HI Market View Commentary 06-24-2019
I just got back from CA at 3:15 AM this morning, Up at 7 to see the market open at 7:30 and promptly fell asleep at 3:30 pm to wake up 15 minutes ago !!!
I did spend all of last week with my parents, my brothers and their families – Wives nephews, nieces
We enjoyed my parents 50th Wedding Anniversary and spent a lot of time talking about work
SO… questions kept coming up on how to make a million dollars overnight and how I could do what I do for work?
I’m doing it for myself anyway so why not do it for others as well
In real life the market is ever changing, no single rule/trade/investment works perfectly and the change is what I like figuring out
I realized that I would risk looking stupid, feeling ashamed, take the risk to “own” my process of learning how to make money in the stock market. I would need to let go of the shame and vulnerability to make sure that I could collar trade for a profits and figure out how to be profitable in 2008.
There is a lot happening this week = G-20, Trump Xi meeting, end of quarter, quadruple witching, Iran sanctions and their reaction, holiday week next week
Where will our markets end this week?
Lower as mutual funds sell profits to end the quarter and before next week’s holiday week
DJIA – Bullish Market
SPX – Bullish
COMP – Bullish
Where Will the SPX end June 2019?
Tues: MU, FDX, LEN
Wed: BB, GIS, FUL, KBH
Thur: CAG, WBA, MKC, NKE
Tues: Case Shiller, FHFA Housing Price Index, Consumer Confidence, New Home Sales,
Wed: MBA, Durable Good, Durable ex-trans
Thur: Initial, Continuing, GDP – 3rd Est, GDP Deflator, Pending Home Sales.
Fri: Personal Income, Personal Spending, PCE price index, Core PCE, Michigan Sentiment
Thursday – G-20
Friday- President Xi and Trump Meeting
How am I looking to trade?
www.myhurleyinvestment.com = Blogsite
Rally could last a lot longer than most people expect,’ Jim Cramer says
PUBLISHED MON, JUN 17 2019 7:59 PM EDTUPDATED MON, JUN 17 2019 7:59 PM EDT
- “This idea that investing can be fun is a throwback … to the ’80s and ’90s, where you had some incredible bull runs and no one thought it was just horrible and stupid to like stocks,” CNBC’s Jim Cramer says.
- “And if that’s the case, well guess what: the rally could last a lot longer than most people expect,” the “Mad Money” host says.
- There are companies working, and investors can “happily buy them into weakness if you’ve done the homework and you believe in their prospects,” he says.
A new generation of investors is getting the impression that owning individual stocks can be “fun and it can be rewarding,” CNBC’s Jim Cramer said Monday.
The prior demographic, particularly the millennial cohort, learned that buying individual stocks is “too risky,” he said, due to the skyrocketing valuations of internet companies before the turn of the century. That’s when people gravitated toward buy-and-hold index funds, he added.
The key is knowing what you own, Cramer said.
“This idea that investing can be fun is a throwback, not to the dotcom bubble in 1999, but to the ’80s and ’90s, where you had some incredible bull runs and no one thought it was just horrible and stupid to like stocks,” the “Mad Money” host said. “And if that’s the case, well guess what: the rally could last a lot longer than most people expect.”
“They’re fun. They’re companies you know or can learn about,” he said, “and you can happily buy them into weakness if you’ve done the homework and you believe in their prospects.”
Millennials are now investing in many companies that they recognize — think Beyond Meat, Revolve, Chewy, and Pinterest— that have recently gone public. They are being drawn to no-commission trading, Cramer said.
Beyond Meat could “meet its match” in Tyson Foods this week when the meat giant jumps into the faux-meat space, “but so much of the stock has been sold short that I don’t even know if it will matter,” Cramer said.
Chewy is a subscription economy play on the humanization of pets, an arena that Cramer called “one of the great trends of our era.”
“Ask the people who got in on that IPO, fabulous IPO. They’re having fun,” he said.
“I know most of these are classic slowdown stocks — when they all move up together,
are going to say a recession must be around the corner,” Cramer said. “However, at the moment I think their strength has much more to do with the fact that they’re well-run companies with huge buybacks, great balance sheets, good dividends and are working.”
