NG Weekly: Probe Lower Early Week To 1.75s Where Large Buying Then Emerged


In this article, we examine the significant weekly order flow and market structure developments driving NG price action.

As noted in last week’s NG Weekly, the highest probability path for this week was for price discovery lower barring failure of 1.90s as resistance. This probability path did play out as a sell-side breakdown through key support, 1.80s, developed early week to 1.75s. Buying interest emerged near the low before driving price higher to 1.87s where buyers trapped in Thursday’s auction, developing balance ahead of Friday’s close, settling at 1.83s.

09-14 February 2020:

This week’s auction saw a gap lower open in Sunday’s Globex trade as last Friday’s late sellers held the auction. Key support, 1.80s, was breached as price discovery lower developed in Monday’s trade, achieving a stopping point, 1.75s, into Monday’s NY close. Large buying interest emerged, 1.79s-1.75s, during the sell-side sequence. Narrow balance developed, 1.78s-1.76s, early into Tuesday’s auction before a minor probe lower developed, achieving the weekly stopping point low, 1.75s. Minor buy excess developed there, halting the sell-side sequence before price discovery higher developed, as buying interest emerged, 1.76s-1.79s, into Tuesday’s NY close.

Tuesday’s buyers held the auction as price discovery higher continued in Wednesday’s trade, achieving a stopping point, 1.85s, as the sell-side breakdown below 1.80s failed. Balance developed, 1.85s-1.82s, into Thursday’s trade before a failed buy-side breakout developed through the EIA release (-115 bcf vs. -110 bcf expected), achieving the weekly stopping point high, 1.87s. Structural sell excess developed there as buyers trapped, driving price back below Wednesday’s resistance to 1.82s into Thursday’s NY close where buying interest emerged, 1.83s-1.82s. Thursday’s late buyers failed to hold the auction as the pullback continued early in Friday’s trade, achieving a stopping point, 1.79s. Sellers trapped there, driving price higher to 1.85s as balance trade developed, 1.85s-1.83s, ahead of Friday’s close, settling at 1.83s.

NG Weekly 14Feb20

This week’s primary expectation of price discovery lower did develop as a sell-side breakdown through key support, 1.80s, developed to 1.75s into the four-year demand cluster. Buying interest emerged there, driving price higher to 1.87s as the sell-side breakdown failed. Balance then developed, 1.87s-1.79s, into the week’s end.

Focus into next week rests upon the market response to key supply, 1.85s-1.90s. Sell-side failure to drive price lower from this area will target key supply clusters above, 1.91s-1.98s/2.10s-2.17s, respectively. Alternatively, buy-side failure to drive price higher from this area will target the key demand cluster/major support below, 1.80s-1.75s/1.60s, respectively. The highest probability path, near-term, shifts buy-side, barring failure of 1.75s as support. The failure of 2.15s as support remains structurally significant. The four-year demand cluster, 2.20s-1.50s, which we have noted for months and which the market revisited, remains key to the larger structural view. In the intermediate term (3-6 month) context, conditions in the leveraged capital posture reflect signs of potential structural low formation as the market trades to this major demand area. While the sell-side bias remains, trade is becoming constricted following the approximately 38% decline from the November 2019 high, warranting caution on the sell-side.

It is worth noting that despite the approximately 59% decline from the November 2018 high to the August 2019 low, only from June through early September 2019 had the Managed Money (MM) short posture begun to reach levels consistent with structural low formation (typically 300-350k contracts). MM short posture peaked the week of 13 August (-367k contracts) declining into mid-November (-201k contracts). This development implied that MM sentiment reached extreme bearishness as price reached lows resulting in the rally from 2.02s to 2.90s. In the last 2 instances of this development (March 2016 and December 2017), NG subsequently rose from 1.70s to 3.25s and 2.65s to 4.5s, respectively. This week’s data shows MM net short posture increase (-330k contracts), a fourteen-year low as open interest (OI) decreased modestly.

NG COT 14Feb20

The MM short posture stands at -494k contracts, a minor decline from the fourteen-year high. The MM long:short ratio and MM net long position as % of open interest remain at levels typically consistent with structural low formation. MM posture reached quantity needed to develop structural lows from July-September 2019 and current levels are more extreme. This development is likely now underway, and this week’s support may have larger structural implications. MM posture is now reflecting extreme pessimism with leveraged capital materially increasing short exposure at/near major lows. This type of development warrants caution on the sell-side as this type of herding behavior generally creates potential for abrupt price movement in the opposite direction.

