Worried About A Market Crash? Consult The Big Money Index

And Consider These Stocks When It Does

They get cranky, roll over, fall out of bed, and hit their heads on the floor. It’s part of life, and most people don’t like when it happens.

But what if I told you there’s a tool that can alert you before markets roll-over?

It may sound too good to be true. But here I’ll introduce you to my favorite indicator that can do exactly that. I’ll show you how it works, what it’s saying now, and I’ll even show you examples of outlier stocks that weather the inevitable storms particularly well over the long-run.

The Big Money Index (BMI) is a great market timing indicator. It was developed by MAPsignals, a research firm dedicated to tracking Big Money investors in real-time. The idea is this: JPMorgan did a study estimating that 10% of all daily stock trading volume is due to fundamental discretionary traders. The lion’s share of trading is institutional.

If we can identify when huge investors are moving in and out of stocks in an unusual way, we can try and be ahead of the crowd. This way we can have a possible advantage and ride their coattails. We used our Wall Street experience of handling big stock orders to help us create this indicator. It’s our best guess of where the Big Money is heading on a daily basis.

When we add up all the daily buy and sell signals and smooth them out over a 25-day moving average, we get the Big Money Index.

Right now, it’s indicating higher prices for stocks. When it rises, like now, usually the market follows:

It looks like this:

MAPsignals.com

We’ve back-tested this indicator going back over 30 years. When overbought, (80% or more) markets crest shortly thereafter often preceding a market correction. These are rare occurrences: The BMI was overbought just 20% of the last 3 decades.

Rarer still is an oversold BMI: only 4% occurred the last 30 years. When the Big Money Index goes deeply oversold, that’s when history says stocks are bound to rise. Markets usually rocket higher weeks and months later.

Here are some recent examples of the Big Money Index accurately foreshadowing market peaks and troughs:

  • January 2018 peak
  • December 2018 trough
  • February 2020 peak
  • March 2020 trough
  • September 2020 peak
  • October 2020 Election volatility
  • November 2020 rally

If a deeply oversold Big Money Index is great for identifying buy opportunities, then how do we know when to side-step a market drop?

Below is the same BMI chart. Only we’ve added periods where the 10- day average was below 65%. That just basically means, the BMI was weakening. Here’s what we saw over the last three years:

When red comes, it generally lasts a while. This also corresponds to a falling then recovering index. When red starts, indexes usually fall. Red can only stop when Big Money buying lifts the average above 65%.

To summarize, when the BMI is falling, the S&P 500 is mostly flat:

From 2012, we see similar:

To avoid being left holding the bag when the next market drop comes, watch for a falling Big Money Index. Remember, Big Money means we’re trying to track institutional investors. They usually have an edge over everyone else. They tend to have the best market information out there. So, it’s best to watch them!

Now you know about the BMI. You know you can use it to potentially manage your risk. You know you should watch out for a falling BMI to alert you of danger ahead.

They say the best defense is a good offense. I told you I’d let you know which stocks to hold when that inevitable cranky stock market comes. To find them, I went back over the following periods of market turmoil:

Each of these drops was preceded by a falling Big Money Index. And each time the market troughed, I went and looked at which stocks came out with flying colors.

Market volatility is inevitable. But when it comes, we’ve found the best defense is owning outlier stocks. These stocks are the best of the best. They have growing sales, earnings, and profits. And they are also getting scooped up by Big Money investors.

Hidden in MAPsignals buy and sell signals are high-quality stocks that can offer opportunity when things get bumpy.

You’ll notice in the 6-year charts below, the green bars indicate Big Money buying when stocks have superior fundamentals. These are mother-outliers. All that green, we call the stairway to heaven. But even through periods of wicked volatility, these stocks do incredibly well over the long run.

Facebook Inc. (FB) rose 293% since 2015:

Source: MAPsignals, end of day data sourced from Tiingo.com

Mastercard Inc. (MA) rose 378% over the same period:

Source: MAPsignals, end of day data sourced from Tiingo.com

Nvidia Corp. (NVDA) rose an astounding 3,067% since 2015:

Source: MAPsignals, end of day data sourced from Tiingo.com

Compare those stocks with the SPY SPDR S&P 500 ETF which gained 129%.

These outlier stocks are ones I would want to own when the next market rough patch comes.

So, there you have it: a detailed playbook on how to forecast, avoid, and even defend against the next market crash. We all know it’s coming eventually, but now you can be armed with tools to help you through.

The next time markets get cranky, you just might already be out of sight avoiding it until happier days.

The Bottom Line

Trying to understand what the Big Money is doing is important. Currently the Big Money Index is pointing higher, which is near-term bullish. When it heads lower, I’ll be paying attention. I believe in looking for quality companies in times of turmoil.

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

Disclosure: the author holds no positions FB, MA, NVDA, & SPY at the time of publication.

Investment Research Disclaimer

https://mapsignals.com/contact/

Apple, Facebook Drive Nasdaq Futures Higher as Earnings Roll In

By Shivani Kumaresan

Apple Inc gained 2.7% in premarket trading after posting sales and profits ahead of Wall Street estimates, led by much stronger-than-expected iPhone and Mac sales.

Facebook Inc jumped 7.3% on beating analysts’ expectations for both quarterly revenue and profit, helped by a surge in digital ad spending during the pandemic, along with higher ad prices.

Other megacap companies, including Microsoft Corp, Alphabet Inc and Netflix Inc, rose between 0.2% and 1.1%.

Official data is likely to show that the number of Americans filing new claims for jobless benefits rose last week, while the Commerce Department is expected to report a 6.1% rise in first-quarter GDP.

More earnings reports from Dow components rolled in, with Caterpillar Inc rising 2.8% after the heavy equipment maker reported a rise in adjusted first-quarter profit. Drugmaker Merck & Co Inc, however, slid 3.2% on posting a 1.2% fall in quarterly profit.

Global shares extended gains after the Federal Reserve said it was too early to consider rolling back emergency support for the economy, and U.S. President Joe Biden proposed a $1.8 trillion stimulus package.

At the conclusion of the U.S. central bank’s latest policy meeting on Wednesday, Fed Chair Jerome Powell acknowledged the economy’s growth, but said there was not yet enough evidence of “substantial further progress” toward recovery to warrant a change in policy.

At 6:44 a.m. ET, Dow e-minis were up 177 points, or 0.52%, S&P 500 e-minis were up 30.25 points, or 0.72%, and Nasdaq 100 e-minis were up 138.75 points, or 1%.

Shares of electric vehicles companies, including Tesla Inc, Nikola Corp, rose 1.1% and 2.6%, respectively, as sales picked up speed in the first quarter, according to the International Energy Agency.

Amazon.com Inc, Twitter Inc, Mastercard Inc and Gilead Sciences Inc are also expected to report first-quarter earnings later in the day.

(Reporting by Shivani Kumaresan and Shreyashi Sanyal in Bengaluru; Editing by Saumyadeb Chakrabarty)

Futures Hover at Record Levels as Focus Turns to Tech Earnings, Fed

By Medha Singh

Electric carmaker Tesla Inc dropped about 3% in premarket trading after it marginally beat analysts’ expectations for quarterly revenue, helped by a jump in environmental credit sales to other automakers and liquidating some bitcoins.

Focus is now on results from Microsoft Corp and Alphabet Inc when they report after markets close. Apple Inc, Facebook Inc and Amazon.com Inc are slated to report later in the week. The five companies combined account for about 40% of the S&P 500’s market capitalization.

Overall earnings for S&P 500 companies are expected to jump 33.3% in the first quarter from a year earlier, according to Refinitiv IBES data.

The S&P 500 and the Nasdaq ended at record levels on Monday, with the tech-heavy Nasdaq completing a full recovery from its 11% correction that began in February.

Recent data indicating that the U.S. economy was set for a strong rebound, backed by vaccine distributions and unprecedented monetary and fiscal support, has provided much of that support.

The Fed is not expected to change its policy guidance at the end of its two-day meeting on Wednesday but could shine some light on U.S. central bank’s thinking on inflation, bond buying and risks to the financial system posed by soaring asset prices.

At 06:19 a.m. ET, Dow E-minis were down 4 points, or 0.01%, S&P 500 E-minis were up 2.5 points, or 0.06% and Nasdaq 100 E-minis were up 11 points, or 0.08%.

(Reporting by Medha Singh in Bengaluru; Editing by Anil D’Silva)

Spotify’s New Tie-Up to Allow Listeners Play Music, Podcasts from Facebook App

Facebook last week said it planned to launch several audio products, including Clubhouse-style live audio rooms and a way for users to find and play podcasts.

The new integration is rolling out in 27 markets, including the U.S. and Canada, with additional markets to follow in the coming month, Spotify said in a statement.

