balchem $0.82
For a look at all of today’s economic events, check out our economic calendar.

Australian Regulator to Probe Amazon, Ebay Among Online Markets

By Byron Kaye

The Australian Competition and Consumer Commission (ACCC), which previously slapped the world’s toughest content licencing rules on Facebook Inc and Alphabet Inc’s Google, said it was now looking at retail as part of a wider examination of so-called Big Tech.

“Online marketplaces are an important and growing segment of the economy so it is important that we understand how online marketplaces operate and whether they are working effectively for consumers and businesses,” ACCC Chair Rod Sims said in a statement.

“We want to be sure that the rules that apply to traditional retail are also complied with in the online context.”

The ACCC would take submissions until mid-August with a final report due in March 2022, the regulator said.

An Amazon spokesperson said the company looked “forward to engaging with the ACCC on these important topics in the coming months”, while an eBay representative was not immediately available for comment.

The Australian regulator said it would examine the relationships between large online markets and third-party sellers and shoppers, including competition impacts and handling of data, complaints and reviews.

Amazon has not reached the market dominance in Australia since launching in 2017 that it experiences elsewhere, but still doubled sales in calendar 2020, the ACCC said.

Overall, Australian online purchases jumped 57% in 2020 for a record $50.5 billion spend amid a series of coronavirus lockdowns, it added.

The ACCC said it had received wide-ranging complaints, including the “quality of goods sold on marketplaces, the timeliness of payment remittance to sellers, how goods are put on display on marketplaces, and the level of support provided by marketplaces to consumers when disputes arise”.

The ACCC has been conducting a series of investigations in recent months as part of a broader Digital Platform Services Inquiry.

($1 = 1.3609 Australian dollars)

(Reporting by Byron Kaye; editing by Jane Wardell and Michael Perry)

Political Firestorm Drops Facebook to Four-Week Low

Facebook Inc. (FB) is trading at a four-week low in Monday’s pre-market after pushing back on White House accusations that COVID-19 misinformation on the platform is “killing people”. The allegation set off a political firestorm in the United States last week, with conservatives accusing President Biden of seeking control of the online service in order to silence critics. Meanwhile, liberals are backing the President, frustrated by a long-standing contentious relationship with CEO Marc Zuckerberg.

Pouring Gasoline on the Political Fire

White House press secretary Jen Psaki ignited the political controversy on Thursday, alleging that Facebook is “not doing enough to stop the spread of misinformation about the virus and the COVID-19 vaccine”. Biden poured gasoline on the incendiary criticism ahead of the weekend, insisting “They’re killing people. I mean, it really – look, the only pandemic we have is among the unvaccinated and they’re killing people.”

Facebook fired back this morning, insisting it “was not the reason the 70% vaccination goal was missed”. The release noted that “data shows that 85% of Facebook users in the US have been or want to be vaccinated against COVID-19. President Biden’s goal was for 70% of Americans to be vaccinated by July 4. Facebook is not the reason this goal was missed. Since the pandemic began, more than 2 billion people have viewed authoritative information about COVID-19 and vaccines on Facebook”.

Wall Street and Technical Outlook

Wall Street consensus hasn’t reacted to recent political events, maintaining a ‘Buy’ rating based upon 40 ‘Buy’, 3 ‘Overweight’, 8 ‘Hold’, and 1 ‘Sell’ recommendation. Price targets currently range from a low of $275 to a Street-high $460 while the stock is set to open Monday’s session more than $55 below the median $395 target. This humble placement suggests the pullback will offer a low risk buying opportunity in coming weeks.

Facebook broke out above the August 2020 high at 304.67 in April, entering a strong trend advance that stalled above 355 in June. Two breakout attempts since that time have failed, giving way to a decline that’s now testing short-term support near 337. The selloff could stretch into the 50-day moving average at 334 while the risk of even lower prices will remain high through next week’s Q2 earnings report, which has the power to trigger a larger-scale decline.

For a look at all of today’s economic events, check out our economic calendar.

Disclosure: the author held no positions in aforementioned securities at the time of publication. 

Earnings vs Inflation – What Is The Right Bet?

As investment money will always be looking for a place to roost many stocks still look like the best opportunity for alpha, especially some of your bigger high-tech companies like Microsoft, Google, Facebook, etc… who don’t face the same headwinds created by supply chain dislocations, higher commodity prices, etc.

Fundamental analysis

Bulls are hoping to see more money lured into the market by strong Q2 earnings which have so far failed to ignite a meaningful rally. Analyst expectations for S&P 500 company earnings is still around +65%, something stock bears argue is lofty considering the extreme level of supply chain dislocations and labor shortages.

There is also a lot of debate about whether corporate profit gains are “peaking” in the face of slower growth in the quarters ahead as the reopening boom begins to fade. Remember, investors place bets on the future, not what happened last quarter.