A new class of cloud computing stocks are hot, Cramer said. The host has been studying up the so-called cloud kings of Workday, Adobe, Salesforce, Splunk, ServiceNow, and VMWare. He said other smaller names such as Okta, Zscaler, Zendesk, Coupa, and others helping businesses boost productivity also need some attention.
After the Salesforce and Tableau Software merger last week, some investors are betting that Alphabet may need to make a move, Cramer said.
“Write down those stocks I just mentioned. They are all possible targets,” he said.
“We’re told that fun is a classic sign of a top,” he said. “That’s absolutely true in the long run, but I don’t think we’re there yet. Not everything is moving. You still need to be selective with your stock picking. It’s not like this is a euphoric moment — three weeks ago the averages were getting crushed.”
Facebook plans its own currency for 2 billion-plus users
By Rachel Lerman, Associated Press | Updated – Jun 18th, 2019 @ 3:18pm | Posted – Jun 18th, 2019 @ 9:02am
SAN FRANCISCO (AP) — Facebook already rules daily communication for more than 2 billion people around the world. Now it wants its own currency, too.
The social network unveiled an ambitious plan Tuesday to create a new digital currency similar to Bitcoin for global use, one that could drive more e-commerce on its services and boost ads on its platforms.
But the effort, which Facebook is launching with partners including PayPal, Uber, Spotify, Visa and Mastercard, could also complicate matters for the beleaguered social network. Facebook is currently under federal investigation over its privacy practices, and along with other technology giants also faces a new antitrust probe in Congress .
Creating its own globe-spanning currency — one that could conceivably threaten banks, national currencies and the privacy of users — isn’t likely to dampen regulators’ interest in Facebook.
“It’s a bold and strategic move that has clear risks as well as opportunities tied to it,” said Wedbush Securities analyst Dan Ives. “This could raise further yellow flags as more regulators focus on Facebook.”
David Marcus, the head of Facebook’s cryptocurrency operation, said in a tweet Tuesday that Facebook is creating a separate subsidiary, Calibra, to handle the new currency. He said feedback from customers has been “loud and clear” about keeping social media and financial data separate.
“We understand we will have to earn your trust,” he wrote.
The digital currency, called Libra, is scheduled to launch in the next six to 12 months. Facebook is taking the lead on building Libra and its underlying technology; its more than two dozen partners will help fund, build and govern the system. Facebook hopes to raise as much as $1 billion from existing and future partners to support the effort.
Company officials emphasized that Libra is a way of sending money across borders without incurring significant fees, such as those charged by Western Union and other international money-transfer services. Fees typically start at a few dollars but can be much higher when paying with a credit card. Shares in Western Union fell 2% in morning trading.
Libra could also open up online commerce to huge numbers of people around the world who currently don’t have bank accounts or credit cards.
“If you fast forward a number of years, consumers all over the world will have the ability to access the world economy,” Marcus said in an interview with The Associated Press.
Facebook also could use its own currency to drive more people to make purchases from ads on its social media sites, said Gartner analyst Avivah Litan, who based her comments on press reports about Libra that preceded Facebook’s formal announcement. “This is about fostering more sales within an ad to get more business from advertisers to make ads more interesting on Facebook,” she said.
Backing by familiar corporations might also make Libra the first Bitcoin-like currency with mass appeal. Such “cryptocurrencies” have generally failed to catch on despite a devout following among curious investors and innovators. Bitcoin itself remains shrouded in secrecy and fraud concerns, not to mention wild value fluctuations, making it unappealing for the average shopper.
Libra will be different, Facebook says, in part because its value will be pegged to a basket of established currencies, such as the U.S. dollar, the euro, the yen and others. Each purchase of Libra will be backed by a reserve fund of equal value held in real-world currencies to stabilize Libra’s value.
Wedbush analyst Ives said how well it is received will boil down to execution and “how comfortable consumers feel around Facebook and cryptocurrency.”