Spotify’s paid subscribers would be able to access full playback without advertisements without leaving the Facebook app.

Apple last week said it will launch podcast subscriptions, which will let users pay to unlock new content and additional benefits like ad-free listening, intensifying competition with Spotify.

Both Spotify and Facebook have been fighting Apple on different fronts, from privacy changes on iOS devices to the 30% fee levied on app developers to use the iPhone maker’s in-app purchase system.

Apple has said its App Store helped Spotify to benefit from hundreds of millions of app downloads to become Europe’s largest music streaming service.

(Reporting by Supantha Mukherjee, European Technology & Telecoms Correspondent, based in Stockholm; Editing by Kirsten Donovan)

Earnings to Watch Next Week: Tesla, Alphabet, Microsoft, Facebook, Apple and Amazon.com in Focus

Earnings Calendar For The Week Of April 26

Monday (April 26)

IN THE SPOTLIGHT: TESLA

The California-based electric vehicle and clean energy company Tesla is expected to report its first-quarter earnings of $0.79 per share, which represents year-over-year growth of over 240% from $0.23 per share seen in the same quarter a year ago.

The high-performance electric vehicle manufacturer’s revenue would grow over 70% to $10.2 billion. The electric vehicle producer has beaten earnings per share and revenue estimates by over 60% of the time in the last two years.

“Updating the model for the 1Q deliveries of 184,800 which were over 20% above our forecast. We also made adjustments to our volume forecasts for the remainder of the year to account for the strong start while allowing for potential supply constraints and other factors. The net result is we raise our FY21 delivery forecast by 3% to 809k units,” noted Adam Jonas, equity analyst at Morgan Stanley.

“We note our FY volume is modestly below consensus as we allow for a ‘margin of safety’ given highly fluid supply chain issues impacting the industry. Our forward year volume forecast increases very slightly (approx. 1%) to 1.1mm units. This impact, along with some other minor adjustments to the model lifts our target to $900 from $880 previously. We do not change our bull or bear case valuations at this time.”

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

Ticker Company EPS Forecast
CBU Community Bank System $0.81
BOH Bank of Hawaii $1.18
DORM Dorman Products $1.02
FBP First Bancorp FBP $0.24
PHG Koninklijke Philips $0.29
OTIS Otis Worldwide Corp $0.62
CHKP Check Point Software Technologies $1.49
LII Lennox International $1.29
ACI AltaGas Canada $0.50
CAJ Canon $0.24
TSLA Tesla $0.79
RRC Range Resources $0.27
HTLF Heartland Financial USA $1.14
OMF OneMain Holdings $2.04
AXTA Axalta Coating Systems $0.42
AMKR Amkor Technology $0.41
TNET TriNet $1.32
SSD Simpson Manufacturing $0.92
PCH Potlatch $1.71
WRI Weingarten Realty Investors $0.41
CATY Cathay General Bancorp $0.78
IBTX Independent Bank $1.30
JJSF J&J Snack Foods $0.12
AIN Albany International $0.62
CNI Canadian National Railway USA $0.99
NXPI NXP Semiconductors $2.21
SBAC SBA Communications $2.45
AMP Ameriprise Financial $4.73
ARE Alexandria Real Estate Equities $1.85
SSNC SS&C Technologies $1.10
SUI Sun Communities $1.16
BRO Brown & Brown $0.56
PKG Packaging Of America $1.47
UHS Universal Health Services $2.15
MKSI MKS Instruments $2.17
AGNC American Capital Agency $0.64
CDNS Cadence Design Systems $0.74
MASI Masimo $0.88
RMBS Rambus $0.28
WWD Woodward $0.80
SANM Sanmina $0.82
TOP Topdanmark A/S kr5.74
KOF Coca Cola Femsa Sab De Cv $13.82
BAYRY Bayer AG PK $0.77
FIX Comfort Systems USA $0.56
SCCO Southern Copper $0.85
AMG Affiliated Managers $4.26
TV Grupo Televisa Sab $0.10
EGOV NIC $0.23
TOWN Townebank $0.65

Tuesday (April 27)

IN THE SPOTLIGHT: ALPHABET, MICROSOFT

ALPHABET: The parent of Google and the world’s largest search engine that dominates internet search activity globally is expected to report its first-quarter earnings of $15.45 per share, which represents year-over-year growth of about 57% from $9.87 per share seen in the same quarter a year ago.

The Mountain View, California-based internet giant would post revenue growth of more than 25% to around $42.2 billion. It is worth noting that the company, on average, has delivered an earnings surprise of over 25% in the last four quarters.

Alphabet’s better-than-expected results, which will be announced on Tuesday, April 27, would help the stock hit new all-time highs. Alphabet shares surged more than 30% so far this year. On Friday, the stock closed 2.1% higher at $2,299.93 – close to the record high of $2,304.09.

GOOGL still favorable set up after strong YTD gains. GOOGL has outperformed major indices YTD as investor sentiment turned positive. Our checks have been broadly positive, indicating accelerating momentum in the ad business and sustained strength in Cloud,” noted Brent Thill, equity analyst at Jefferies.

GOOGL remains a top large-cap pick as we believe it should benefit in 2021 from ad spend recovery, pent-up demand for Google Cloud, and call options on Waymo and other non-advertising initiatives.”

MICROSOFT: The Redmond, Washington-based global technology giant would report its fiscal third-quarter earnings of $1.76 per share, which represents year-over-year growth of over 25% from $1.40 per share seen in the same quarter a year ago. The world’s largest software maker’s revenue would rise over 17% to around $41 billion, up from the $35.02 billion a year earlier.

“An improving spending environment drives several sources of potential upside to Q3, most prominently around the hybrid cloud engine (Azure + Server Products) and Windows OEM. Strong positioning for multiple secular trends and an attractive valuation make MSFT a Top Pick in Software,” noted Keith Weiss, equity analyst at Morgan Stanley.

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

Ticker Company EPS Forecast
PCAR PACCAR $1.29
ENTG Entegris $0.72
NVS Novartis $1.57
CROX Crocs $0.88
MMM 3M $2.25
MSCI Msci $2.29
JBLU JetBlue Airways -$1.68
PII Polaris Industries $1.54
GLW Corning $0.42
HAS Hasbro $0.66
AWI Armstrong World Industries $0.96
UBS UBS Group $0.52
ABB ABB $0.28
BP BP $0.43
UPS United Parcel Service $1.63
ST Sensata Technologies $0.74
CNC Centene $1.65
SYF Synchrony Financial $1.50
IVZ Invesco $0.62
TRU TransUnion $0.80
SCL Stepan $1.43
FELE Franklin Electric $0.39
RTX Raytheon Technologies Corp $0.88
ABG Asbury Automotive $3.58
LECO Lincoln Electric $1.18
ROP Roper Industries $3.32
SHW Sherwin-Williams $1.65
DTE DTE Energy $2.09
FISV Fiserv $1.13
MMC Marsh & McLennan Companies $1.70
GE General Electric $0.02
WM Waste Management $1.00
CEQP Crestwood Equity Partners $0.34
LLY Eli Lilly $2.12
ADM Archer-Daniels Midland $1.00
ECL Ecolab $0.82
PHM PulteGroup $1.19
HUBB Hubbell $1.67
PPBI Pacific Premier Bancorp $0.63
SSTK Shutterstock $0.70
UMBF UMB Financial $1.47
GPK Graphic Packaging $0.25
PSB PS Business Parks $1.67
RNST Renasant $0.63
CHE Chemed $4.20
MANH Manhattan Associates $0.32
USNA USANA Health Sciences $1.58
TXN Texas Instruments $1.56
SYK Stryker $1.98
MDLZ Mondelez International $0.69
MXIM Maxim Integrated Products $0.75
COF Capital One Financial $4.17
TER Teradyne $1.04
PFG Principal Financial $1.35
APAM Artisan Partners Asset Management $1.10
CALX Calix $0.20
VALE Vale $1.01
MATX Matson $1.86
AMGN Amgen $4.00
EIX Edison International $0.67
ENPH Enphase Energy $0.41
SBUX Starbucks $0.52
ATRC AtriCure -$0.41
AMD Advanced Micro Devices $0.44
TRMK Trustmark $0.61
EGP EastGroup Properties $1.39
WSBC WesBanco $0.70
ROIC Retail Opportunity Investments $0.24
OKE ONEOK $0.77
IEX IDEX $1.41
V Visa $1.27
NOV National Oilwell Varco -$0.23
CSGP CoStar $2.40
OLN Olin $1.34
MSFT Microsoft $1.76
BYD Boyd Gaming $0.44
ESS Essex Property $3.04
EQR Equity Residential $0.68
TX Ternium $2.29
EHC Encompass Health Corp $0.80
GOOGL Alphabet $15.45
QTS QTS Realty $0.65
BXP Boston Properties $1.55
UDR UDR $0.48
FTI FMC Technologies -$0.08
GOOG Alphabet $15.45
CHRW C.H. Robinson Worldwide $0.97
FFIV F5 Networks $2.39
FEYE FireEye $0.07
CB Chubb $2.45
TENB Tenable Holdings Inc $0.06
ILMN Illumina $1.36
NAVI Navient $0.78
HIW Highwoods Properties $0.87
AAT American Assets $0.35
JNPR Juniper Networks $0.25
ACGL Arch Capital $0.50
FIBK First Interstate BancSystem $0.73
NCR NCR $0.47
TKC Turkcell $0.17
AJRD Aerojet Rocketdyne $0.46
ZBRA Zebra Technologies $4.39
MKL Markel $12.29
AMX America Movil Sab De Cv Amx $0.33
MSTR Microstrategy -$0.19
VIST Vista Oil Gas $0.07
IBA Industrias Bachoco Sab De Cv $1.54
BSBR Banco Santander Brasil $0.19
SAN Banco Santander $0.11
OMAB Grupo Aeroportuario Del Centro Nort $0.37
NMR Nomura -$0.21
IRBT Irobot $0.06
HSBC HSBC $0.60
ATLCY Atlas Copco ADR $0.40

