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2015-07-31 08:38:39

Posted by
Elaine Chen
Sales Trader
International Business Division
Guosen Securities
Contributor
Macro

GUOSEN Closing Bell (July.31)

MARKET

Chinese stocks closed lower today, with the benchmark Shanghai Composite Index ended at 3663.73 points. The A share market continued to retreat with shrunk trading volume, the market fluctuated below 3700 points and spiked around 2PM which became a pattern despite regulator’s effort to reduce market volatility by strengthen supervision on program trading. Beverage and home appliance sectors led the gains; while military and agricultural sectors led the falls. Combined turnover for both markets was 878.0 bn yuan, down 24.1% dod.

 

CLOSE

%CHG

VOL (bn yuan)

%YTD

SH Composite

3663.73

-1.13

460.4

+13.26

SZ Component

12374.25

-0.17

417.6

+12.34

CSI300

3816.70

+0.03

299.3

+8.01

ChiNext

2539.84

-0.83

108.5

+72.57

 

Sector

Top 1

Led by

Top 2

Led by

Upward-leading

Beverage

000752

Home appliance

300475

Downward-leading

Military

600893

Agricultural

000048

 

NEWS

*China Quanjude (Group) (002186.SZ) recently announced that as of now, the Beijing SASAC has not conducted a review for the stock ownership incentive plan of Beijing state-owned holding companies. The company still has no timetable for the stock ownership incentive plan. (AAstocks)

*CITIC Securities, in a report, stated that Tesla Motors's Model S sales in China are expected to exceed 1,900 units in the first half of 2015, recording a significant increase on a yearly basis. The sales from January to May amounted to 1,729 units. Tesla Motors's Leopold Visser, in an interview with DZH News Agency, said that the management is satisfied with the sales of Model S in China. (AAstocks)

*China COSCO Holdings (601919.SH) announced on 30 July that benefited from the subsidy for ship scrapping, the company expects its interim results to swing into a profit from a loss. The net profit is expected to be about RMB1.9 billion. DZH News learned that China COSCO Holdings received a ship scrapping subsidy of RMB3.963 billion at the end of June. (AAstocks)

FUND FLOW

This article is from Guosen Securities Co., Ltd. and is being posted with Guosen Securities Co., Ltd.’s permission. The views expressed in this article are solely those of the author and/or Guosen Securities Co., Ltd. and IB is not endorsing or recommending any investment or trading discussed in the article. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

 

2015-07-31 00:08:32

Posted by
Darren Chu, CFA
Founder
Tradable Patterns
Contributor
Technical Analysis

Natural Gas (NG) Rejected Again at Weekly Chart Triangle Resistance

Natural Gas (NG) sold off yesterday ahead of and following the weekly storage figures.  Yesterday's pullback occurred from just below descending triangle resistance (on the weekly chart), and flattens weekly and daily RSI and Stochastics.  With weekly MACD still sloping up, my longer term bias remains bullish, and I will look to establish an intraday long today once the 4hr Stochastics and MACD flatten out and begin turning up.

 

NG (CME NG Aug15) Weekly/Daily/4hr/Hourly

Tradable Patterns was launched to demonstrate that the patterns recurring in liquid futures, spot FX and equity CFD markets can be traded consistently profitably. Tradable Patterns’ daily newsletter (blog) provides technical analysis on a subset of ten to twelve CME/ICE/Eurex futures (commodities, equity indices, interest rates), spot FX and US equity markets, which it considers worth monitoring for the day/week for trend reversal or continuation. For less experienced traders, tutorials and workshops are offered online and throughout Southeast Asia.

This article is from Tradable Patterns and is being posted with Tradable Patterns’ permission. The views expressed in this article are solely those of the author and/or Tradable Patterns and IB is not endorsing or recommending any investment or trading discussed in the article. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

2015-07-31 00:08:30

Posted by
Darren Chu, CFA
Founder
Tradable Patterns
Contributor
Technical Analysis

WTI Crude (CL) Daily Chart MACD Positively Crossing

WTI Crude (CL) saw more consolidation yesterday, sliding slightly lower.  The break above descending wedge resistance (on the daily chart) hasn't provided much fuel for upside, weighed partially by a still slightly downward sloping MACD green line.  Nevertheless, weekly and daily RSI and Stochastics are bottomish, and daily MACD is making a positive crossover.  I am flat CL and will look to go long intraday in the 47.5-48.3 range today.