To be sure, recent history reminds us that many big Facebook announcements never really take off. Two years ago, for instance, Facebook CEO Mark Zuckerberg promised that “augmented reality ,” in which phones and other devices project digital images into real-world surroundings, would be a major focus for the company. Such AR applications remain all but invisible today. Same goes for the online shopping chatbots that Zuckerberg unveiled a year earlier, saying they would revolutionize e-commerce in its Messenger app.
Facebook won’t run Libra directly; instead, the company and its partners are forming a nonprofit called the Libra Association, headquartered in Geneva, that will oversee the new currency and its use. The association will be regulated by Swiss financial authorities, Facebook said.
“No single company should operate this,” Marcus said. “It should be a public good.”
Facebook’s new Calibra subsidiary is developing a digital wallet app to make it easier for people to buy, send and use Libra.
Libra partners will create incentives to get people and merchants to use the coin. That could range from Uber discounts to a Libra bonus paid when users set up a Calibra wallet, although the companies haven’t laid out specifics.
Many privacy questions remain unanswered, though. Cryptocurrencies such as Libra store all transactions on a widely distributed, encrypted “ledger” known as the blockchain. That could make the Libra blockchain a permanent record of all purchases or cash transfers every individual makes, even if they’re stored under pseudonyms rather than real names. Facebook said people can keep their individual transactions from appearing on the blockchain by using Calibra’s wallet app, though in that case, Calibra would have your data instead.
Calibra pledges that it won’t share transaction data from details of Libra user’s financials with Facebook unless compelled to do so in criminal cases. Still, if people are using Facebook products to buy things and send money, it’s possible Facebook will be able to track some data about shopping and money transferring habits.
Calibra won’t require users to have a Facebook account to use Libra. And it will allow people to send Libra back and forth on two of Facebook’s core messaging apps — WhatsApp and Messenger. Instagram messages won’t be included, at least at first.
Earlier this year, Zuckerberg announced a new privacy-focused vision for the company after months of backlash for its treatment of personal customer information. Zuckerberg’s vision — which has mostly not been detailed publicly — will rely heavily on privacy-shielded messaging apps in an attempt to make the services more about private, one-to-one connections.
Many analysts believe Zuckerberg wants to create a U.S. version of the Chinese service WeChat, which combines social networking, messaging and payments in a single app. Libra would take Facebook a step closer to that end.
AP Technology Writer Mae Anderson in New York contributed to this report.
Here’s what the stock market liked from the Fed
PUBLISHED WED, JUN 19 2019 4:35 PM EDTUPDATED WED, JUN 19 2019 6:17 PM EDT
- The Fed signals a rate cut is coming, in its post-meeting statement and interest rate forecast.
- Analysts are not uniform in when they expect the cut, but many are leaning toward a July move, barring an improvement in the economic data.
- The futures market is betting on more than a full quarter-point rate cut for July.
The Fed came very close to promising a rate cut Wednesday, and now markets are focused on a possible July rate cut.
“I think they’re fully planning on cutting in July, absent stronger data,” said Ed Keon, QMA chief investment strategist. “The market liked it now, but it’s important to keep in mind, rate cuts are not a magic wand. There is clear evidence of weakening of economic conditions.”
The Fed sent a dovish message in its statement, but even more so in its interest rate forecast, released following its two-day meeting Wednesday afternoon. After the statement, stocks and bonds flip-flopped before settling into a pattern, where both markets were bid higher on the prospect of a rate cut. Bond yields, which move opposite price, fell with the biggest decline in the 2-year yield, which closely follows Fed expectations.
The Fed’s rate policy committee left the fed funds target rate range unchanged at 2.25% to 2.50%, while it tweaked some of the language in its statement to suggest it sees more risks to the economy. It also removed the phrasing that it would be “patient,” language it added earlier this year to indicate Fed officials were willing to wait and see more information before making a rate move.
Analysts focused on the fact that the Fed’s interest rate projections showed eight of 17 officials are now expecting the Fed will need to cut rates at least once this year. The fed funds futures market Wednesday afternoon moved to price in three quarter-point hikes this year, including 100% odds for a quarter-point hike this summer, according to BMO.
“That was the biggest surprise in terms of the dovishness. The market was already heading in fairly dovish and everyone did anticipate them taking out the word ‘patience,’” said Leslie Falconio, senior strategist with UBS Global Wealth Management Chief Investment Office. “It was really the dot plot that came off on the dovish side.”