Wednesday (April 28)

IN THE SPOTLIGHT: FACEBOOK, APPLE

FACEBOOK: The world’s largest online social network is expected to report its first-quarter earnings of $2.35 per share, which represents year-over-year growth of over 37% from $1.71 per share seen in the same quarter a year ago.

The Menlo Park, California-based social media conglomerate would post revenue growth of over 33% to around $23.6 billion. It is worth noting that the company, on average, has delivered an earnings surprise of over 22% in the last four quarters.

“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 ~28% GAAP opex (excl. one-time items) growth in 2021, implying an incremental ~$15bn 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 ~29% CAGR (2019-2022).”

APPLE: The consumer electronics giant would post its second-quarter earnings of $0.99 per share, which represents year-over-year growth of over 54% from $0.64 per share seen in the same quarter a year ago. The iPhone manufacturer would post revenue growth of over 33% to around $77.6 billion.

“We expect the strength of Apple’s broad portfolio of products & services to help re-rate AAPL shares, amplified by today’s product launch event. We forecast Product growth of 43% Y/Y and Services growth of 19% putting us at $80.2B in revs and $1.03 in EPS for the March Q, 4-5% ahead of consensus,” noted Katy Huberty, equity analyst at Morgan Stanley.

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

Ticker Company EPS Forecast
SHOO Steven Madden $0.19
IPG Interpublic Of Companies $0.16
SNY Sanofi $0.83
GD General Dynamics $2.31
APH Amphenol $0.44
SIRI Sirius XM $0.06
LIVN LivaNova PLC $0.15
SLAB Silicon Laboratories $0.76
HUM Humana $7.21
AVY Avery Dennison $2.01
OSK Oshkosh $1.14
NYCB New York Community Bancorp $0.27
DAN Dana $0.46
MAS Masco $0.66
TEVA Teva Pharmaceutical Industries $0.58
ETR Entergy $1.24
BA Boeing -$1.17
EVR Evercore Partners $2.63
ROL Rollins $0.11
YUM Yum Brands $0.85
PAG Penske Automotive $1.81
BCO Brinks $0.71
R Ryder System $0.58
CIT CIT $0.98
TDY Teledyne Technologies $2.59
TKR Timken $1.20
OC Owens Corning $1.42
SAIA Saia $1.37
SWK Stanley Black & Decker $2.56
MCO Moody’s $2.80
PB Prosperity Bancshares $1.38
BSX Boston Scientific $0.30
GIB CGI Group USA $1.03
CME CME $1.75
ROK Rockwell Automation $2.15
SPOT Spotify -$0.57
GRMN Garmin $0.88
SIX Swiss Exchange -$1.29
IART Integra LifeSciences $0.56
BPOP Popular, Inc. $1.91
BXMT Blackstone Mortgage $0.61
AER AerCap $1.13
LFUS Littelfuse $1.92
VRT Veritas Pharma $0.12
SLGN Silgan $0.71
HELE Helen Of Troy $1.56
HES Hess $0.36
ADP ADP $1.82
NSC Norfolk Southern $2.55
SC Santander Consumer USA $1.45
RJF Raymond James Financial $2.09
PPC Pilgrim’s Pride $0.27
PSA Public Storage $2.70
FORM FormFactor $0.39
PTC PTC $0.72
EQIX Equinix $6.63
VVV Valvoline Inc $0.37
ESI Itt Educational Services $0.32
MXL MaxLinear $0.50
CLR Continental Resources $0.30
BSMX Santander Mexico Fincl Gp Sab Decv $0.17
PDM Piedmont Office Realty $0.47
WCN Waste Connections $0.67
AVB AvalonBay Communities $1.94
PGRE Paramount Group $0.21
AGI Alamos Gold $0.13
EBAY eBay $1.07
MAA Mid-America Apartment Communities $1.61
OI Owens-Illinois $0.28
QCOM Qualcomm $1.67
ALGN Align Technology $2.00
DRE Duke Realty $0.39
NGVT Ingevity Corp $1.07
AZPN Aspen Technology $1.16
NLY Annaly Capital Management $0.26
FB Facebook $2.35
MC Moelis & Company $0.87
NOVA Nova Mentis Life Science Corp -$0.34
MGM MGM Resorts International -$0.86
MTH Meritage Homes $2.52
GRUB GrubHub $0.03
CNO CNO Financial Group $0.50
WERN Werner $0.63
CONE CyrusOne $0.98
AR Antero Resources $0.39
AMED Amedisys $1.43
KRC Kilroy Realty $0.99
EXR Extra Space Storage $1.48
AFL Aflac $1.20
AVT Avnet $0.56
BLKB Blackbaud $0.63
WELL Welltower Inc $0.75
TROX Tronox $0.27
AUY Yamana Gold USA $0.07
AM Antero Midstream Partners $0.22
CNMD CONMED $0.43
CHX ChampionX Corp $0.05
RE Everest Re $4.55
HOLX Hologic $2.62
CDE CoEUR Mining $0.08
MOH Molina Healthcare $3.78
TYL Tyler Technologies $1.31
AXS Axis Capital $0.65
SIGI Selective $0.97
NOW ServiceNow $1.34
CAKE Cheesecake Factory -$0.15
MUSA Murphy USA $0.83
MTDR Matador Resources $0.37
ALSN Allison Transmission $0.90
RNR Renaissancere $0.74
PEGA Pegasystems $0.02
CCS Century Communities $1.52
UCTT Ultra Clean $0.82
TTEK Tetra Tech $0.75
CINF Cincinnati Financial $1.27
F Ford Motor $0.15
ASGN On Assignment $1.10
AAPL Apple $0.99
WH Wyndham Hotels & Resorts Inc $0.25
ORLY O’Reilly Automotive $5.27
ISBC Investors Bancorp $0.29
LOGI Logitech Internationalusa $0.96
SID Companhia Siderurgica Nacional $0.28
YMZBY Yamazaki Baking ADR $1.17
GSK Glaxosmithkline $0.59
LPL Lg Display $0.29
TS Tenaris $0.06
TOTDY Toto $0.51
UMC United Microelectronics $0.10
ASX Advanced Semiconductor Engineering $0.12
DB Deutsche Bank $0.49
FNF Fidelity National Financial $1.28
WWW Wolverine World Wide $0.38
DISCA Discovery Communications $0.66
DISCB Discovery Communications Discb $0.66
DISCK Discovery Communications Disck $0.66
EAT Brinker International $0.79
FCNCA First Citizens Bancshares $12.11
PAC Grupo Aeroportuario Del Pacifico $0.64

Thursday (April 29)

IN THE SPOTLIGHT: AMAZON.COM

The eCommerce leader for physical and digital merchandise is expected to report its first-quarter earnings of $9.98 per share, which represents year-over-year growth of about 100% from $5.01 per share seen in the same quarter a year ago.

The Seattle, Washington-based multinational technology giant would post revenue growth of about 40% to around $105.1 billion. It is worth noting that the company, on average, has delivered an earnings surprise of about 187% in the last four quarters.

