02/23/2024 ES Trade Plan Worksheet

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Feb 232024
 

Nvidia’s (NVDA) earnings sent the S&P 500 skyward to record highs and up 2.2%.  The Nasdaq 100 rose over 3% to fall just short of its record high.  Nvidia also made record highs after reporting a 265% rise in revenues.  Their stock vaulted 16% which added $277 billion to the company’s market cap, topping Meta’s record for the largest single day increase of any company ever.  The FOMO trade for AI is back on as AI companies across the board had a strong up day Thursday.

AT&T suffered a nationwide cell outage Thursday morning which left millions of customers feeling like they were in an apocalypse, unable to get anything done.  The problems spanned New York, Houston, Atlanta, Miami, Chicago, and Dallas.

Social media platform Reddit made their IPO filing public Thursday in anticipation of a March US stock market debut.  Reddit showed their losses narrowed to $90.8 million on 21% revenue growth, lagging the success of contemporaries like Facebook and X (Twitter).

The company said they have 73.1 million active daily and 267.5 million weekly active users in over 100K communities and 1 billion posts.  The company struck a deal with Alphabet’s Google to make content available for training Google’s AI models, a contract worth about $60 million per year.

Corporate earnings before the open include AER, CCEP, H, LAMR, RBA, and WBD.  After the bell earnings include AEE, AMH, CTRA, and PBA.

The US economic calendar and Fed speaker schedule are bare.

Volatility took a leap higher from Thursday’s huge runup and should remain elevated but could take a breather today.

No Whale bias as large trader volume overnight was mixed.

 

 Posted by at 4:01 am

02/22/2024 ES Trade Plan Worksheet

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Feb 222024
 

Nvidia (NVDA) once again blew out top and bottom-line earnings despite a significant drop in China.  The earnings spur a global stock rally.  The company posted an adjusted EPS of $5.16 on revenue of $22.1 billion for the quarter, clobbering expectations of a $4.60 EPS on $20.4 billion in revenue.  Same time last year, Nvidia posted an EPS of $0.88 on $6.1 billion.

The quarter is nearly the entire year of 2022 when Nvidia posted $27 billion in revenue.  The company also guided higher for their Q1, anticipating revenue of $24 billion.

CEO Jensen Huang said demand for accelerated computing and generative AI is “surging worldwide across companies, industries, and nations… Vertical industries – led by auto, financial services and healthcare – are now at a multibillion-dollar level.”

The Fed meeting minutes showed that most officials cautioned against cutting rates too quickly.  They want to wait on convincing evidence that inflation is returning to their 2% target as most “noted the risks of moving too quickly.”  Since the meeting, both CPI and PPI came in above forecasts, a sign that short-term inflation has increased.

Big banks need mergers and acquisitions (M&A) to make a comeback this year and its starting to happen.  According to DeaLogic, US M&A is up 130% to $288 billion this quarter while global M&A is up 56% to $453 billion.

The 3 largest deals are Capital One (COF) acquiring Discover Financial Services (DFS) for $35 billion, Truist Financial (TFC) selling its $15.5 billion insurance operation, and WalMart (WMT) acquiring TV maker Vizio for $2.3 billion.  M&A activity means hundreds of millions in fees for big banks.  Morgan Stanley (MS), Goldman Sachs (GS), JPMorgan Chase (JPM), Bank of America (BAC), and Citigroup ( C ) all are involved in one of the 3 largest M&As.

After 5 quarters of decline, the world’s largest PC maker (25.6% of the global PC market) Lenovo posted stronger than expected earnings.  The PC market is showing signs of recovery after a nearly 2-year decline.  Lenovo saw growth in almost every market except China where sales dropped 10%, reflecting a slowdown of the world’s second largest economy.

Corporate earnings before the open include BLDR, LNG, D, ETR, GFI, GRAB, IRM, KDP, LKQ, LYG, MRNA, NEM, NICE, PCG, PXD, POOL, PWR, TECK, TFX, and TEF.  Earnings after the bell include AEE, AMH, BMRN, SQ, BKNG, CPRT, CTRA, EIX, EOG, FND, PODD, INTU, LYV, MELI, MORN, NU, PBA, RKT, VALE, and VICI.

The economic calendar includes Claims @ 8:30am ET, Flash PMIs @ 9:45am ET, Existing Home Sales @ 10:00am ET, and Oil @ 11:00am ET.  Fed Governor Philip Jefferson speaks @ 10:00am ET at a conference in DC.

Volatility took a dip on Wednesday but remains elevated.

Whale bias is leaning bullish into the 8:30am Unemployment Claims number.

 

 Posted by at 4:50 am

11/23/2023 Thanksgiving Holiday

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Nov 232023
 

US stock markets are closed today, Thursday, November 23 for Thanksgiving.  US stock markets will be open tomorrow for a shortened, morning session with likely little volume.  Most US based traders take this as an opportunity for a 4-day weekend.  Happy Thanksgiving!

 

 

 Posted by at 7:58 am

09/26/2022 ES Trade Plan Worksheet

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Sep 262022
 

As global central banks raise and lower (as the case with Turkey) interest rates, global currencies are taking a wild ride.  While American tourist are enjoying the strong dollar, retirement accounts, institutional portfolios, corporate earnings, and crypto holds are feeling pain caused by the currency movements.

Strong tech companies are feeling pain.  Nvidia is down 57% YTD, AMD is down 52% YTD, and Amazon is down 32% YTD, all primarily due to interest rates and the currency markets.

It’s rare times when a premier company like FedEx misses earnings by $2 and announces cost cuts of $3 billion.  Nike (NKE) posts earnings on Thursday and given they are a global company like FedEx, currencies will likely negatively impact the current and foreseeable future earnings.

The pound has hit a historic low of 1.0327 after release of last week’s new Conservative government ‘mini-budget’ and the euro has hit a 20-yuear low of 0.9689 against the dollar.

Oil prices continue to weaken as $100/barrel seems far in the rear-view mirror as prices return to Jan 2022 prices.  WTI for November hit $78.49/barrel while Brent contracts are trading around $85.50.

There are no corporate earnings of note for Monday.

The economic calendar is light with Chicago Fed @ 8:30am ET and Dallas Fed @ 10:30am ET.  Boston Fed President Susan Collins speaks @ 10:00am ET.

Volatility remains high.

No Whale bias as large traders leaned bearish overnight but not with enough volume to be significant.

 

 Posted by at 7:26 am

09/23/2022 ES Trade Plan Worksheet

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Sep 232022
 

Fed Chair Jerome Powell could shake up the markets once again this afternoon.  He is set to give the opening remarks for a Fed Listens event in Washington D.C. @ 2:00pm ET.  Given the fireworks his press conference generated on Wednesday, there is potential for more this afternoon.

The Securities and Exchange Commission (SEC) has decided that zero-commission brokerages are not ripping their customers off and will allow brokerages to continue being paid for order flow (PFOF) from market makers like Citadel Securities or Virtu Americas.  Rather than an all-out PFOF ban, the SEC thinks more price transparency and requiring brokers to execute at the best possible price at the time will reduce the problem of small investors paying too much and allow commission-free brokerages like Robinhood to exist.  One study showed that the differences in prices between fee brokerages and commission-free brokerages cost investors up to $34 billion per year.

Stocks are down overnight with some global markets hitting 2-year lows as global central banks crank up the rate hikes.  German PMIs showed a deep contraction in manufacturing.

In the US, the Atlanta Fed’s GDPNow tool is forecasting third quarter growth of 0.3% and the bond market continues to give recession warnings with the 2-year rising to 4.19%.  Meanwhile, Goldman Sachs cut their full year target for the S&P 500 to 3600.

Speaking of big banks, they got Congressional pressure on Thursday to raise savings interest rates.  While Fed rates have increased significantly, big bank savings interest rates have not moved from 0.01%.  The banks are posting 10s of billions in quarterly profits, around 25% of gross revenue, catching the ire of lawmakers.  Many regional banks now paying 2% or more on savings accounts.

Costco (COST) is down over 3% premarket after beating earnings but warning of narrowing profit margins.

Corporate earnings include Carnival (CCL).

The economic calendar focus is the Flash PMIs @ 9:45am ET.

Volatility remains high.

Whale bias is short into the US session open on decent large trader volume.

 

 Posted by at 7:27 am

06/20/2022 Juneteenth Federal Holiday

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Jun 202022
 

Ok, I’ll admit that I totally forgot about this new Federal holiday and went to work as usual this morning… On June 17, 2021, Congress passed legislation making June 19th a Federal holiday called Juneteenth National Independence Day. The date marks the day that Union General Gordon Granger’s June 19, 1865 proclaimed that Texas was freed from slavery. Texas, along with other Southern states had outlawed Abraham Lincoln’s Emancipation Proclamation. This year, the first Federally recognized Juneteenth falls on Monday, June 20. US stock markets are closed today.

 Posted by at 6:52 am