She also noted that the Fed’s interest rate forecast, presented in the so-called ‘dot plot,’ also showed the Fed’s rate forecast falling from 2.6% in 2020 to 2.4%, pricing at least one rate cut. Fed officials’ interest rate forecasts are included anonymously in the dot plot, which literally is a chart.
“They’re setting us up for a rate cut, but who knows when,” said Peter Boockvar, chief investment strategist at Bleakley Advisory Group. “If the data weakens, they’ll cut in July. If it stays steady or gets better, they won’t. People should understand if they’re going to cut it’s because the market data got worse. … This is showing the market focus is on the cuts but not on the reason for the cuts.”
While the markets took the Fed as dovish and ready to move, some economists stuck with their forecasts for no cuts.
“The market reacted dovishly to the June FOMC, in part reacting to 8 dots showing cuts in 2019 and 7 of these indicating 50 [basis points] of cuts,” Citigroup economists wrote. “While the statement and dots keep cuts as early as July squarely on the table, the outcome is very close to our expectations and does not change our base case for no cuts in 2019 — which also remains the base case of a slim majority of Fed officials.”
But John Briggs, head of strategy at NatWest Markets, said the Fed should already have cut and that it loses control of the narrative around the rate cut if it waits.
“If seven of them think they need to cut twice in 2019, what are they waiting for?” said Briggs. “They’re going to have to follow the market. … granted the majority didn’t think they needed it, but this is an awful fine line.”
Falconio said it looks like a cut is coming but the market may be expecting too much. “I think we have to wait to see what happens, but I think July might be premature. I think we have to wait to see what happens at the G-20,” she said.
Analysts said the Fed, like the markets, is watching the upcoming G-20 meeting at the end of the month, where President Donald Trump is expected to meet China President Xi Jinping to see if there is a chance to resolve the trade war.
Fed Chair Jerome Powell, speaking to the media after the meeting, said the Fed needs to see more data to determine whether the recent weakness in things such as jobs creation was temporary or a trend. In May, just 75,000 jobs were added.
“We want to see and we want to react to developments and trends that are sustained and genuine,” said Powell. He also said the Fed is concerned by both trade conflicts and the slowing in the global economy.
“We’ll use our tools as appropriate to sustain the expansion,” said Powell.
The S&P 500, which has ended nine of the last 10 Fed days negative, rose 8 points to close at 2,926. The 2-year yield fell to 1.74%, from as high as 1.91% earlier in the day. The 10-year yield was at 2.02%.
Bitcoin’s digital gold, but Facebook’s Libra is the digital dollar—here’s why that matters
PUBLISHED WED, JUN 19 2019 4:26 PM EDTUPDATED THU, JUN 20 2019 9:47 AM EDT
The crypto craze is gaining serious momentum.
On Tuesday, social media giant Facebook unveiled plans for a new cryptocurrency called Libra, backed by a host of companies including Visa and PayPal, that would function as a digital payment on its platform. Other project partners include eBay, Uber and Spotify, indicating that Libra may eventually be accepted as payment on their platforms as well.
“This is really the main difference: what Libra is doing is creating a digital version of the U.S. dollar, yen, euro. It’s like a stablecoin, but you still have all the characteristics of a fiat currency, ” Kelly said Tuesday on “Fast Money.” “Bitcoin is … digital gold. And, in my opinion, it’s probably a lot better than gold, but there is no trusted third party involved, and that’s the huge difference.”
With Libra, Facebook users will be able to exchange their dollars for Libra tokens, thus entrusting Facebook and its fellow backers with building a reliable ledger of all transactions, Kelly said.
“You have to trust Facebook that they’re going to hold onto those dollars, they’re going to keep track of the ledger, and that your token’s going to be worth something. You go out, you buy your goods and services on the Facebook platform, whoever else is using it. Maybe Uber somehow is involved. And then you’re left with the Libra tokens that are left over,” he said.