“We expect strong 1Q21 results with revenue and Op Inc. 3% & 11% above consensus estimates. Key rev. drivers include eCommerce, AWS, Adv., & Sub. rev. Our 1Q21 Op Inc. est. is driven by AWS & Adv., offset partially by COVID-19 costs. 2Q21 revenue guide is key, we expect AMZN eCommerce growth of +15% y/y despite tough comps. We remain bullish on’21 Op margin expansion, our est. is 17% above consensus,” noted John Blackledge, equity analyst at Cowen.

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

Ticker Company EPS Forecast
RDSA Royal Dutch Shell £0.83
AGIO Agios Pharmaceuticals -$1.23
STM Stmicroelectronics $0.39
JHG Janus Henderson Group PLC $0.82
THRM Gentherm $0.58
FBC Flagstar Bancorp $2.65
CAT Caterpillar $1.93
TFX Teleflex $2.44
CNX Consol Energy $0.28
CBRE CBRE Group Inc $0.70
AMT American Tower $2.32
BLMN Bloomin’ Brands $0.34
TREE LendingTree -$0.21
TAP Molson Coors Brewing -$0.12
MO Altria $1.04
SAH Sonic Automotive $0.94
TROW T. Rowe Price $2.90
VC Visteon $0.32
TW Towers Watson $0.43
HSY Hershey $1.82
CCOI Cogent Communications $0.18
KEX Kirby $0.14
SPGI S&P Global Inc $3.13
BAX Baxter International $0.64
SO Southern Co. $0.83
SWI Solarwinds $0.19
BGCP BGC Partners $0.19
COHU Cohu $0.79
CWT California Water Service -$0.06
CFR Cullen/Frost Bankers $1.42
LH Laboratory Of America $7.34
TMHC Taylor Morrison Home $0.76
GPI Group 1 Automotive $4.39
NEM Newmont Mining $0.80
FMX Fomento Economico Mexicano Sab $8.67
AOS A.O. Smith $0.56
WAB Westinghouse Air Brake Technologies $0.85
WEX WEX $1.58
COLB Columbia Banking System $0.63
WLTW Willis $3.26
PATK Patrick Industries $1.32
VLY Valley National Bancorp $0.29
MMP Magellan Midstream Partners $0.87
KHC Kraft Heinz $0.60
IP International Paper $0.59
BC Brunswick $1.45
KIM Kimco Realty $0.30
KDP Keurig Dr Pepper $0.31
TMO Thermo Fisher Scientific $6.69
EEFT Euronet Worldwide $0.35
MTSI MACOM Technology Solutions $0.47
EXLS ExlService $0.99
AIT Applied Industrial Technologies $0.98
COR CoreSite Realty $1.33
STRA Strayer Education $1.49
IDA IdaCorp $0.83
GNRC Generac $1.87
ALNY Alnylam Pharmaceuticals -$1.73
XEL Xcel Energy $0.61
AIMC Altra Industrial Motion $0.76
TPX Tempur Sealy International $0.51
OSTK Overstock $0.07
NOC Northrop Grumman $5.48
FCN FTI Consulting $1.18
MDC MDC $1.37
SYNH Syneos Health Inc $0.74
BMY Bristol-Myers Squibb $1.83
DPZ Dominos Pizza $2.94
ATI Allegheny Technologies -$0.24
CMCSA Comcast $0.59
CG Carlyle $0.54
MRK Merck & Co $1.62
PCG PG&E $0.27
MA Mastercard $1.57
MCD McDonalds $1.81
LKQ LKQ $0.63
CMS CMS Energy Corporation $1.19
AGCO AGCO $1.11
ICE Intercontinental Exchange $1.30
PH Parker-Hannifin $3.75
CFX Colfax $0.39
BCE BCE (USA) $0.58
EME EMCOR $1.17
ABMD Abiomed $1.10
ERJ Embraer -$0.33
TXT Textron $0.47
CARR Carrier Global Corp $0.38
PRFT Perficient $0.68
KBR KBR $0.46
CHD Church Dwight $0.80
WST West Pharmaceutical Services $1.42
ADS Alliance Data Systems $3.23
CTXS Citrix Systems $1.42
NVT nVent Electric PLC $0.35
CUZ Cousins Properties $0.70
RMD ResMed $1.22
CUBE CubeSmart $0.45
TXRH Texas Roadhouse $0.59
GLPI Gaming And Leisure Properties $0.83
KLAC KLA-Tencor $3.59
OFC Orate Office Properties $0.55
FIVN Five9 $0.13
TEX Terex $0.22
X United States Steel $0.91
CRUS Cirrus Logic $0.69
SWKS Skyworks Solutions $2.34
WDC Western Digital $0.67
SWN Southwestern Energy $0.25
ACHC Acadia Healthcare $0.45
DLR Digital Realty $1.57
BVN Compania De Minas Buenaventura $0.11
GILD Gilead Sciences $2.02
AEM Agnico Eagle Mines USA $0.57
COLM Columbia Sportswear $0.33
TWTR Twitter $0.14
AJG Arthur J. Gallagher $1.83
FHI Federated Hermes Inc $0.77
PEB Pebblebrook Hotel -$0.44
CWST Casella Waste Systems $0.04
CXP Columbia Property $0.33
CPT Camden Property $1.23
COG Cabot Oil Gas $0.33
SGEN Seattle Genetics -$0.59
ATR AptarGroup $0.90
LPLA LPL Financial $1.58
EVTC Evertec $0.53
EXPO Exponent $0.43
DXCM Dexcom $0.31
ZEN Zendesk $0.12
PFPT Proofpoint $0.39
THG Hanover $0.75
FSLR First Solar $1.00
FBHS Fortune Brands Home Security $1.04
FWRD Forward Air $0.56
MMSI Merit Medical Systems $0.37
SPSC SPS Commerce $0.38
INT World Fuel Services $0.28
SKYW SkyWest $0.89
ERIE Erie Indemnity $1.41
POWI Power Integrations $0.55
ROG Rogers $1.79
OMCL Omnicell $0.67
BIO Bio-Rad Laboratories $2.50
HIG Hartford Financial Services $0.75
EMN Eastman Chemical $1.91
HP Helmerich & Payne -$0.61
EBS Emergent BioSolutions $1.55
PACB Pacific Biosciences Of California -$0.45
AMZN Amazon $9.98
FTNT Fortinet $0.74
NATI National Instruments $0.31
ALGT Allegiant Travel -$2.59
FTV Fortive Corp $0.60
MHK Mohawk Industries $2.80
BMRN BioMarin Pharmaceutical $0.27
VRTX Vertex Pharmaceuticals $2.76
MGNX MacroGenics -$0.51
KMPR Kemper $1.35
MDRX Allscripts Healthcare Solutions $0.15
COP ConocoPhillips $0.60
SHEN Shenandoah Telecommunications $1.01
USM United States Cellular $0.43
MTZ MasTec $0.77
GT Goodyear Tire & Rubber $0.08
TDS Telephone Data Systems $0.44
ETN Eaton $1.25
REGI Renewable Energy $0.20
PRAH PRA Health Sciences Inc $1.34
HUBG HUB $0.46
TPR Tapestry Inc $0.30
PRGO Perrigo $0.56
BLDR Builders Firstsource $0.81
BBD Banco Bradesco $0.10
TPL Texas Pacific Land $5.79
ASEKY Aisin Seiki Co $0.88
NLSN Nielsen $0.32
ARW Arrow Electronics $2.27
CLGX CoreLogic $0.97
TFSL Tfs Financial $0.07
UBSI United Bankshares $0.74
GRA W.R. Grace $0.73
PTCT PTC Therapeutics -$1.59
INSM Insmed -$1.02
TOELY Tokyo Electron Ltd PK $1.25
BBVA Banco Bilbaoizcaya Argentaria $0.15
GOL Gol Linhas Aereas Inteligentes -$0.91
SRCL Stericycle $0.59
AUOTY AU Optronics $0.33
CX Cemex Sab De Cv $0.03
PBR Petroleo Brasileiro Petrobras $0.12
TOT Total $0.85
AMRN Amarin -$0.03
TWOU 2U -$0.23
LYG Lloyds Banking $0.07
BEN Franklin Resources $0.74

Friday (April 30)

Ticker Company EPS Forecast
LYB LyondellBasell Industries $2.51
AVNT Avient Corp $0.72
BCPC Balchem $0.80
JCI Johnson Controls $0.49
HOCPY Hoya Corp $0.81
CL Colgate-Palmolive $0.79
BCS Barclays $0.41
AON AON $4.05
HUN Huntsman $0.58
PNM PNM Resources $0.19
XOM Exxon Mobil $0.60
CHTR Charter Communications $4.25
PSX Phillips 66 -$1.28
ITW Illinois Tool Works $1.90
GWW Grainger $4.31
HRC Hill-Rom $1.43
POR Portland General Electric $0.87
BSAC Banco Santander Chile $0.41
ABBV AbbVie $2.81
WY Weyerhaeuser $0.88
WPC W. P. Carey $0.51
SHLX Shell Midstream Partners $0.35
CVX Chevron $0.90
NWL Newell Brands Inc $0.13
MITSY Mitsui & Company $10.53
CLX Clorox $1.47
LAZ Lazard $0.88
LHX L3Harris Technologies Inc $2.96
KMTUY Komatsu $0.32
BNPQY BNP Paribas ADR $0.59
APELY Alps Electric $0.27
ALNPY ANA Holdings ADR -$0.90
PSXP Phillips 66 Partners $0.83
AZN Astrazeneca $0.68

 

Facebook Begins Testing Ads in Instagram Reels

By Sheila Dang

The company is seeking to capitalize on its popularity in India, a fast-growing social media market, while rival TikTok has been banned from the country since last year. Facebook has said it plans to test other features in India, such as letting content creators share Reels videos on their Facebook accounts.

