News – UK – Countdown to Stimulate Voting Begins with Stocks Falling on Inflation Fears, Boeing News

0
1

The new week starts exactly where the old one left off: Cloudy, with the possibility of further rate problems

Before we talk about pricing, let’s talk about Boeing
BA
(BA), who suffered another blow this weekend when it was revealed that some of its 777 jets will be on the ground after that engine explosion a few days ago BA is a Dow Jones Industrial Average ($ DJI) component, so it wouldn’t be surprising if the $ DJI is still under pressure, perhaps more than the other major indices

The 10-year yield rose again on Monday and recently traded above 1.37% in early January it was around 09%. This rapid spike could weigh on growth stocks for reasons we’ll discuss below, and it appears to weigh on the overall market as well , with the most important indices decreasing quite sharply before the Open

The S&P 500 Index (SPX) is not far from all-time highs but took a small discount last week as yields rose and inflation fears flickered.These inflation concerns aren’t necessarily that relevant in the short term, but this could change very quickly

We saw some pretty decent price swings last week. While you don’t want to get too carried away – it’s not like the 10-year price surged above 2% – the speed of the return allly was pretty amazing and could be convince some people to take a breather on stocks

Historically, a 137% 10-year return is still in the basement, so it was above 5% as recently as 2007 and above 3% by the end of 2018, but the rapid surge this year could ultimately affect the ability of soaring growth stocks to continue to generate good earnings results when borrowing costs start to rise This explains why the so-called “mega-caps” like the FAANGs – along with Microsoft
MSFT
(MSFT) and Tesla
TSLA
(TSLA) – have seen their stocks march in place or even go down over the past week or two

One thing that is fueling the rise in earnings is this week’s main event in Washington where the House of Representatives is expected to debate and then potentially vote on a $ 9 trillion fiscal stimulus, and we have rallied in anticipation of another round of tax relief and recovered and gathered, but the closer we get, the more people wonder what percentage of gross domestic product (GDP) we are ready to go into debt for that is starting to weigh, as is talk of inflation

January retail sales rose 5% apparently on the stimulus from last December, and this next fiscal package is likely to be much larger, which plays along with soaring fuel prices, partly due to last week’s storms , into the fear of inflation

The same goes for the Fed’s continued cautious stance, despite a media company last week addressing the possibility of a “tantrum” if the Fed indicates a slowdown in its strong bond buying stocks could be vulnerable as the indices hit one trading at historically high levels above its 200-day moving average. The SPX is entering a four-day losing streak this week

And as for the Fed, the other lever they control – the Fed’s policy rate – has been at the 0: 025% target range since the beginning of the pandemic, with little sign of going anywhere soon, but the futures market is showing first signs of life As of this morning, the CME Group
CME
The FedWatch tool estimates there is an 8% chance of a rate hike by June. While this is not a significant probability, it is what we often see when interest rate sentiment begins to change A few weeks ago futures markets had a zero probability Percentage for interest rate changes in 2021 priced in

The earnings season is basically over, but for the shouting, as the saying goes, we still have some key company results to work through this week The list may be shorter, but some key reports could shed light on some key sectors / p>

For example Nvidia
NVDA (NVDA) is expected after last Wednesday and could provide a glimpse into the closely watched semiconductor industry NVDA looks to be off to a solid start into 2021, with plenty of strength in the gaming and data center businesses – two segments that account for 88% of total sales and with possibly a major acquisition in the works, a number of product launches, and a surprising surge in NVDA data center growth, analysts are generally bullish

Then we have Home Depot (HD) and Lowes (LOW) on Tuesday respectively Wednesday If 2020 was the year everyone settled into bigger homes in order to have more space to settle in with their families, then 2021 could be the year when the same home buyers cling to the four surrounding walls look around and think about what she dislikes and how to change it. In this case, HD and LOW are perfectly positioned thanks to all of their activities

Other high profile reports expected this week include Macy’s
M.
(M), foot locker
FL
(FL), Moderna (MRNA), Toll Brothers
TOL
(TOL) and Stericycle
SRCL
(SRCL) We’re going to talk more about some of these and what you should see over the week

A lot of data is again this week Today the Conference Board has given investors the latest report on leading indicators Tomorrow consumer confidence data will be released and new home sales will be available for Wednesday

In addition to the weekly unemployment claims count, Thursday includes reports on durable goods, home sales and gross domestic product, and Friday’s calendar includes more inflation data, including the core personal consumption expenditure index, which is the Fed’s preferred measure of inflation

Bitcoin continues to rise, reaching new highs above 52Ultimately, interest rates are still historically low and a lot of money is pouring around looking for a home

TABLE OF THE DAY: OLD ECONOMIC ISSUES NEW The so-called “FAANG” ($ NYFANG: IFUS – Candlestick) [] was ahead of the burgeoning energy sector (IXE – purple line) for most of this year until last week. That was the time where the icy Texas weather combined with fears of inflation stumbled FAANGs while Energy continued to amass profits. Data Sources: NYSE, S&P Dow Jones Indices Chart Source: The thinkorswim® platform

Participation trophies not distributed: After more than 80% of the earnings season, 79% of the S&P 500 companies reported an actual EPS that is above estimates and above the five-year average of 74%, according to research firm FactSet, so far, companies have posted earnings growth of 32%, compared to an estimated -9 year-over-year earnings decline of 3% back on Dec. 31

However (and there is always a “but”, isn’t there?)) companies that deliver positive earnings surprises won’t be rewarded by investors this earnings season. Instead, companies that are positively surprised have a -0 price drop According to FactSet, an average of two days before earnings are posted to two days after earnings are posted. 1% If this trend continues through the rest of the earnings season, this is the first time in a year and only the fourth time in the last five years where this happened

What’s going on here? No Shortage of Positive Guidance So far, 63% (53 out of 84) of companies that issued EPS guidelines for the first quarter have delivered positive outlook, according to FactSet it’s hard to keep an eye on Perhaps many investors feel that profits are finally catching up a bit with prices and they don’t want to award any more medals until the first quarter profits come in and people see more evidence

A day in the sun: The earnings season is ending quickly, but that doesn’t mean we won’t see any company news. This is because as earnings decline, the “Investor Day” season kicks in. For companies with Investor Days in the next few weeks is owned by ExxonMobil
XOM
(XOM), Chevro
CVX
n (CVX), matt
MAT
l (MAT), Hasbr
HAS
o (HAS) and Twitter (TWTR) While a typical earnings day in the previous quarter contains a lot of color, investor days can often move stocks when companies discuss the future, for example PayPal earlier this month
PYPL
(PYPL) stocks rose after analysts attending Investor Day apparently liked what they heard about future trends from PYPL executives.Some analysts raised their price targets after the meeting

Investor Days also attract media attention, which can be good or bad depending on the nature of the news creation, so when thinking about possible market moves that may affect companies you own don’t forget to check the calendar and see if any of them have events planned. Also, listen if you have the time (investor days are usually all-day events) and maybe you can collect some interesting nuggets

You can move around the cabin now: a week ago, despite government warnings not to travel to airports, people flocked across the country in hopes of using a long weekend to go to a warm place in Florida, for example Some indications suggest that tourism is picking up pace with long queues in restaurants, heavy traffic on various beaches, and overcrowded airports on the President’s Day weekend in February in years 12-15, passenger air traffic reached its highest level since Christmas and New Years Over a million people passed through Transportation Safety Administration (TSA) checkpoints 11 and 12 in February and just under a million on Feb. 15 These total values ​​were just six months ago, and trips fell quickly after the holidays. In the middle of last week, TSA traffic only reached about a third of the previous year’s level, but then jumped back over a million on a few days last weekend, although it was less than half of 2020

Analysts say tourist travel is likely the first type of travel to make a comeback when people are more comfortable traveling Business travel is now more of a wild card that means airlines like Southwest
CSWC
(LUV), which is more likely to appeal to sun-seekers and skiers in the winter, may outperform airlines like Delta (DAL), which are trying to attract business travelers, but both LUV and DAL stocks are up about 9% over the past month

I am the Chief Market Strategist at TD Ameritrade and started my career as a Market Maker at the Chicago Board Options Exchange I mainly traded in the S&P 100 and S&P 500

pits

I am the Chief Market Strategist at TD Ameritrade and started my career as a Market Maker at the Chicago Board Options Exchange I mainly traded in the S&P 100 and S&P 500 pits I also worked for ING Bank, Blue Capital and was Managing Director of Options Trading for Van Der Moolen, USA In 2006 I joined the thinkorswim Group which was eventually taken over by TD Ameritrade I am a 30 year old trade veteran and regular CNBC guest as well as a member of the board of directors of the NYSE ARCA and a member of the arbitration committee of the CBOE My licenses include the 3, 4, 7, 24 and 66

Inflation, Stocks, S&P 500, Yield, Nasdaq, Boeing

News – UK – Countdown to Stimulus Vote Begins with Stocks Falling on Inflation Fears, Boeing News

Source: https://www.forbes.com/sites/jjkinahan/2021/02/22/countdown-to-stimulus-vote-begins-with-stocks-down-on-inflation-fears-boeing-news/