NG MM Short 14Feb20

The market structure, order flow, and leveraged capital posture provide the empirical evidence needed to observe where asymmetric opportunity resides.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.





Original source link

Dividend Challenger Highlights: Week Of February 9


Introduction

The Dividend Champions list is a monthly compilation of companies which have consistently increased their annual dividend payouts, and the latest edition may be found here. However, since this list is only produced once per month, the data in it can quickly get out of date. Furthermore, with close to 900 companies on the list, the sheer amount of data can quickly become overwhelming. In this weekly series, I highlight recent and upcoming dividend related activity for companies holding Challenger (5-9 years) status.

In the data presented below, Yield is forward annualized and Years reflects the up-to-date streak, including dividends declared since the last edition of the Dividend Champions list.

Dividend Increases

In the past week, the following companies declared dividends which were higher than their previous payouts.

Company

Symbol

Ex-Div

Pay

Old Rate

New Rate

Increase

Yield

Years

Brookfield Asset Management Inc.

(BAM)

2/27

3/31

0.16

0.18

12.50%

1.06%

9

Cisco Systems Inc.

(CSCO)

4/2

4/22

0.35

0.36

2.86%

3.07%

10

Consolidated-Tomoka Land Co.

(CTO)

2/21

2/28

0.13

0.25

92.31%

1.60%

8

Equinix Inc.

(EQIX)

2/25

3/18

2.46

2.66

8.13%

1.64%

6

First Industrial Realty Trust Inc.

(FR)

3/30

4/20

0.23

0.25

8.70%

2.17%

8

Intercontinental Exchange Inc.

(ICE)

9/15

9/30

0.275

0.3

9.09%

1.24%

8

Interpublic Group of Companies Inc.

(IPG)

2/28

3/16

0.235

0.255

8.51%

4.17%

8

LeMaitre Vascular Inc.

(LMAT)

3/2

3/19

0.085

0.095

11.76%

1.26%

10

Manulife Financial Corporation

(MFC)

2/24

3/19

0.25

0.28

12.00%

4.26%

7

Penske Automotive Group Inc.

(PAG)

2/21

3/3

0.41

0.42

2.44%

3.24%

10

Restaurant Brands International Inc.

(QSR)

3/13

4/3

0.5

0.52

4.00%

3.09%

6

Regency Centers Corp.

(REG)

2/21

3/5

0.585

0.595

1.71%

3.72%

7

Rexford Industrial Realty Inc.

(REXR)

3/30

4/15

0.185

0.215

16.22%

1.63%

7

Terex Corp.

(TEX)

3/5

3/19

0.11

0.12

9.09%

1.87%

8

Vulcan Materials

(VMC)

2/25

3/10

0.31

0.34

9.68%

0.93%

7

Western Union Company

(WU)

3/16

3/31

0.2

0.225

12.50%

3.43%

6

Last Chance to Buy

These companies have ex-dividend dates approaching. The following tables indicate the last day you can buy these stocks in order to be eligible for the upcoming dividend. Tables are sorted alphabetically by symbol.

Monday February 17

Markets closed in observance of President’s Day

Tuesday February 18 (Ex-Div 2/19)

Company

Symbol

Pay Date

Payout

Price

Yield

Years

Delta Air Lines Inc.

(DAL)

3/12

0.4025

58.9

2.70%

7

Discover Financial Services

(DFS)

3/5

0.44

76.42

2.30%

9

Exelon Corporation

(EXC)

3/10

0.3825

49.76

3.10%

5

Griffon Corp.

(GFF)

3/19

0.075

20.55

1.40%

9

Main Street Capital Corp.

(MAIN)

3/13

0.205

44.9

5.50%

9

Shore Bancshares, Inc.

(SHBI)

3/4

0.12

16.15

3.00%

5

Wednesday February 19 (Ex-Div 2/20)

Company

Symbol

Pay Date

Payout

Price

Yield

Years

Carnival Corporation & Plc

(CCL)

3/13

0.5

42.6

4.60%

5

Energizer Holdings, Inc.

(ENR)

3/18

0.3

51.47

2.30%

5

MSCI Inc.

(MSCI)

3/6

0.68

322.56

0.90%

6

ONE Gas Inc.

(OGS)

3/6

0.54

96.21

2.30%

7

TE Connectivity Ltd.

(TEL)

3/6

0.46

93.3

1.90%

7

Timken Company

(TKR)

3/4

0.28

54.09

2.00%

6

Thursday February 20 (Ex-Div 2/21)

Company

Symbol

Pay Date

Payout

Price

Yield

Years

Consolidated-Tomoka Land Co.

(CTO)

2/28

0.25

62.33

1.60%

8

HNI Corp.

(HNI)

3/2

0.305

37.95

3.20%

9

Hennessy Advisors Inc.

(HNNA)

3/6

0.1375

10.56

5.20%

6

MKS Instruments Inc.

(MKSI)

3/6

0.2

118.01

0.70%

9

Penske Automotive Group Inc.

(PAG)

3/3

0.42

51.81

3.20%

10

Regency Centers Corp.

(REG)

3/5

0.595

64.02

3.80%

7

Friday February 21 (Ex-Div 2/24)

Company

Symbol

Pay Date

Payout

Price

Yield

Years

Brunswick Corp.

(BC)

3/13

0.24

64.93

1.50%

7

CDW Corp.

(CDW)

3/10

0.38

138.29

1.10%

7

Manulife Financial Corporation

(MFC)

3/19

0.28

19.71

5.70%

7

PBF Logistics LP

(PBFX)

3/17

0.52

20.95

9.90%

6

Money on the Way

The following companies have dividend pay dates in the upcoming week (Tuesday through the following Monday). Check if you want your DRIPs to reinvest at these yields…or take the cash and go have a steak dinner!

Company

Symbol

Pay Date

Payout

Yield

Apogee Enterprises Inc.

(APOG)

2/18

0.1875

2.2%

Atlantic Union Bankshares Corp.

(AUB)

2/21

0.25

2.9%

Black Stone Minerals, L.P.

(BSM)

2/24

0.3

12.0%

Bankwell Financial Group Inc.

(BWFG)

2/24

0.14

1.9%

Columbia Banking System Inc.

(COLB)

2/19

0.22

2.8%

D.R. Horton Inc

(DHI)

2/24

0.175

1.1%

Dolby Laboratories Inc

(DLB)

2/20

0.22

1.2%

EPR Properties

(EPR)

2/18

0.375

6.4%

First Community Bankshares Inc.

(FCBC)

2/21

0.25

3.2%

First Defiance Financial Corp.

(FDEF)

2/21

0.22

3.1%

FS Bancorp Inc.

(FSBW)

2/19

0.21

1.6%

German American Bancorp

(GABC)

2/20

0.19

2.2%

Greenbrier Companies Inc.

(GBX)

2/18

0.27

3.9%

GEO Group Inc.

(GEO)

2/21

0.48

11.1%

Home Bancorp Inc.

(HBCP)

2/21

0.22

2.4%

Hartford Financial Services Group Inc.

(HIG)

2/18

0.325

2.2%

Hope Bancorp Inc.

(HOPE)

2/21

0.14

3.9%

Heritage Commerce Corp.

(HTBK)

2/19

0.13

4.4%

Hexcel Corporation

(HXL)

2/21

0.17

0.9%

Independent Bank Group Inc.

(IBTX)

2/20

0.25

1.8%

Mid Penn Bancorp

(MPB)

2/24

0.18

2.9%

Mueller Water Products, Inc.

(MWA)

2/20

0.0525

1.7%

NiSource Inc.

(NI)

2/20

0.21

2.8%

OceanFirst Financial Corp

(OCFC)

2/19

0.17

2.9%

Paychex Inc.

(PAYX)

2/20

0.62

2.8%

People’s Utah Bancorp

(PUB)

2/18

0.14

2.0%

Sandy Spring Bancorp Inc.

(SASR)

2/19

0.3

3.4%

SB Financial Group Inc.

(SBFG)

2/21

0.095

1.8%

Sound Financial Bancorp Inc.

(SFBC)

2/24

0.2

1.6%

Service Properties Trust

(SVC)

2/20

0.54

9.6%

USD Partners LP

(USDP)

2/19

0.37

14.7%

Westlake Chemical Partners LP

(WLKP)

2/18

0.4714

8.3%

WSFS Financial Corp.

(WSFS)

2/21

0.12

1.2%

West Bancorp Inc.

(WTBA)

2/19

0.21

3.5%

Wintrust Financial Corp.

(WTFC)

2/20

0.28

1.7%

Zions Bancorp Inc.

(ZION)

2/20

0.34

2.9%

Conclusion

I hope you found this article useful. Please let me know if you have any ideas for improving the format or data included in this series.

Looking for more in depth analysis of high quality dividend stocks? Check out the Dividend Kings marketplace service!

Disclosure: I am/we are long CSCO, GEO. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.





Original source link

Wall Street Breakfast: The Week Ahead


Notable earnings reports: Restaurant Brands (NYSE:QSR) on February 10; Lyft (NASDAQ:LYFT), Hasbro (NASDAQ:HAS), Hilton (NYSE:HLT), Under Armour (UAA), and Western Union (NYSE:WU) on February 11; Cisco (NASDAQ:CSCO), CVS Health (NYSE:CVS), Shopify (NYSE:SHOP), Teva Pharmaceuticals (NYSE:TEVA) and TripAdvisor (NASDAQ:TRIP) on February 12; Alibaba, Nvidia, PepsiCo, Roku (NASDAQ:ROKU), AIG (NYSE:AIG) and Yelp (NYSE:YELP) on February 13; AstraZeneca (NYSE:AZN) on February 14.
Go deeper: See Seeking Alpha’s complete list of earnings reporters.

IPO watch: A quiet week for IPO pricings is set up with only small-caps Huize (HUIZ) on February 11 and Revolution Medicines (RVMD) on February 12 on the calendar. Analyst quiet period expirations during the week include Phoenix Tree (NYSE:DNK), I-Mab (NASDAQ:IMAB), Velocity Financial (NYSE:VEL) and Lizhi (NASDAQ:LIZI) on February 11. IPO lockup periods expire for China Xiangtai Food (NASDAQ:PLIN) on February 10 and 9F (NASDAQ:JFU) on February 11. There is also the second week of trading on Casper Sleep (NYSE:CSPR) to look forward to after a relatively solid debut for the online mattress seller.
Go deeper: Catch up on all the latest IPO news.

Projected dividend changes (quarterly): Sherwin-Williams (NYSE:SHW) to $1.34 from $1.13, Ametek (NYSE:AME) to $0.16 from $0.14, NextEra Energy (NYSE:NEE) to $1.40 from $1.25, T. Rowe Price Group (NASDAQ:TROW) to $0.84 from $0.76, Humana (NYSE:HUM) to $0.60 from $0.55, CSX (NASDAQ:CSX) to $0.26 from $0.24, Hasbro (HAS) to $0.73 from $0.68, Equinix (NASDAQ:EQIX) to $2.64 from $2.46, Wyndham Hotels (NYSE:WH) $0.31 from $0.29, Wendy’s (NASDAQ:WEN) to $0.125 from $0.120, Louisiana-Pacific (NYSE:LPX) to $0.14 from $0.135, Nu Skin (NYSE:NUS) to $0.375 from $0.370.
Go deeper: Read the latest dividend analysis.

Digital dividends: Another big development to watch this week in the world of dividends is the shareholder vote at Overstock.com (NASDAQ:OSTK) on proposals related to the company’s proposed digital dividend. Current Overstock shareholders will receive one digital share for every ten shares of the traditional stock they hold if the measure is approved. An estimated distribution date of March 9 has been set for the digital payout. “This is an important step for the first dividend of its kind to give our shareholders access to the next generation of capital markets powered by tZERO,” says Overstock CEO Jonathan Johnson on the innovation.

M&A tidbits: The tender offer on the CRCM/IAC deal expires on February 10. Shareholders at INST vote on Thoma Bravo buyout on February 13. M&A talk is swirling around Zagg (NASDAQ:ZAGG), Oasis Midstream Partners (NASDAQ:OMP), Taubman Centers(NYSE:TCO)-Simon Property (NYSE:SPG) and SoftBank (OTCPK:SFTBY).