The introduction of ads is an “indication of how strong the momentum is for Reels,” said Carolyn Everson, vice president of global business group at Facebook, in an interview. Everson declined to share usage metrics for Reels.

Facebook also announced Thursday it will let advertisers select categories of video content they want to place ads on, such as videos about children and parenting, animals and pets or fitness and workouts.

The effort is Facebook’s biggest move yet to let brands advertise alongside content subjects. Advertisers typically use Facebook to target certain users by their interests.

“This is a big deal for marketers,” Everson said.

Facebook added it will roll out sticker ads for Facebook Stories in the coming weeks. Brands can create stickers that creators will place in their Stories, and influencers will earn a cut of any sales made through the sticker ads.

The feature is part of Facebook’s push to court content creators who are increasingly making money directly from fans and followers through platforms such as audio chat app Clubhouse and membership site Patreon.

(Reporting by Sheila Dang; Editing by Sam Holmes)

How Might NFLX Share Price React to Q1 Earnings?

Recall that the pandemic prompted a massive front-loading of Netflix subscriptions, as households starved for entertainment amid lockdowns drove the company’s global customer base past the 200 million mark by the end of last year.

For Q1 2021, Netflix has guided for an additional 6 million subscribers, while Wall Street expects that tally to be closer to 6.3 million. That’s still a pretty healthy figure, even though it pales in comparison to the 15.77 million new paying members who signed on during the same period a year ago.

Sauntering subscriber and share price growth

Looking ahead, shareholders appear cognizant that Netflix would find it tough to replicate the growth spurts it experienced last year. The same can be said for its share price.

After surging by 67.1% in 2020, Netflix has only managed a gain of 2.54% so far this year. That’s slower in comparison to the year-to-date performances of:

Netflix has clearly been a laggard within the famed FAANG group, with the streaming company now languishing 5.44% below its record high, set on 20 January 2021, which was also the day after its last quarterly earnings announcement.

From a technical perspective, Netflix’s share prices found support at its 200-day simple moving average (SMA) in March, using it as a platform to launch back above its 50-SMA this month. However, with the bullish momentum in the stock plateauing, while a close above the $555 mark having proved hard to come by since mid-February, Netflix could do with a positive catalyst to catch up with the rest of its peers.

Perhaps that catalyst may arrive at the company’s earnings release later today.

What are markets expecting for Netflix’s Q1 financial results?

Three words: record setting quarter.

Wall Street expects Netflix to post its highest-ever revenue and net profit for a single financial quarter. The top line is expected to breach the $7 billion mark for the first time in the company’s history, thanks to price hikes in the US, Germany, UK and Ireland. Meanwhile, the company’s adjusted net profit is slated to come in at $1.45 billion, and that should translate into an adjusted earnings per share of $3.18.

However, look beyond the historic numbers and the broader industry harbors troubling signs for Netflix.

Streaming wars eroding Netflix’s advantage

According to a report by Parrot Analytics, just over half (50.2%) of the original series that viewers worldwide wanted to watch online over the past three months were by Netflix. While that figure still dwarves second-placed Amazon Prime’s share of 12.2% for the same period (January-March 2021), Netflix’s market share has clearly dropped from the near-65% share it enjoyed some two years ago.

Within the US alone, the decline in Netflix’s market share is even more obvious. According to Bloomberg Intelligence data, Netflix’s share of the US streaming pie has gone from near-total dominance of 96.04% in Q1 2018 to just 44.43% as of Q4 2020.

As the competition for eyeballs intensifies, Netflix is set to find it harder to gain more subscribers.

Netflix not taking things lying down

That doesn’t spell the end of Netflix. This year alone, the world’s largest streaming platform aims to release over 70 movies. The streaming giant earlier this month also announced a deal with Sony, which is reportedly worth over $1 billion. The agreement gives Netflix the rights to exclusively show Sony movies released from 2022 onwards after they’ve completed their theatrical runs.

That should keep their 210 million subscribers (estimated as of end-March) and counting, entertained with popular franchises such as “Jumanji” and “Spider Man” over the coming years, even with the potential prices hikes looming.

Armed with customer loyalty while flexing its pricing power, Netflix still has a lot within its arsenal to withstand the heightened competition for viewers’ attention.

How might Netflix’s share price react after Tuesday’s earnings?

Markets are pricing in a 7.2% move for Netflix’s share price when markets reopen on Wednesday. Although NFLX could go either way, it’s notable that shareholders typically sought to use these announcements as selling opportunities. The stock declined the day after 8 of the past 11 earnings.

Still, a 7.2% move to the upside would set a new record high for Netflix’s share price, while a similar-sized move to the downside could see the stock looking for support around its 200-SMA once more.

How exactly will this NFLX stock react this week? We’ll just have to stay tuned and watch the drama unfold.

Written on 20/04/2021 02:00 GMT by Han Tan, Market Analyst at FXTM

For more information, please visit: FXTM

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Twitter Could Rally to 100

Twitter Inc. (TWTR) has rallied more than 14% since Monday’s opening bell and may be engaged in a long-awaited breakout run above resistance in the mid-70s, posted just six weeks after the social media giant came public in 2013. The sky’s the limit if that happens, as we have seen with other big tech leadership in the last decade. A new advertising platform has energized the latest uptick but the initiative has been adding points since it was first announced in 2020.

Political Pressure Eases

Social media sentiment has steadily improved since the 2020 presidential election, which culminated in Twitter and Facebook Inc (FB) banning President Donald Trump for Terms of Service violations. In addition, there has been less talk about a repeal of FCC Section 230 liability protections under the Biden administration and a recent Congressional hearing on big tech abuse proved to be little more than off-Broadway theater.

The company took another step to bolster ad revenue on Thursday, hooking up with research firm Nielsen (NLSN). Twitter executive Doug Brodman crowed about the partnership, noting “Nielsen’s cross-media suite will make it easier to augment our client’s video strategy and planning with Twitter’s premium video inventory and optimize audience reach and frequency alongside other top video platforms. Ultimately, this expanded partnership brings increased transparency, clarity and value to Twitter’s video solutions.”

Wall Street and Technical Outlook

Wall Street analysts still have not jumped on the bull bandwagon, with a modest ‘Hold’ rating based upon 10 ‘Buy’, 25 ‘Hold’, and 4 ‘Underweight’ recommendations. In addition, four analysts recommend shareholders close positions and move to the sidelines. Price targets currently range from a low of just $30 to a Street-high $95.00 while the stock is now trading about $2 below the median $72.50 target.

Twitter ended a long-term decline in the mid-teens in 2017 and turned higher, stalling in the mid-40s in 2018. A 2019 breakout attempt failed, yielding a two-year low during the pandemic decline, followed by an uptick that reached the 2013 high at 74.73 in February 2021. A breakout failed after hitting an all-time high at 80.75 while the decline into March found support at the 50-day moving average. Positive price action since that time bodes well for a durable breakout and rally into triple digits.

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

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

Twitter Gains Amid Clubhouse Buyout Speculation

Twitter, Inc. (TWTR) shares added nearly 3% Wednesday after Bloomberg reported that the social media giant considered acquiring popular invitation-only audio-chat app, Clubhouse. The platform allows users to host shows, listen to panel discussions and engage in live chats.

People familiar with the matter said both parties discussed a possible valuation of $4 billion for Clubhouse but added that the negotiations had ceased. A potential buyout would have brought across the app’s 10 million active weekly users and complemented Twitter’s own recently launched beta-stage audio offering, Spaces. Such is the success of the Clubhouse app, other tech companies, including Facebook, Inc. (FB), Microsoft Corporation (MSFT), and Salesforce.com, inc. (CRM) have begun to develop similar features on their social media platforms.