WTI Crude (CME CL Sep15) Weekly/Daily/4hr/Hourly

Tradable Patterns was launched to demonstrate that the patterns recurring in liquid futures, spot FX and equity CFD markets can be traded consistently profitably. Tradable Patterns’ daily newsletter (blog) provides technical analysis on a subset of ten to twelve CME/ICE/Eurex futures (commodities, equity indices, interest rates), spot FX and US equity markets, which it considers worth monitoring for the day/week for trend reversal or continuation. For less experienced traders, tutorials and workshops are offered online and throughout Southeast Asia.

This article is from Tradable Patterns and is being posted with Tradable Patterns’ permission. The views expressed in this article are solely those of the author and/or Tradable Patterns and IB is not endorsing or recommending any investment or trading discussed in the article. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

2015-07-31 00:08:11

Posted by
Darren Chu, CFA
Founder
Tradable Patterns
Contributor
Technical Analysis

Arabica Coffee (KC) Reclaims Weekly Chart Downchannel Support

Arabica Coffee (KC) surged yesterday as it broke above downchannel resistance (on the 4hr chart) and closed at 1.25 (just above the July low).  KC is now targeting daily chart downchannel resistance, and has successfully reclaimed descending wedge support (on the weekly chart).  I am flat KC and will look to reestablish intraday longs today in the 1.225-1.24 range.

 

Arabica Coffee (ICE KC Sep15) Weekly/Daily/4hr/Hourly

Tradable Patterns was launched to demonstrate that the patterns recurring in liquid futures, spot FX and equity CFD markets can be traded consistently profitably. Tradable Patterns’ daily newsletter (blog) provides technical analysis on a subset of ten to twelve CME/ICE/Eurex futures (commodities, equity indices, interest rates), spot FX and US equity markets, which it considers worth monitoring for the day/week for trend reversal or continuation. For less experienced traders, tutorials and workshops are offered online and throughout Southeast Asia.

This article is from Tradable Patterns and is being posted with Tradable Patterns’ permission. The views expressed in this article are solely those of the author and/or Tradable Patterns and IB is not endorsing or recommending any investment or trading discussed in the article. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

2015-07-30 15:08:02

Posted by
Russ Koesterich, CFA
BlackRock
Contributor
Macro

Is it Time to Buy Commodities?

Russ Koesterich explains what's behind the recent commodity rout and whether it represents an opportunity for investors.

 

A quick glance at recent headlines would lead a reasonable person to assume that this year’s big losers are Greek and Chinese stocks. Yet, despite all the furor in the news, the Athens Stock Exchange is down less than 5% year-to-date, while the Shanghai Composite remains up more than 10%, according to Bloomberg data.

The real damage has been in the commodity complex. Through late July, year-to-date crude oil prices were down around 10%, platinum prices were off nearly 20% and coffee prices were down almost 30%, Bloomberg data shows. Based on the Bloomberg Commodity Index of 22 commodities, the overall complex is now trading at a 13-year low. Several factors account for the sell-off.

Slowing global growth

So far, 2015 is shaping up to be another disappointing year. The International Monetary Fund (IMF) recently lowered its full year estimate for global growth to a bit below last year. In the United States, 2015 gross domestic product (GDP) growth estimates have fallen by nearly a full percentage point since February, according to Bloomberg data. Slower growth negatively impacts cyclical commodities, like energy and industrial metals. As economic activity decelerates, so too does demand for these commodities.

Expectations for a Federal Reserve (Fed) hike

While growth is disappointing, it’s arguably still strong enough to justify an initial Fed hike later this fall. Expectations for tighter monetary policy are impacting commodities in a few related ways. Central bank divergence, i.e. the Fed hiking while most other central banks are easing, is likely to push the dollar, already up 8% year-to-date, higher. In addition, certain commodities, notably precious metals, are being negatively impacted by rising real rates.

Excess supply

While this issue is more idiosyncratic, it has been one of the key factors hurting energy prices, particularly crude oil prices. Despite a precipitous decline in the U.S. rig count, greater efficiency has allowed U.S. domestic production to rise by roughly 500k barrels since the end of 2014, according to Bloomberg data. In addition to still-robust U.S. production, investors have had to contend with rising supply from the Middle East as well as with the prospect of even more supply from that region. With the pending Iran deal, other Middle Eastern producers appear to be ramping up production in an effort to defend market share. Thanks to rising production from Saudi Arabia and Iraq, Organization of Petroleum Exporting Countries (OPEC) production is up more than 1.5 million barrels per day since the start of the year, according to Bloomberg data.