That trust defines the main difference between cryptocurrencies like bitcoin and Libra, Kelly said. Bitcoin buyers don’t need to entrust a third party with their money or information, whereas Libra users will have to trust the company that has perhaps been most plagued by issues around trust and privacy: Facebook.
“This is about that trusted third party and, to me, that’s the revolution of crypto, is that it is peer-to-peer. You disintermediate financial services,” Kelly said. “So, when you talk about the differences between this and something like bitcoin, bitcoin is trustless. You don’t need to believe that anybody’s going to check that ledger; you can do it yourself.”
So, as Libra seeks to provide what Kelly saw as “the next iteration” of platforms like PayPal’s Venmo, it may just open the door for consumers to look into the cryptocurrency market in a more serious way, he said.
“This is a huge step forward. Facebook’s going to have a nice-looking wallet that everybody can get on. It’s easy to use. You can start moving this stuff around,” he said. “This validates the technology and gets people involved. To me, it’s like the AOL moment: AOL got you online, Libra’s going to get you into crypto.”
Facebook shares fell by less than 1% by the end of Wednesday’s trading session amid some political pushback, but are still up more than 3% this week. Bitcoin prices rose by nearly 2% by the end of the day’s trading session and are up 140% for the year to date.
All 18 banks pass first part of Fed’s stress tests
The U.S.’s 18 largest and most complex banks passed the Federal Reserve’s Dodd-Frank Act Stress Tests (DFAST).
The Fed said the banks have strong capital levels that would allow them to stay well above their minimum requirements after being tested against a severe hypothetical recession.
The most severe hypothetical scenario projects $410B in total losses for the participating bank holding companies.
This scenario featured a global recession with the U.S. unemployment rate rising by more than 6 percentage points to 10%, accompanied by a large decline in real estate prices and elevated stress in corporate loan markets.
“The results confirm that our financial system remains resilient,” Vice Chairman Randal K. Quarles said. “The nation’s largest banks are significantly stronger than before the crisis and would be well-positioned to support the economy even after a severe shock.”
The banks subject to the stress tests are: Bank of America (NYSE:BAC), Bank of New York Mellon (NYSE:BK), Barclays US (NYSE:BCS), Capital One Financial (NYSE:COF), Citigroup (NYSE:C), Credit Suisse (NYSE:CS), DB USA (NYSE:DB), Goldman Sachs (NYSE:GS), HSBC (NYSE:HSBC) North America, JPMorgan Chase (NYSE:JPM), Morgan Stanley (NYSE:MS), Northern Trust(NASDAQ:NTRS), PNC Financial (NYSE:PNC), State Street (NYSE:STT), TD Group (NYSE:TD), UBS (NYSE:UBS) Americas, U.S. Bancorp (NYSE:USB), and Wells Fargo (NYSE:WFC).
The second part of the Comprehensive Capital Analysis and Review, which evaluates planned capital distributions such as dividend payments and share repurchases, will be released on Thursday, June 27 at 4:30 PM ET.
American Outdoor +8.8% as revenues beat high estimates
American Outdoor Brands (NASDAQ:AOBC) is up 8.8% postmarket after it topped profit expectations again and posted Q4 revenues that beat high estimates.
Net sales grew 2.2% overall, and gross margin rose to 36.1% from a year-ago 33.4%.
On an adjusted basis, net income rose to $14.2M from $13.3M. EBITDAS fell slightly to $31.9M.
The Firearms segment that makes up three-quarters of sales grew 6.3% Y/Y. Outdoor Products & Accessories grew 3.3%.
In Firearms, “while consumer demand remained weak throughout fiscal 2019, as indicated by Adjusted NICS background checks which were down 8.8% year over year, our units shipped into the sporting goods channel increased 4.2%.” The company introduced 106 new firarm SKUs.
Cash was about $41M against $115.4M in net borrowings (the company notes net borrowings have dropped nearly $100M in less than two years).
For Q1, it’s guiding to net sales of $120M-$130M and EPS of $0.03-$0.07. For the coming fiscal year, it’s forecasting net sales of $630M-$650M and EPS of $0.76-$0.84.
Conference call to come at 5 p.m. ET.
Previously: American Outdoor Brands EPS beats by $0.10, beats on revenue(Jun. 19 2019)