As of April 8, 2021, Twitter stock has a market value of $55.1 billion and trades up 27.41% YTD. Over the past 12 months, the shares have surged nearly 170%. From a valuation standpoint, the stock trades 46% above its five-year average forward earnings multiple of 49 times.

Wall Street View

In February, Piper Sandler analyst Thomas Champion bumped up the investment firm’s price target on the stock to $61 from $45 while reiterating his ‘Neutral’ rating. Champion believes the company sits well-positioned to capitalize on daily active user growth it gained from the U.S. election. He also likes improvements the social media giant has made to its products and advertising.

Elsewhere, the stock receives 25 ‘Hold’ ratings, 10 ‘Buy’ ratings, 4 ‘Sell’ ratings, and 1 ‘Underweight’ rating. Twelve-month price targets range from a Street-high $95 to a low of $30. Through Wednesday’s close, the shares trade 5% below the median analyst price target of $72.50.

Technical Outlook and Trading Tactics

Twitter’s share price has remained in a steady uptrend since the 50-day SMA crossed above the 200-day SMA last summer. After a recent retracement to the 50-day SMA, the stock has regained upside momentum, with the MACD moving above its trigger line to generate a buy signal.

Active traders who buy here should look for an initial retest of all-time high (ATH) at $80.75, followed by a possible move higher. Protect against losses by placing a stop-loss order either beneath the 50-day SMA or under last month’s swing low at $59.28, depending on personal risk tolerance.

For a look at today’s earnings schedule, check out our earnings calendar.

Gold Futures Closed Fractionally Higher on Dollar Weakness and Selling Pressure

Dollar weakness was responsible for all of today’s gains as market participants bid the precious yellow metal lower by actively selling today.

gold april 5

After the three-day holiday weekend, U.S. equities had respectable gains with the Dow Jones Industrial Average gaining just over 393 points, which is a net gain of 1.13% and closed at its highest recorded price level of 33,527.19. The S&P 500 also closed at a new record high after factoring in today’s 58-point gain (+1.44%)., Currently, the index is at 4077.91. Although the NASDAQ composite did not close at a new all-time high it had the largest percentage gains of the three major indices. After factoring in today’s 225-point gain (+1.67), the heavy tech index closed at 13,705.59. A major bounce in the FANG stocks was largely responsible for today’s sizable gains in the NASDAQ with Facebook, Google, Microsoft, and Tesla providing strong tailwinds which led to the 1.67% gain in the NASDAQ.

In both gold futures and spot pricing it was dollar weakness that held any losses to a minimum. The dollar index lost 44 points, or -0.47% and is currently fixed at 92.61. According to the KGX (Kitco Gold Index) spot gold is currently fixed at $1728.10 which is a net decline of $2.20 on the day. On closer inspection market participants bid the precious metal lower by $9.50. Concurrently dollar weakness contributed $7.30 of value resulting in today’s marginal decline of $2.20.

gold HA chart

The cryptocurrencies, specifically Bitcoin futures which trades on the Chicago Mercantile Exchange closed, in essence, unchanged but still remained extremely strong with a single coin valued just shy of $60,000 at $59,525.

While gold futures were able to eke out a fractional gain the same cannot be said for silver. Silver futures basis the most active May contract lost approximately 3 ½ cents in trading today (-0.15%) and is currently fixed at $24.915.

Today Reuters reported that the service sector gauge surged to a record high in March based on strong growth in new orders.

“A measure of U.S. services industry activity surged to a record high in March amid robust growth in new orders, in the latest indication of a roaring economy that is being boosted by increased vaccinations and massive fiscal stimulus.”

The record numbers reported from the Institute of Supply Management (ISM) coupled with Friday’s jobs report which revealed that the United States added 916,000 jobs last month (which is the largest monthly gain since August) clearly underscores that the economy in the United States is truly rebounding as the economic scenario in the United States continues to gain momentum. Considering those factors gold and silver prices held up rather well.

For more information on our service, simply use this link.

Wishing you, as always, good trading and good health,

Gary Wagner

 

S&P 500 Moves Closer To The 4000 Level

Tech Stocks Gain Ground As Treasury Yields Decline

S&P 500 futures are gaining ground in premarket trading as traders are optimistic on Biden’s infrastructure plan.

Interestingly, Treasury yields are moving lower despite the announcement of a roughly $2 trillion plan, which is bullish for tech stocks. Apple, Facebook, Microsoft and other leading tech shares are gaining ground in premarket trading.

Meanwhile, the U.S. dollar pulls back against a broad basket of currencies which is bullish for precious metals which have a chance to continue their rebound. Gold managed to settle above the $1700 level and is moving towards the resistance at the 20 EMA at $1730, providing additional support to shares of gold miners.

WTI Oil Tries To Settle Below The $60 Level As Traders Wait For Results Of OPEC+ Meeting

Today, OPEC+ members meet virtually to discuss the current situation in the oil market. Europe is facing a third wave of the virus, and European countries have already extended virus-related restrictions until late April. The situation in Brazil and India is also moving in the wrong direction, so oil demand recovery remains fragile.

According to recent reports, OPEC+ will choose between keeping current production cuts in place and gradually increasing production. Obviously, the market would like to see the extension of current production cuts.

At the same time, it remains to be seen whether the potential gradual increase of production levels will put additional pressure on the oil market.

Initial Jobless Claims Increase To 719,000

The U.S. has just provided Initial Jobless Claims and Continuing Jobless Claims reports.

The Initial Jobless Claims report indicated that 719,000 Americans filed for unemployment benefits in a week compared to analyst consensus of 680,000. The previous report was revised from 684,000 to 658,000. Continuing Jobless Claims declined from 3.84 million (revised from 3.87 million) to 3.79 million, mostly in line with the analyst consensus.

The U.S. will soon release the final reading of Manufacturing PMI report which is projected to show that Manufacturing PMI grew from 58.6 to 59. Unless the report is much worse than the analyst estimate, it should not have a major impact on today’s trading.

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

Facebook Could Rally to 400

Facebook Inc. (FB) has shaken off all sorts of political headwinds, sidestepping ferocious opposition from the conservative side of the aisle, and appears poised to break out in a major uptrend that could target 400. If so, it will become the second member of the legendary FAANG quintet to hit new highs in 2021, trailing only Alphabet Inc. (GOOG), which broke out after a strong January earnings report.

Political Ad Moratorium Ends

CEO Mark Zuckerberg appeared before Congress last week with other tech titans, listing his efforts to combat misinformation and proclaiming limited support for new transparency and liability rules. Despite the politics, most investors are still focused on advertising revenue rather than keeping bad players off the platform and the Mar. 3 decision to resume political ads has had an immediate impact on sentiment, lifting the stock to a 6-month high.

Deutsche Bank analyst Lloyd Walmsley raised his target to $385 on Monday, noting “focus is starting to shift away from fears around iOS changes towards a continued ad recovery and benefits from more eCommerce activity shifting into Facebook’s platform. In addition to higher estimates, some fading fears around overhangs can drive a return to FB’s multiple premium to the S&P 500 (at parity today vs. a historical 20% premium), driving a catch-up trade in FB shares that have lagged year to date”.

Wall Street and Technical Outlook

Wall Street consensus has barely budged despite the political intrigue, with a ‘Buy’ rating based upon 39 ‘Buy’, 4 ‘Overweight’, 5 ‘Hold’, and 2 ‘Sell ‘recommendations. Price targets range from a low of $220 to a Street-high $418 while the stock is set to open Monday’s session more than $75 below the median $350 target. This placement should improve as analysts look past first quarter results, which may have been hurt by the moratorium and winter’s pandemic surge.

Facebook completed a round trip into the 2018 high at 218.62 in January 2020 and fell nearly 40% into March. It returned to resistance for the third time in May and broke out, posting an all-time high at 304.67 in August. The trading range since that time has held 200-day moving average support while weekly and monthly relative strength readings have slowly crossed into buy cycles, building a tailwind that could trigger a breakout early in the second quarter.

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. 

Stocks Retreat Ahead Of Fed Interest Rate Decision

It’s Fed Day

S&P 500 futures are losing ground in premarket trading while traders wait for the Fed Interest Rate Decision and the subsequent commentary.

The Fed has previously signaled that it was not going to change the interest rate anytime soon, so the market will remain focused on the commentary. Traders will pay special attention to Fed’s economic projections which will show whether Fed’s view of the economic rebound has changed.

The huge $1.9 trillion stimulus package may push inflation to higher levels, but the Fed was not concerned about higher inflation in its previous comments. Most likely, Fed Chair Jerome Powell will remain focused on the state of the job market which has not recovered from the blow dealt by the pandemic.

