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Earth Curvature
You do not really need to climb all the stairs to visibly see the curvature of our planet. You may have to leave a densely populated area or simply visit the beach. You do not really have any constraints at this stage to see the results of the third quarter. Just two weeks.
As they say every year at the NFL draft … the banks are at the hour. In exactly fourteen days, JP Morgan (JPM) , Citigroup (C) and Wells Fargo (WFC) all go to the plate and report their third quarter numbers. Then, the presentation of what we call "the win season" for dogs and ponies will follow.
As a person who closely watches these events and risks his own skin in this game, it seems that we spend more time focusing on the events of the season than we do in the meantime. Unlike some high-profile people who have talked about the merits of quarterly reporting, I will stay focused on the mission to be accomplished and, when the time comes, adapt to the environment I encounter.
To take shape
For the next reporting season, the estimates are, for the most part, a small number. Do not be alarmed by this. This, from my point of view, is completely normal. According to Factset, the S & P 500 T3 earnings estimates are at a growth rate of 19.3% year-on-year. It's down 19.8% about a month ago.
The quality of profits may be subject to factors such as buyback programs that create "artificial" shortages of available supply. Besides the fact that there are fewer names on the public market, this should only surprise the greener investors who, over time, have recorded higher valuations. In my opinion, the use of historical valuation measures that go back beyond a few years is a futile exercise.
Incredibly, while the S & P 500 grew 9% this year, forward looking estimates moved 18.3 times early in the year to 16.9, which is their current level. This makes the action at the point of sale really more impressive.
However, more than moderate profits to some extent, I like to see revenue growth and projections for growth of 7.5%, unchanged from the previous month. This means that analysts expect to see a little more compression of margins than they were during those long days of summer.
Yes, the increase in input costs is now one thing. Tighter markets for labor and materials, as well as rising interest costs are there. Blame tariffs. Blame the Fed. Or maybe just adapt, because you are a warrior.
Does this mean that we are using the normal flow of investor funds that occurs during the last two months of the year in the first half of January to increase the cash portion of our portfolios? Right now, it's actually like that that I think. I know you'd like to hear something concrete about it, but the concrete is sold in 80-pound bags. It is money we are talking about. My money. Which means I can think more about it. Do not worry. I will write about it. God willing.
Beyond your control
The wisdom of knowing the difference between things you can change and things that are beyond your control. Serenity Prayer If you do not know him, look for him. Friday is the last day of the month – and quarter, gang. You know what it means if you have been around the block more than once.
While the S & P 500 experienced a 9% increase over the year, the index saw most of this increase (8%) over three months. The index is stable for the month of September, but the three-month performance will force pension funds whose mandates require a quarterly rebalance to exert pressure on the stock markets later on Friday.
It would be more noticeable if the month was also strong, but you could still see a funky action this afternoon that leaves a little perplexing. Do not be shaken by all that you believe in. There is usually a counter-strike on Monday morning.
In addition, treasury bill yields, although somewhat compressed in the long run since the Fed meeting this week, are significantly higher over the same three-month period. There is more. You all know that the fiscal year ends for the federal government this weekend. You may not be aware that most mutual funds operate on the same fiscal schedule, which means that just about all of these portfolio managers are in Friday and everyone is thinking of what they can or can not do. should not be done to put the finishing touches on the annual performance. This is a joker, because the weaknesses could be random, but it could also act as a counterpoint to the mandates mentioned above. Funky.
Not funny at all
It should be funny, but it is not. Not funny at all. Incredibly, there are more problems for Tesla (TSLA) CEO Elon Musk. TSLA shares collapsed after hours of trading on Thursday, as the US Securities and Exchange Commission sued the famous inventor for the infamous tweet of August 7, where he said he was considering taking over company in private. The most prominent words of what was really a tweet-storm at the time of the bazaar were the phrase "secured financing". This pursuit of the SEC comes just two weeks after the US Justice Department opened its own criminal investigation into the same message on social media. So what about this new information?
This costume seeks to ensure that Elon Musk is no longer serving the firm in a leadership role. In fact, according to the Financial Times, the lawsuit could prevent Mr. Musk from performing the duties of officer or director in a public company.
According to the SEC's own lawsuit: "The Musk statement posted via Twitter incorrectly stated that, if that was his choice, he was virtually certain to be able to take Tesla at a higher purchase price at Tesla's current rate, the financing of this multi-billion dollar deal was guaranteed and the only eventuality was a shareholder vote. "Sensational.
The smartest thing that I did as a trader last summer was to make short with Tesla on August 7th after realizing that Musk's cult (with damaged shorts) was buying the name on a tweet who smelled bad. The stupidest thing that I did as a trader last summer was to cover this short stance for lunch money, while I probably could have fed a whole village if I had not been shaken by Musk's efforts to find funding. That said, I'm lucky. I made a profit. Many have not done so, and those who have lost money by trading on this news will have a legitimate reproach.
Tesla goes from the front?
The stock should open down the range proposed on this six-month chart. You will not capture any marks made by you on this board at this stage. Legal issues can not be explained by technical analysis. As a merchant, I would not touch this one with a ten-foot post or your money. It's the case. The people who invested in Tesla really invested in Elon Musk. It's their guy. It's their Batman. They believe in him. They will not be shaken as easily as when I was in August.
The result here is everything. If Musk is excluded from this venture, as with any sinking ship, the rats will eventually run away. However, if there is a kind of monetary settlement between Musk and the SEC that leaves him in charge, even with the ongoing criminal investigation, Musk will not abandon him.
Bottom Line: You can do what you want. I remain a long time some actions of General Motors (GM) , and bypass a "Strangle" amount (put and call options) expiring at the end of the year. Trade is profitable.
General Motors is the automaker of yesterday, you say? The tariffs will crush those guys you say? May be. We have passed the top of automobiles? D & # 39; agreement. General Motors is trading at a support set this morning for the third time in 2018. Either the door is launched or we see the rebound. In any case, investors will sleep at night. The CEO will not bother them.
Economy (All Times Eastern)
08:30 – President of the Fed: Richmond Fed Pres. Tom Barkin.
08h30 – PCE (August): Pending 2.3% yoy, 2.3% yoy.
08:30 – Core PCE (August): Waiting at 2.0% y / y, 2.0% a / a.
08:30 – Personal income (August): Waiting 0.4% m / m, 0.3% last m / m.
08:30 – Consumer spending (August): Waiting 0.3% m / m, last 0.4% m / m.
9:45 am – Chicago PMI (Sept): Waiting at 62.3, last 63.6.
10:00 am – Consumption feeling of the U of M (Sept-F): Flashing 100.8.
1:00 PM – Baker Hughes Oil Rig Count (Weekly): Last 866.
13:00 – President of the Fed: New York Fed Pres. John Williams.
Highlights of the day (Consensus EPS Expectations)
Before opening: (BB) (0.02) (MTN) (-2.26)
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