None of these factors are likely to change in the near term, meaning that commodity prices are likely to remain under some pressure. This suggests that for investors, the better opportunity may be in the companies that produce the commodities, rather than in the commodities themselves. Many of these stocks already reflect quite a bit of bad news. For instance, based on my calculations using Bloomberg data, the U.S. energy sector, as measured by the S&P 500 Energy Index, is currently trading at roughly 1.60x book value, a 40% discount to the broader market and in line with lows seen in 2009. Meanwhile, metal stocks are selling at an even greater discount, my calculations show, with the S&P Metal and Mining Select Industry Index trading at close to book value and barely 11x earnings. Finally, potential supply cutbacks — most recently, copper producer Freeport-McMoRan Inc. said it’s mulling cutbacks — will eventually help constrain supply and help stabilize prices.

But for now, with commodity prices still falling and global growth slowing, it may be too early too aggressively buy commodity producers. Still, investors looking for bargains in an otherwise stretched market should keep an eye on these stocks.

 
Russ Koesterich, CFA, is the Chief Investment Strategist for BlackRock. He is a regular contributor to The Blog.
 

Index returns are for illustrative purposes only.  Index performance returns do not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results.

This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of the date indicated and may change as subsequent conditions vary. The information and opinions contained in this post are derived from proprietary and nonproprietary sources deemed by BlackRock to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by BlackRock, its officers, employees or agents. This post may contain “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this post is at the sole discretion of the reader. iS-16224-0715
 

This article is from BlackRock and is being posted with BlackRock’s permission. The views expressed in this article are solely those of the author and/or BlackRock and IB is not endorsing or recommending any investment or trading discussed in the article. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

2015-07-30 14:02:40

Posted by
Max Lee
New Constructs, LLC
Contributor
Stocks

The Best and Worst of the Industrials Sector

Sector Analysis 3Q15

The Industrials sector ranks third out of the 10 sectors as detailed in our 3Q15 Sector Ratings for ETFs and Mutual Funds report. It gets our Neutral rating, which is based on aggregation of ratings of 19 ETFs and 17 mutual funds in the Industrials sector as of July 8, 2015. See a recap of our 2Q15 Sector Ratings here.

Figures 1 and 2 show the five best and worst-rated ETFs and mutual funds in the sector. Not all Industrials sector ETFs and mutual funds are created the same. The number of holdings varies widely (from 20 to 347). This variation creates drastically different investment implications and, therefore, ratings.

Investors seeking exposure to the Industrials sector should buy one of the Attractive-or-better rated ETFs or mutual funds from Figures 1 and 2.

Figure 1: ETFs with the Best & Worst Ratings – Top 5

* Best ETFs exclude ETFs with TNAs less than $100 million for inadequate liquidity.

Sources: New Constructs, LLC and company filings

Figure 2: Mutual Funds with the Best & Worst Ratings – Top 5

* Best mutual funds exclude funds with TNAs less than $100 million for inadequate liquidity.

Sources: New Constructs, LLC and company filings

Fidelity Environment and Alternative Energy Portfolio (FSLEX) and Rydex Transportation Fund (RYPIX, RYPAX) are excluded from Figure 2 because their total net assets (TNA) are below $100 million and do not meet our liquidity minimums.

State Street SPDR Industrial Select Sector Fund ETF (XLI) is the top-rated Industrials ETF and Fidelity Select Transportation Portfolio (FSRFX) is the top-rated Industrials mutual fund. Both earn an Attractive rating.

First Trust RBA American Indl Renais ETF (AIRR) is the worst-rated Industrials ETF and ICON Industrials Fund (ICIAX) is the worst-rated Industrials mutual fund. Both earn a Dangerous rating.

418 stocks of the 3000+ we cover are classified as Industrials stocks.

Deere & Company (DE: $96/share) is one of our favorite stocks held by Industrials ETFs and mutual funds and earns our Attractive Rating. Since 2008 the company has grown after-tax profit (NOPAT) by 8% compounded annually. Deere currently generates a top-quintile return on invested capital (ROIC) of 16%. Falling agriculture prices have brought Deere’s stock price down over the past year, and we think this drop gives long-term investors an excellent buying opportunity. At its current price of $96/share, Deere has a price to economic book value (PEBV) ratio of 0.6. This ratio implies the market expects Deere’s profits to permanently decline by 40%. This expectation seems unduly low and likely reflects a market overreaction to issues and a failure to recognize the leading position Deere holds in the agriculture industry. Deere currently has an economic book value, or no growth value of $153/share – a 59% upside.