At the same time, Powell must find words to calm bond traders as Treasury yields have increased materially since the beginning of the year.

Treasury Yields Move To New Highs

Bond traders remain nervous ahead of the Fed Interest Rate Decision and sell U.S. government bonds, pushing their yields higher.

Currently, the yield of 10-year Treasuries is trying to settle above 1.66%, while the yield of 30-year Treasuries is testing the 2.41% level. It should be noted that Treasury yields have already recovered to pre-pandemic levels as traders expect higher inflation after the new round of economic stimulus.

Higher yields may put more pressure on tech stocks. Big tech stocks like Tesla, Apple, Facebook are down by more than 1% in premarket trading. If Jerome Powell fails to calm bond markets and yields continue to move higher, tech stocks will find themselves under more pressure.

Housing Starts Declined By 10.3% In February

The U.S. has just released Building Permits and Housing Starts reports. Building Permits decreased by 10.8% month-over-month in February compared to analyst forecast which called for a decline of 7.2%.

Housing Starts declined by 10.3% month-over-month while analysts expected that they would grow by 2.3%.

Housing market reports were weaker than expected, but it remains to be seen whether they will put additional pressure on the stock market as traders remain focused on the Fed.

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

Facebook to Label all Posts About COVID-19 Vaccines

By Elizabeth Culliford

The social media company said in a blog post it is also launching a tool in the United States to give people information about where to get COVID-19 vaccines and adding a COVID-19 information area to its photo-sharing site Instagram.

False claims and conspiracies about the coronavirus vaccines have proliferated on social media platforms during the pandemic.

Facebook and Instagram, which recently tightened their policies after long taking a hands-off approach to vaccine misinformation, remain home to large accounts, pages and groups that promote false claims about the shots and can be easily found through keyword searches.

Facebook’s Chief Product Officer Chris Cox said in an interview that the company had taken viral false claims “very seriously” but said there was “a huge gray area of people who have concerns…some of which some people would call misinformation and some of which other people would call doubt.”

“The best thing to do in that huge gray area is just to show up with authoritative information in a helpful way, be a part of the conversation and do it with health experts,” he added.

The company said it was labeling Facebook and Instagram posts that discuss the safety of COVID-19 vaccines with text saying the vaccines go through safety and effectiveness tests before approval.

In the blog post, it also said that since expanding its list of banned false claims about the coronavirus and vaccines in February, it has removed an additional 2 million pieces of content from Facebook and Instagram. Facebook said it had also implemented temporary measures including reducing the reach of content from users who repeatedly share content marked false by fact-checkers.

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

Facebook to Let Content Creators Earn Money from Short-Form Videos

The announcement came in a blog https://about.fb.com/news/2021/03/helping-content-creators-diversify-revenue-on-facebook where the company detailed its plans to help creators make more money, as smaller tech rivals have been racing to attract famous social media personalities.

Snapchat owner Snap Inc has been paying $1 million per day to creators who make viral short videos on its feature called Snapchat Spotlight. Twitter recently announced it would launch “Super Follows,” which would let users charge followers for exclusive content.

Facebook said creators can now earn ad revenue from videos as short as one minute, down from three minutes previously.

It will also begin testing ads that look like stickers, which content creators can use in their Facebook Stories to earn money.

More creators can now qualify to earn ad revenue from live-streaming videos on Facebook, previously an invite-only program.

The social media giant said it would also give away $7 million in free Facebook Stars, which users can pay to creators on Facebook Live as a form of tipping.

(Reporting by Munsif Vengattil in Bengaluru and Sheila Dang in Dallas; Editing by Devika Syamnath, Alexandra Hudson)

US Stock Markets Daily Recap: That’s Why You Buy the Dips

Days like Tuesday (Mar. 9) are why you buy the dips. It was nothing short of a reverse rotation from what we’ve seen as of late. Bond yields moved lower; tech stocks popped.

That’s why I called BUY on the Nasdaq.

Inflation fears and the acceleration of bond yields are still a concern. But it looks as if things are stabilizing, at least for one day. The lesson here, though, is to be bold, a little contrarian, and block out the noise.

Unless you’ve been living under a rock, you know that recent sessions have been characterized by accelerating bond yields driving a rotation out of high growth tech stocks into value and cyclical stocks that would benefit the most from an economic recovery. The Nasdaq touched correction territory twice in the last week and gave up its gains for the year.

But imagine if you bought the dip as I recommended.

The Nasdaq on Tuesday (Mar. 9) popped 3.7% for its best day since November. Cathie Wood’s Ark Innovation ETF (ARKK) surged more than 10% for its best day ever after tanking by over 30%. Semiconductors also rallied 6%.

Other tech/growth names had themselves a day too: Tesla (TSLA) +20%, Nvidia (NVDA) +8%, Adobe (ADBE) +4.3%, Amazon +3.8%, Apple (AAPL) +4.1%, and Facebook (FB) +4.1%.

In keeping with the theme of buying the dip, do you also know what happened a year ago yesterday to the date? The Dow tanked 7.8%!

There’s no way to time the market correctly. If you bought the Dow mirroring SPDR DJIA ETF (DIA) last March 9, you’d have still seen two weeks of pain until the bottom. However, you’d have also seen a gain of almost 36% if you bought that dip and held on until now.

Look, I get there are concerns and fears right now. The speed at which bond yields have risen is concerning, and the fact that another $1.9 trillion is about to be pumped into a reopening economy makes inflation a foregone conclusion. But let’s have a little perspective here.

Bond yields are still at a historically low level, and the Fed Funds Rate remains 0%.

So is the downturn overblown and already finished?

Time will tell. I think that we could still see some volatile movements over the next few weeks as bond yields stabilize and the market figures itself out. While I maintain that I do not foresee a crash like what we saw last March and feel that the wheels remain in motion for an excellent 2021, Mr. Market has to figure itself out.

A correction of some sort is still very possible. I mean, the Nasdaq’s already hit correction territory twice in the last week and is still about 3-4% away from returning to one. But don’t fret. Corrections are healthy and normal market behavior. Only twice in the last 38 years have we had years WITHOUT a correction (1995 and 2017).

Most importantly, a correction right now would be an excellent buying opportunity. Just look at the Nasdaq Tuesday (Mar. 9).

It can be a very tricky time for investors right now. But never, ever, trade with emotion. Buy low, sell high, and be a little bit contrarian. There could be some more short-term pain, yes. But if you sat out last March when others bought, you are probably very disappointed in yourself. Be cautious, but be a little bold too.

You can never time the market.

My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one to help people who needed help instead of the ultra-high net worth.

With that said, to sum it up:

There is optimism but signs of concern. The market has to figure itself out. A further downturn is possible, but I don’t think that a decline above ~20%, leading to a bear market, will happen any time soon.

Hopefully, you find my insights enlightening. I welcome your thoughts and questions and wish you the best of luck.

 Nasdaq- That’s Why I Called BUY

Figure 1- Nasdaq Composite Index $COMP

For the second time in a week, the Nasdaq hit correction territory and rocketed out of it. It saw its best day since November and proved once again that with the Nasdaq, you always follow the RSI. There could be more uncertainty over the next few weeks as both the bond market and equity market figure themselves out. However, the Nasdaq declines were very buyable, as I predicted.

If you bought the dip before Tuesday’s (Mar. 9) session, good on you. Be a little bit bold and fearless right now. Take Ark Funds guru Cathie Wood, for example. Many old school investors scoffed at her comments on Monday (Mar. 8) after she practically doubled down on her bullishness for her funds and the market as a whole. After crushing 2020, her Ark Innovation Fund (ARKK) tanked over 30%. Many called her the face of a bubble. Many laughed at her.

Tuesday, March 9, ARKK saw its best day in history.

I’m not saying that we’re out of the woods with tech. All I’m saying is don’t try to time the market, don’t get scared and have perspective.

The Nasdaq is once again roughly flat for the year, its RSI is closer to oversold than overbought, and we’re still below the 50-day moving average, near a 2-month low, and right around support at 13000.

It can’t hurt to start nibbling now. There could be some more short-term pain, but if you waited for that perfect moment to start buying a year ago when it looked like the world was ending, you wouldn’t have gained as much as you could have.

I think the key here is to “selectively buy.” I remain bullish on tech, especially for sub-sectors such as cloud computing, e-commerce, and fintech.

Mike Wilson , chief investment officer at Morgan Stanley, had this to say about recent tech slides- “I don’t think this is the end of the bull market or the end of tech stocks per se, but it was an adjustment that was very necessary.”

I like the levels we’re at, and despite the possibility of more “adjustments” in the short-run, it’s a good time to BUY. But just be mindful of the RSI, and don’t buy risky assets. Find emerging tech sectors or high-quality companies trading at a discount.