Analyst/investor meetings: Visa (NYSE:V) is scheduled to host its investor day event on February 11. CEO Al Kelly, CFO Vasant Prabhu, President Ryan McInerney and other members of Visa’s management team will provide an overview of global strategy, key business and product initiatives, as well as financial objectives. Other companies with events scheduled include Otis Elevator (NYSE:UTX) and Daimler (OTCPK:DDAIF) on February 12 and Emerson Electric (NYSE:EMR) on February 13.

13F season: The expected period to see a flurry of 13F filings from hedge funds, private equity firms and investment managers arrives next week. Pershing Square (OTCPK:PSHZF), Berkshire Hathaway (NYSE:BRK.A), Elliott Management, Trian Fund, Blackstone (NYSE:BX), Blue Harbour, Appaloosa and Jana Partners are just some of the companies expected to disclose their holdings.
Go deeper: Read fund letters for detailed explanations of holdings and strategy.

Samsung event: The Samsung Galaxy Unpacked 2020 event will feature new updates to the Samsung Galaxy S20 Series. The S20 line follows the Galaxy S10 from last year is tipped to include a Galaxy S20, a Galaxy S20+ and a Galaxy S20 Ultra. Samsung is also heavily rumored to be ready to announce a new foldable handset called the Galaxy Z Flip and a new set of wireless earbuds. If there is a surprise Samsung reveal it might in the form of new smart speakers.

LNG Conference: The S&P Global Platts 19th Annual LNG Conference in Houston on February 12 is described as the must-attend global LNG event of the year. This year the event coincides with major disruption in the LNG market after China National Offshore Oil Corp (NYSE:CEO) suspended some purchases due to weak demand and a global oversupply. It sets up as a potentially volatile week for LNG players like Cheniere Energy (NYSEMKT:LNG), Tellurian (NASDAQ:TELL), NextDecade (NASDAQ:NEXT), Royal Dutch Shell (NYSE:RDS.A), Golar LNG (NASDAQ:GLNG), GasLog (NYSE:GLOG), Total (NYSE:TOT) and PetroChina (NYSE:PTR).

FDA watch: The agency’s Tobacco Products Scientific Advisory Committee will conduct a public hearing on February 14, regarding 22nd Century Group’s (NYSEMKT:XXII) Modified Risk Tobacco Product application for its VLNC cigarettes under the proposed brand name of VLN cigarettes.

Drug data: The WORLDSymposium lysosomal disease event in Orlando, Florida next week will include data updates from REGENXBIO (NASDAQ:RGNX), Protalix BioTherapeutics (NYSEMKT:PLX), AVROBIO (NASDAQ:AVRO) and Amicus Therapeutics (NASDAQ:FOLD). Later in the week, Johnson & Johnson (NYSE:JNJ), Trovagene (NASDAQ:TROV), Exelixis (NASDAQ:EXEL), Roche (OTCQX:RHHBY), Advaxis (NASDAQ:ADXS) and Corvus Pharmaceuticals (NASDAQ:CRVS) will all present trial data at the ASCO GU Cancers Symposium.

Business updates: ADP (NASDAQ:ADP) is holding an Innovation Day on February 10. Members of the ADP senior management team and technology organization will provide updates on the company’s investments in innovation and its vision for its HCM technology portfolio. Vale (NYSE:VALE) will post its Q4 production report on February 11. The company will report iron ore, pellets, coal, nickel, copper, cobalt and gold production numbers for the quarter. On a more macro level, FedEx (NYSE:FDX) is due to issue its 2020 economic update on February 10, while General Motors (NYSE:GM) CEO Mary Barra is a keynote speaker at the National Association of Dealers Association Show on February 12. Also of note, BP (NYSE:BP) CEO Bernard Looney will give a talk on February 12 to address corporate goals and share the company’s concerns about climate change. Looney says he will lay out BP’s low carbon goals.

Cowen Aerospace/Defense & Industrials Conference: Boeing (NYSE:BA) and Raytheon (NYSE:RTN) are headliners at the conference scheduled for New York City on February 12. Other presenting companies include Mantech (NASDAQ:MANT), Vectrus (NYSE:VEC), RADA (NASDAQ:RADA), Raytheon (RTN), Johnson Controls (NYSE:JCI), Parsons (NYSE:PSN), Arconic (NYSE:ARNC), Leidos (NYSE:LDOS) and Albany International (NYSE:AIN).

Goldman Sachs Technology & Internet Conference: The list of tech companies due to appear at the Goldman Sachs Technology and Internet Conference on February 11-12 includes heavyweights like Microsoft (NASDAQ:MSFT), Cisco (CSCO) and Alphabet (NASDAQ:GOOGL) – as well as Juniper Networks (NYSE:JNPR), Ceridian (NYSE:CDAY), Adtran (NASDAQ:ADTN), Ping Identity (NYSE:PING), Skyworks (NASDAQ:SWKS), Dynatrace (NYSE:DT), Criteo (NASDAQ:CRTO), TE Connectivity (NYSE:TEL), Avnet (NASDAQ:AVT), Texas Instruments (NASDAQ:TXN), Cognizant (NASDAQ:CTSH), Arrow Electronics (NYSE:ARW), IHS Markit (NYSE:INFO), Stitch Fix (NASDAQ:SFIX), Micron (NASDAQ:MU), MongoDB (NASDAQ:MDB), Proofpoint (NASDAQ:PFPT) and ServiceNow (NYSE:NOW), Arista Networks (NYSE:ANET), Corning (NYSE:GLW), Gartner (NYSE:IT), Micron Technology (MU), Applied Material (NASDAQ:AMAT), Adobe (NASDAQ:ADBE), Ceridian (CDAY) and Zendesk (NYSE:ZEN).

Oscars Netflix (NASDAQ:NFLX) is hoping to win some Academy Awards tomorrow night after landing 24 nominations to top all studios, including 10 for Martin Scorsese’s The Irishman. Netflix has underperformed at the Oscars in the past and some think Hollywood’s old guard is hesitant to give up the statuettes to the streamer. Shares of Netflix could see a little bounce if that streak is broken.

Transportation conference: The Stifel Transportation & Logistics Conference runs from February 11-12 in Miami Beach. Notable participants include Schneider National (NYSE:SNDR), Electrameccanica Vehicles (NASDAQ:SOLO), Fortress Transportation (NYSE:FTAI), Seacor Holdings (NYSE:CKH), Union Pacific (NYSE:UNP), J.B. Hunt Transport Services (NASDAQ:JBHT), U.S. Xpress (NYSE:USX), C.H. Robinson (NASDAQ:CHRW), Matson (NYSE:MATX), USA Truck (NASDAQ:USAK), Matson (MATX), Heartland Express (NASDAQ:HTLD), Air Transport Services Group (NASDAQ:ATSG), Werner Enterprises (NASDAQ:WERN), U.S. Xpress Enterprises (USX), C.H. Robinson Worldwide (CHRW), Kirby (NYSE:KEX), Daseke (NASDAQ:DSKE) and YRC Worldwide (NASDAQ:YRCW).

Barron’s mentions: The third annual ranking of America’s Most Sustainable is the cover story this week. Shares of the 100 companies on the list returned 34% on average last year to top the return on the S&P 500 Index of 32%. Agilent Technologies (NYSE:A), Texas Instruments, (TXN) and Voya Financial (NYSE:VOYA) top the ranking of companies by environmental, social and governance policies. Other ESG winners in the top ten are Tiffany (NYSE:TIF), Best Buy (NYSE:BBY), HP Inc. (NYSE:HPQ), W.W. Grainger (NYSE:GWW), Cisco (CSCO), Avnet (AVT) and Autodesk (NASDAQ:ADSK). Beat-up Kraft Heinz (NASDAQ:KHC) is seen as having up to 40% upside if new management can right the ship. The food company is expected to sell off at least a couple of key assets to boost its balance sheet. The publication also thinks the energy sector finally looks tempting after slumping another 10% this year vs. a 3% rise in the S&P. The usual suspects BP (BP), Chevron (NYSE:CVX), ConocoPhillips (NYSE:COP), Exxon Mobil (NYSE:XOM) and Royal Dutch Shell (NYSE:RDS.B) are seen as attractive at current levels.

Sources: CNBC, Reuters, Bloomberg, The Verge, EDGAR, The Hill





Original source link

3 Things Under the Radar This Week By Investing.com


© Reuters.

By Yasin Ebrahim and Kim Khan

Investing.com – Wild market swings came this week as a Black Swan swooped down on 2020 in the form of the coronavirus.

That lent an extra edge of volatility to what was the busiest week of earnings for the season, which also had a Fed decision a Bank of England decision, U.S. GDP and the U.K. officially leaving the EU. It’s not surprising some things may have gone unnoticed.

While stocks were still diving on Friday, investment banks were betting on a white knight to fix the economic ramifications of the coronavirus.

Telsa had another stellar week, but is there one area out its control that could stifle the stock?

And investors shouldn’t ignore the big game this weekend.

Here are three things that flew under the radar this week.

1. In the Fed We Trust

A deadly disease emanating from Wuhan, China rocked global markets to the core this week. The turned negative for the month. The , or fear index, spiked to three-month highs. And safe havens like and bonds rode the wave of fear to sharp weekly gains.

In the wake of the rising coronavirus risk, some on Wall Street have warned that a 5% to 10% correction beckons for stock markets. But they appear reluctant to wave the white flag on the decade-long bull run in equities, claiming the Federal Reserve will save the day.

If China’s economy comes under heavy siege from the virus “its 18% weight in the global economy would have an overwhelmingly negative effect on the rest of the global economy,” and likely call the Fed into action, Societe Generale (PA:) said in a note.

Morgan Stanley (NYSE:) agreed, saying the Fed won’t allow an accelerated slump in stocks as “liquidity remains flush.”

But Societe Generale is still not keen to wade into beaten-down stocks.

“In our view, it is too early to call a generalized ‘buy the dips,’ given the newsflow on the virus is currently anything but reassuring,” it said.

J.P. Morgan is a little more daring.

“The latest health scare is likely to worsen before getting better,” but “past outbreaks have tended to drive only limited market falls,” J.P. Morgan said.

These previous health scares did not lead to a prolonged period of selling, and were a “buying opportunity within weeks,” it added.

2. Can Anything Stall Tesla?

It was quite a week for Tesla (NASDAQ:), which seems it can do no wrong at the moment.

It knocked its out of the park, sending the high-flying stock still higher. On Friday, during the massive selloff on coronavirus fears, it ended 1.5% higher, even though its Shanghai factory could be impacted. CEO Elon Musk even dropped an EDM song entitled “Don’t Doubt ur Vibe.”

Is there any fly in Tesla’s ointment? Perhaps one is the attitude of governments towards electric vehicle subsidies.

Around the globe, the message looks mixed.

  • In the U.S., Tesla hit the cap of 200,000 vehicles that was set for a $7,500 consumer tax break in 2019 and Congress declined to extend the cap to 600,000 vehicles.
  • In China, Beijing plans to end its new energy vehicle (NEV) subsidies after 2020, but said it would not cut subsidies again this summer, which the auto industry saw as a win.
  • In Norway, where electric cars make up more than 40% of sales, VAT exemptions have been extended to the end of 2021.
  • In Germany, Tesla’s lower-priced Model 3s are subsidized with a grant of 4,000 euros that the government plans to increase by half over the five years from 2020.
  • In Canada, the Model 3 can get a rebate of up to C$5,000 under the zeo-emission incentive program.
    • In the U.K. all Tesla models are eligible for a rebate od up to 3,500 pounds.

    3. What’s the Super Bowl to the S&P?

    It’s Super Bowl LIV weekend and while U.S. investors may know the connection to equities, the Super Bowl Indicator may have flown under the radar for global traders, especially considering all the other big headlines.

    The Super Bowl Indicator says that if a team from the NFC wins the big game there will be bull market that year and if the AFC team wins, there will be a bear market. (It’s quite straightforward if you don’t get too hung up on expansion teams arising after the 1970 NFL/AFL merger and teams switching conferences.)

    That means a win by the San Francisco 49ers will be good for stocks and a Kansas City Chiefs win won’t.

    Noticed in 1978 by a New York Times sports writer and popularized by market newsletter, this coincidental correlation still gets attention as it’s been mostly right.

    Through 53 Super Bowls, in 79% of years when the NFC has won, stocks have ended the year up.

    But it’s been wrong the last four games.

    For the real gamblers who can’t even wait for the big game, videogame maker Electronic Arts (NASDAQ:) ran its game simulation on “Madden NFL 20,” with the Chiefs taking the Vince Lombardi trophy home, beating the Niners 35-31.

    And for those who don’t like sports, there’s the classic January Indicator that says as goes the first month, so goes the year. Friday’s big selloff pushed the just into the red for the month.





    Original source link