The earnings pace really picks up next week with highlights including IBM on Monday; Chipotle and Netflix on Tuesday; ASML, CocaCola, Novartis, and Verizon on Wednesday; Abbott Labs, AT&T, Biogen, Capital One, Dow Inc., Intel, Snap, Southwest Airlines, Twitter, and Union Pacific on Thursday; and American Express, Honeywell, and Nextera on Friday.

Inflation

One of the biggest factors that seem to be weighing on investor sentiment continues to be inflation. The latest indication of rising costs was reflected last week in U.S. Import Prices, which climbed for an eighth straight month in June.

However, the year-on-year increase slid to +11.2%, down from +11.6% in May is an encouraging sign that some inflationary pressures might be starting to ease. Federal Reserve Chairman Jerome Powell, testifying before the Senate Banking Committee yesterday, repeated the script he’s stuck with for months, saying inflation will likely remain elevated in the coming weeks and months before moderating.

Powell also told lawmakers that the Fed is not in a hurry to start paring its monthly asset purchases but he stressed that the central bank is prepared to adjust policy if they see signs of inflation moving “materially and persistently beyond levels consistent with our goal.” Wall Street increasingly expects the Fed to start trimming asset purchases later this year and even start lifting rates as soon as Q4 2022.

The Fed meets next on July 27-28 but most analysts think Powell will wait to make any big policy change announcements at either the annual Jackson Hole symposium at the end of August or possibly the FOMC’s September policy meeting. Central banks in Canada and New Zealand this week scaled back their asset purchase schemes which some worry could start to put pressure on central bankers in other developed countries to also tighten.

The European Central Bank releases its latest policy decision next Thursday. Bulls still largely believe that U.S. growth will be able to outpace “transitory” inflation pressures but the outlook for some companies could dim if the Fed starts reining in its “easy money” policies sooner than investors have been anticipating.

sp500 analysis forecast 18 july 2020

SP500 technical analysis

SP500 pulled back last week after another attempt to break out. There is no surprise we see such choppiness in the middle of summer. Moreover, very likely this price activity will stay for a few more weeks. We are still in a bull market. However, the risk of deep pullback is rising. If that happens, SP500 will target to close the gap near 4000.

On the other hand, if the price sustains above Gann resistance 4400, bulls will target 4500 at least. Two of my favourite indicators are giving opposite signals now. So, I don’t have any strong bias at the moment. Advance Decline Line remains bearish. At the same time, Insider Accumulation is bullish. In general, swing traders have to focus on daily support and resistance. Likely it will take few more weeks to see a real direction. Short-term traders can use Gann levels and Cycles on 4h charts to find trading opportunities.

Twitter Could Miss Second Quarter Expectations

Twitter Inc. (TWTR) reports Q2 2021 earnings after Thursday’s closing bell, with analysts looking for a profit of just $0.07 per-share on $1.06 billion in revenue. If met, earnings-per-share (EPS) will mark a turnaround from the $0.16 loss posted in the same quarter last year, which included the exit from the first pandemic lockdown The stock fell nearly 10% in April after reporting weaker-than-expected Q1 user growth and providing weak Q2 revenue guidance.

Betting on Twitter Blue

The social media outlet hopes the Twitter Blue subscription service will improve its tepid bottom line in coming quarters. It rolled out the premium program in Australia and Canada in June but there’s no U.S. release date. According to the press release “we’ve heard from the people that use Twitter a lot, and we mean a lot, that we don’t always build power features that meet their needs. Well, that’s about to change. We took this feedback to heart, and are developing and iterating upon a solution that will give the people who use Twitter the most what they are looking for.”

U.S. media outlets that booked massive subscription gains during the Trump years are reporting sharp readership declines as we enter the second half of 2021, reflecting disengagement generated by the pandemic and the less-bombastic governing style of President Joe Biden. Twitter and rival Facebook Inc. (FB) are vulnerable to the same forces of political exhaustion and mean reversion, raising odds that daily average user (DAU) growth will miss Q2 expectations.

Wall Street and Technical Outlook

Wall Street consensus has deteriorated since April despite the new offering, with a ‘Hold’ rating based upon 9 ‘Buy’, 1 ‘Overweight’, 26 ‘Hold’, and 1 ‘Underweight’ recommendation. In addition, three analysts recommend that shareholders close positions move to the sidelines. Price targets currently range from a low of $30 to a Street-high $83 while the stock closed Friday’s session just $1 above the median $65 target. This placement suggests that Twitter is fully-valued at this time.

Twitter sold off from 74 in 2013 to 14 in 2016, turning higher into the 2018 high at 48. It posted a higher low during the pandemic decline, ahead of renewed upside that reached multi-year resistance in October 2020. A February 2021 breakout failed, yielding more than four months of mixed action between resistance in the mid-70s and support in the upper 40s. The tape has shown little accumulation since May despite a persistent uptick, predicting rangebound action well into the fourth quarter.

For a look at all of this week’s economic events, check out our economic calendar.

Disclosure: the author held no positions in aforementioned securities at the time of publication. 

Nasdaq Ends Lower as Investors Sell Big Tech

Amazon, Apple Tesla and Facebook all fell. Nvidia tumbled around 4%.

The S&P 500 technology sector index ended a four-day winning streak. Earlier this week, investors’ favor for heavyweight growth stocks pushed the S&P 500 and the Nasdaq to record highs.

The S&P 500 energy sector index fell more than 1% and tracked a drop in crude prices on expectations of more supply after a compromise agreement between leading OPEC producers.

Fresh data showed the number of Americans filing new claims for unemployment benefits fell last week to a 16-month low, while worker shortages and bottlenecks in the supply chain have frustrated efforts by businesses to ramp up production to meet strong demand for goods and services.

Federal Reserve Chair Jerome Powell told lawmakers he anticipated the shortages and high inflation would abate. Yet many investors still worry that more sustained inflation could lead to a sooner-than-expected tightening of monetary policy.

“People are very nervous and concerned about inflation, tax rates and the (2022 midterm) election. Those three things are very much on people’s minds,” said 6 Meridian Chief Investment Officer Andrew Mies, describing recent phone calls with his firm’s clients.

Unofficially, the Dow Jones Industrial Average rose 54.52 points, or 0.16%, to 34,987.75, the S&P 500 lost 14.29 points, or 0.33%, to 4,360.01 and the Nasdaq Composite dropped 101.82 points, or 0.7%, to 14,543.13.

Morgan Stanley dipped as much as 1.2% after it beat expectations for quarterly profit, getting a boost from record investment banking activity even as the trading bonanza that supported results in recent quarters slowed down.

Second-quarter reporting season kicked off this week, with the four largest U.S. lenders – Wells Fargo & Co, Bank of America Corp, Citigroup Inc and JPMorgan Chase & Co – posting a combined $33 billion in profits, but also highlighting the industry’s sensitivity to low interest rates.

Blackstone said late on Wednesday it would pay $2.2 billion for 9.9% stake in American International Group’s life and retirement business. AIG and Blackstone both rallied.

Johnson & Johnson dipped after it voluntarily recalled five aerosol sunscreen products in the United States after detecting a cancer-causing chemical in some samples.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Noel Randewich; Additional reporting by Devik Jain and Shreyashi Sanyal in Bengaluru; Editing by Maju Samuel)

 

Today’s Market Wrap Up and a Glimpse Into Tuesday

Stocks came out of the gate strong, with the S&P 500 and Nasdaq both setting new record highs, buoyed by Facebook. The social media giant gained more than 4% on the day and is up in extended hours thanks to a court ruling that went Mark Zuckerberg’s way in an antitrust case filed by the FTC.

Today marked the third consecutive all-time high for the S&P 500.  The Dow Jones Industrial Average didn’t join the party and closed the day slightly in the red. Dow member Boeing pressured the index due to a regulatory setback for its 777X aircraft.

Outside of the stock market, cryptocurrencies were in focus after ARK Invest filed with the U.S. SEC for a bitcoin ETF. The bitcoin price has been leading the markets higher all day even before the ETF development. Cathie Wood, who is at the helm of ARK Invest, is also a Tesla bull.

Stocks to Watch

The top three most actively traded companies today were meme stocks.

  • Context Logic topped the list. The stock, which trades under the symbol WISH, gained 2.5% on the day with 175 million shares changing hands vs. the average volume of 46 million.
  • Virgin Galactic, which was last week’s winner, gave back some ground today, falling nearly 2% after its value ballooned by nearly 40% on Friday. The company received regulatory approval for commercial flights to space.
  • AMC Entertainment tacked on 7.5% after enjoying its best weekend for ticket sales since before the pandemic as moviegoers returned to the theaters.

Financials in Focus

  • Morgan Stanley is up 3.4% in after-hours trading after revealing that it would increase its quarterly dividend twofold to USD 0.70 per share as soon as Q3, pending board approval. The investment bank is going for it and also announced a USD 12 billion share buyback program on the heels of the recent stress test.
  • JPMorgan lifted its dividend to USD 1 per share, an 11% increase in the payout.
  • Bank of America is increasing its distribution by 17% to USD 0.21 per share.
  • Goldman Sachs announced a 60% increase to its quarterly dividend to USD 2 per share, up from USD 1.25.

Look Ahead

The markets are also bracing for June’s employment report, which is expected on Friday. In the interim, Richmond Fed President Thomas Barkin will be making comments on Tuesday. The earnings calendar is light.