For an ETF that attempts to correlate with the performance of the NASDAQ directly, the Invesco QQQ ETF (QQQ) is a good option.

For more of my thoughts on the market, such as when small-caps will be buyable, more thoughts on inflation, and emerging market opportunities, sign up for my premium analysis today.

Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter – it’s absolutely free and if you don’t like it, you can unsubscribe with just 2 clicks. If you sign up today, you’ll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!

Thank you.

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

Matthew Levy, CFA
Stock Trading Strategist
Sunshine Profits: Effective Investment through Diligence & Care

* * * * *

All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits’ associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Matthew Levy, CFA, and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading, and speculation in any financial markets may involve high risk of loss. Matthew Levy, CFA, Sunshine Profits’ employees, and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

 

Too Tough to Buy Twitter at 60

Twitter Inc. (TWTR) reports Q4 2020 earnings after Tuesday’s closing bell in the United States, with analysts expecting a profit of $0.31 per-share on $1.19 billion in revenue. If met, earnings-per-share (EPS) will mark a 106% profit increase compared to the same quarter last year. The stock lost ground in October despite beating Q3 top and bottom line estimates after modest revenue growth failed to inspire buying interest.

No Backlash After Trump Ban

The social media sector sold off in January after banning Donald Trump for Terms of Service violations but an expected backlash never materialized. Ironically, punitive actions taken by Twitter and Facebook Inc. (FB) have lower the prospects for repeal of FCC section 230, which provides limited immunity for their platforms. The rule was a frequent Trump political target but the Biden administration is unlikely to bite the hand that feeds it.

KeyBanc Capital Markets analyst Justin Patterson upgraded Twitter to ‘Overweight’ in late January, noting, “Our view is that execution is improving, and the combination of a cyclical ad recovery and new products creates potential for revenue to outpace our above-consensus revenue estimates in 2021 and 2022. We see sustainable 20%+ annual revenue growth from the core business, with monetization of Revenue (estimated $36B TAM) and other new services creating significant option value.”

Wall Street and Technical Outlook

Wall Street consensus now stands at a skeptical ‘Hold’ rating based upon 12 ‘Buy’, 21 ‘Hold’, 1 ‘Underweight’, and 4 ‘Sell’ recommendations. Price targets currently range from a low of just $17 to a Street-high $67 while the stock has opened Tuesday’s U.S. session about $8 below the high target. Additional upside will be tough with this lofty placement but a strong quarterly report could generate higher targets.

The stock posted an all-time high at 74.73 a month after coming public in 2013 and sold off in a three-year downtrend. It broke out above tough resistance in the mid-40s in September 2020 and is now trading less than two points below the .786 Fibonacci selloff retracement level. This marks major resistance for uptrends cutting through old supply, raising odds for a reversal and intermediate correction that could offer a low risk buying opportunity in the 40s.

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. 

Facebook Earnings Beat Wall Street Estimates, But Shares Dip on 2021 Uncertainties

The world’s largest online social network Facebook reported better-than-expected earnings in the fourth quarter of 2020, largely driven by solid ad-revenue growth and advertiser demand during the holiday period.

Menlo Park, California-based social media conglomerate said its total revenue jumped 33% to $28.07 billion in the quarter ended December 31 from $21.08 billion a year earlier. That was higher than the Wall Street consensus estimate of $26.44 billion.

“Q4 results reinforce our conviction in Facebook (FB) as a top large-cap pick. 33% Y/Y rev growth was 6.5% ahead of the street and was supported by a 46% op. margin (18.8% ahead of the street). Forward rev guidance was conservative as usual, and we were not surprised to hear mgmt. point to decelerating growth in 2H21 (mostly due to iOS 14 changes and tough comps),” said Brent Thill, equity analyst at Jefferies.

“We are raising our FY21 revenue and EPS estimates by 3% and 5%, respectively. Our $350 price target implies 26x our FY22 EPS.”

Facebook said its net income rose to $11.22 billion, or $3.88 per share, which represents year-over-year growth of over 50% from the same quarter a year ago when the company reported $7.35 billion or $2.56 cents per share. The company said its monthly active users surged 12% to 2.80 billion, beating the Wall Street consensus estimate of 2.75 billion.

The world’s largest online social network expects to face more significant ad targeting headwinds in 2021. This includes the impact of platform changes, notably iOS 14, as well as the evolving regulatory landscape. While the timing of the iOS 14 changes remains uncertain, the company expects to see an impact beginning late in the first quarter.

Due to these uncertainties, Facebook shares fell about 2% to $267.00 in extended trading on Wednesday. However, the stock surged 33% in 2020.

Facebook Stock Price Forecast

Thirty-five analysts who offered stock ratings for Facebook in the last three months forecast the average price in 12 months at $329.53 with a high forecast of $375.00 and a low forecast of $205.00.

The average price target represents a 21.09% increase from the last price of $272.14. From those 35 analysts, 31 rated “Buy”, three rated “Hold”, and one rate “Sell”, according to Tipranks.

Morgan Stanley gave a base target price of $78 with a high of $126 under a bull scenario and $30 under the worst-case scenario. The firm currently has an “Overweight” rating on the social network’s stock.

Several other analysts have also recently commented on the stock. Jefferies raised the target price to $350 from $330. Piper Sandler upped the target price to $285 from $275. Pivotal Research increased the target price to $340 from $315. Baird raised the target price to $320 from $310.

In addition, Facebook had its target price lifted by research analysts at Deutsche Bank to $350 from $325. The firm presently has a “buy” rating on the social networking company’s stock. JP Morgan upped their price objective to $315 from $300 and gave the company a “buy” rating. Barclays upped their target price to $325 from $285 and gave the company an “overweight” rating.

Analyst Comments

“Monetization Potential: We are positive on Facebook’s (FB) 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 high and growing engagement we see monetization upside going forward,” said Michael Cyprys, equity analyst at Morgan Stanley.

“Investing from Position of Strength to Drive Faster Long-Term Growth: We are modeling 28% GAAP opex (excl. one-time items) growth in 2021, implying an incremental $15 billion 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 29% CAGR (2019-2022).”

Check out FX Empire’s earnings calendar

Facebook Stuck in Neutral Ahead of Earnings

Facebook Inc. (FB) reports Q4 2020 earnings after Wednesday’s U.S. closing bell, with Wall Street analysts looking for a profit of $3.20 per-share on $26.4 billion in revenue. If met, earnings-per-share (EPS) will mark a 25% profit increase compared to the same quarter in 2020. The stock fell more than 6% despite beating Q3 top and bottom line estimates in October but has carved little upside or downside since that time.

Ad Revenue vs. Political Headwinds

The stock topped out above 300 in August and eased into a trading range, with support below 250. Heavy criticism by the former president weighed on fourth quarter sentiment, with CEO Zuckerberg accused of bias against conservative opinions. The climax reached a boiling point after the insurrection, with Facebook and other social media outlets banning Donald Trump for inciting violence.  Even so, ad revenue is likely to be the final arbiter of 2021 price action.

Credit Suisse analyst Stephen Juour lowered his target to $325 last week, noting “advertiser checks are indicating better-than-expected ad budget growth for both Facebook and Instagram, and we raise our FX neutral revenue growth estimates for 4Q20, which now stand at 26% vs. prior 24%. We have anticipated a slower start to 2021 and have modestly lowered our growth expectations for 2021 to 26% vs. our prior 27%. We maintain our ‘Outperform’ rating”.

Wall Street and Technical Outlook

Wall Street consensus hasn’t budged in the last quarter, with a ‘Buy’ rating based upon 39 ‘Buy’, 3 ‘Overweight’, 6 ‘Hold’, and 1 ‘Sell’ recommendation. Price targets currently range from a low of $205 to a Street-high $397 while the stock opened Tuesday’s U.S. session more than $50 below the median $330 target. Diminishing political headwinds have impacted this humble placement, raising odds for higher prices in reaction to strong quarterly metrics.

Facebook topped out at 219 in 2018 and sold off after a privacy scandal, dropping to a two-year low at year’s end. The stock completed a round trip into the prior high in January 2020 and broke out in May, lifting into August’s all-time high at 304.67. Price action since that time has carved a trading range that now looks like a bearish descending triangle top. However, price structure also looks incomplete, suggesting it will be months before confirmed breakout or breakdown.

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.

Biden’s Presidency from a Market Perspective

Chief Market Analyst of XTB group discusses Biden’s presidency from a market perspective.

Watch this video to learn:

  • Key themes of Joe Biden’s presidency
  • Chances and risks for the markets
  • Present market situation on indices, fx and commodities
  • Key calendar positions for this week

Other top news this week include: