Market Update:
Interestingly, the major indices are “up” for the week as investors continue to digest a slew of economic, earnings and Central Bank data. Earlier today, the European Central Bank held its latest meeting and press conference. Initially, Draghi, was dovish, then he turned hawkish, then he turned dovish again. Currency markets (Euro and the USD) traded all over the map and the bottom line is that Global Central Banks are trying to talk a strong game right now (by strong, I mean less easy money) but in reality the central bank put remains alive and well. Meaning, it’s easy to say you want to “normalize” rates again when the S&P 500 is trading 2.3% below its record high. What do you think they will “say” when the market falls 5%, 10%, or more? We saw it earlier this year: the Fed raised rates in Dec 2015 and forecast 4 rate hikes in 2016… Then stocks plunged in January- Feb 11th and they immediately did a 180 and, so far, they haven’t raised rates all year.
Most likely, they will raise once in Q4 and be done. If Hillary has a very large margin they might do it at their next meeting on Nov 1st (just to say they are not “political”) but if it’s not a sure win- they will wait and probably raise in December. Right now, markets are futzing around (no, that’s not a technical term) as investors wait for clarity and a bullish catalyst. We are starting to get clarity with respect to the election, and the market wants to see what happens with Earnings (So far its a mixed bag – see below), and then the always fun economy. The split tape we have told you about remains front and center as the Nasdaq 100 is above its 50 DMA line while the S&P 500 and Dow are below their respective 50 DMA lines. If the Nasdaq and Semiconductor stocks break, and close, below their 50 DMA lines that will bode poorly for the major indices. The good news is that we have done a great job navigating this difficult tape and are more than ready to pounce once a clean trend emerges again. It is just a matter of when, not if. As is always the case on Wall Street, our patience will be rewarded.
FLS Portfolio:
The FLS portfolio is happy with its exposure in this very “split” and sloppy tape.
Here’s a snapshot of the FLS portfolio as of this writing (Tuesday @3:10pm EST),
A. The service owns: SMH +16.11%, BAX -0.23%,
AAPL +0.77%
B. The service will exit: SMH @ 62.96, BAX @ 46.57, AAPL @ 111.44
Working Orders:
There are no working orders today
Earnings Season: Good & Bad… So Far
As our long-standing clients know, we like to separate the winners and losers from earnings season. Here is my list (so far) taken shortly after Thursday’s open:
Bold stocks are today’s movers
UP:
NFLX
HAS
DPZ
UNH
GS
TACO
TTS
BABY
HAL
SNA
GGG
LSTR
AXP
URI
ICLR
MAT
DHR
BK
CTXS
FTI
ALK
IMAX
DOWN:
AA
ILMN (gapped down 25% after lowering earnings estimates). Reports Nov 1st
VAC
FRC
JBHT
IBM
BMI
JNJ
ISRG
AZO
MANH
GPC
CREE
TUP
INTC
RAI
UNF
UFPI
IIIN
RS
DXPE
DST
KALU
FLXS
TRV
SCSS
EBAY
UNP
BJRI
SYNT
VZ