FedEx Corporation (FDX: $170/share) is one of our least favorite stocks held by Industrials ETFs and mutual funds and earns our Very Dangerous rating. Since 2007 the company has only been able to grow NOPAT by 1% compounded annually. Over the same time frame, ROIC has fallen from 9% to 6% and NOPBT margins have fallen from 11% to 9%. When generating over $40 billion in revenue, a 200 basis point decline in margin greatly affects FedEx’s profitability. Despite these fundamental issues, the risk in the stock’s high valuation should give investors pause. To justify its current price of ~$170/share, FedEx must grow NOPAT by 10% for the next 24 years. Expecting the company to increase its NOPAT growth rate tenfold and maintain that rate for 24 years after years of lackluster NOPAT growth seems risky.

Figures 3 and 4 show the rating landscape of all Industrials ETFs and mutual funds.

Figure 3: Separating the Best ETFs From the Worst ETFs

Sources: New Constructs, LLC and company filings

Figure 4: Separating the Best Mutual Funds From the Worst Mutual Funds

Sources: New Constructs, LLC and company filings

Disclosure: David Trainer and Max Lee receive no compensation to write about any specific stock, sector or theme.

 

About New Constructs

QUESTION: Why shouldn’t ETF research be as good as stock research? Why should ETF investors rely on backward-looking price trends?
ANSWER: They should not.

Don’t judge an ETF by its cover. Take a look inside at its holdings and understand the quality of earnings and valuation of the stocks it holds. We enable you to choose the best ETF based on its stock-picking merits so you do not have to rely solely on backward-looking technical metrics. 

The figure below details the drivers of our forward-looking Rating system for ETFs. The drivers of our predictive rating system are Portfolio Management and Total Annual Costs. The Portfolio Management Rating (details here) is the same as our Stock Rating (details here). The Total Annual Costs Rating (details here) captures the all-in cost of being in an ETF fund over a 3-year holding period, the average period for all fund investors.

Cutting-edge technology enables us to scale our forensics accounting expertise so that we can cover enough stocks to cover the ETFs that hold them as well. Learn more about New Constructs. Get a free trial. See what Barron’s has to say about our research. Cutting-edge technology enables us to scale our forensics accounting expertise so that we can cover enough stocks to cover the ETFs that hold them as well. Learn more about New Constructs. Get a free trial. See what Barron’s has to say about our research.
 


Disclosure: David Trainer and Max Lee receive no compeThis article is from New Constructs, LLC and is being posted with New Constructs, LLC’s permission. The views expressed in this article are solely those of the author and/or New Constructs, LLC and IB is not endorsing or recommending any investment or trading discussed in the article. This material is for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IB to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.sation to write about any specific stock, sector or theme.

2015-07-30 12:38:33

Posted by
Andrew Wilkinson
Chief Market Analyst
Interactive Brokers
Contributor
Options

US Steel rally draws bullish option plays

Shares in US Steel are bucking the broader market Thursday, adding 1.05% to stand at $20.26 and off an earlier-in-the-week low of $15.68. The move follows a midweek rally on heavy share volume after a two-month malaise for the stock. It appears that an option trader closed out a bullish call option position at the Sep 18.0 strike and placed a fresh upside play using the Sep 22.0 and 25.0 strikes. The 18.0 calls expiring in September were sold at a 3.00 premium on volume of 14,000 contracts and likely the closing side of already established positions. Call options at the same expiration were bought and sold across the two higher strike prices for a net premium of 75-cents using 15,000 lots. That would imply a breakeven share price of $22.75 for the strategy, meaning the stock would need to rally by a further 12.3% from where it last traded. The 3.00 spread caps the maximum gain from the trade to 2.25 points or $3.375 million in the event the share price rallies to $25.00 or above.  

Chart – Rebound for stock prompts bullish call spread in US Steel

 

The analysis in this article is provided for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IB to buy, sell or hold such investments. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

2015-07-30 11:44:22

Posted by
Christine Short
Senior Vice President
Contributor
Stocks

Q2 Earnings Season Halftime Report

And just like that, we’re already at the midpoint of the second quarter earnings season. Technically, we’re past that, with 264 S&P 500 companies reporting. As usual, we are in much better standing in regards to growth than we were at the beginning of the season. Earnings per share growth currently stands at -0.3%, still negative but a big improvement from the -3.7% estimated before Alcoa reported on July 8. Revenues remain suppressed at -3.3%, even lower than where they started (-2.4%). Of course, improving growth is due to a majority of companies beating the Estimize EPS consensus (62%), with only 44% beating revenues estimates.

The main themes in company statements have again have revolved around the stronger dollar this quarter. A third of all reporting companies have mentioned currency headwinds as the culprit for disappointing bottom-line results, mainly those within the information technology and industrials sectors. This impact will ease as we head into the third quarter, as the dollar began its ascent in Q3 2014, therefore the year-over-year comparison should be more in-line. About a quarter of reporting companies have hit on the impact of commodities, including lower oil prices. Regionally speaking, China has been a big topic as well, but comments have been mostly mixed, with many of the large multinationals in the S&P 500 still heavily relying on growth from that region. Greece has only been mentioned by a handful of companies at this point.

How did we get here?

Sectors: winners and losers

Not much has changed since the season began, with health care retaining its position at the top. The sector has the highest YoY EPS growth rate of 15.3% as well as the largest revenue growth rate of 7.5%, especially impressive during a time when corporations are struggling to increase the top-line. As far as industries go, pharmaceuticals and biotechnology are neck-in-neck, increasing profits 20.9% and 20.2%, respectively. There are 13 companies within the pharma industry. Of the six that have reported thus far, AbbVie and Eli Lily have posted the largest earnings growth rates of 32% each. The darlings of the biotech space also continue doing their part, with Biogen, Celgene and Gilead Sciences all posting 20%+ earnings growth for the second quarter, with only the latter two putting up similar growth on the sales side.

The last two weeks have been hot with releases from the tech space, first from the behemoths and then this week with social media names. Despite a few disappointing reports, the sector trails health care as the second best performing sector for Q2 with earnings growth of 7.0%, but minimal revenue growth of  2.6%. Despite a flurry of headwinds including the stronger dollar and the freefall of the PC market, semiconductors have actually put up the best industry growth rate thus far of 24.9% on the bottom-line, yet only 2.6% on the top-line. Of the 16 companies in the industry, only 7 have reported, with three of those missing the Estimize consensus, two beating and two meeting. With over half of that industry yet to report, will have to see if that high growth rate can stay in tact. Internet software & services follow, with EPS growth of 18.4% and revenues of 9.9%. Of these names, Google’s impressive YoY profit growth of 15% takes the cake, with high expectations for Facebook.

It’s no surprise that energy is the biggest laggard again this quarter. After reporting a decline in profits of 54% and revs of -36.6% last quarter, expectations are even steeper in Q2 at -61.1% and -39.2%, respectively. This should be as low as it goes, with estimates improving in the latter half of the year. This mostly has to do with the fact that oil prices began to drop in Q3 2014 in response to the stronger dollar, so we are finally about to get YoY comparisons that are apples-to-apples. The biggest names in the space, Exxon Mobil, Chevron and Valero don’t report until next week, but due to their size could have a big impact on overall growth. Ex-energy, S&P 500 earnings growth would be up 7% this quarter vs. the current -0.03%.

Beat/Miss/Match

Thus far, 61% of reporting companies have beat the Estimize EPS consensus, while only 43% have managed to beat on revenues. The best performing sector thus far is again health care, with 84% of companies beating on the bottom-line and 68% of companies surpassing top-line expectations. Consumer discretionary is also up there with 79% blowing past EPS predictions. Utilities seems to be in the roughest shape, while only 9 companies have reported from that sector, only 44% have beat on earnings and 11% on sales.

What to expect in the second half

For the second half of the season investors will want to pay close attention to the big oil names that report, and the guidance that they offer for the latter half of the year. The retail parade will also commence in the next couple of weeks and should give a good read on the state of the U.S. consumer which seemed mixed during the first half of the year despite an improving economy and lower fuel prices.

 

About Estimize

Estimize is an open financial estimates platform which facilitates the aggregation of fundamental estimates from independent, buy-side, and sell-side analysts, along with those of private investors and students. By sourcing estimates from a diverse community of individuals, Estimize provides both a more accurate and more representative view of expectations compared to sell side only data sets which suffer from several severe biases.


This article is from Estimize and is being posted with Estimize’s permission. The views expressed in this article are solely those of the author and/or Estimize and IB is not endorsing or recommending any investment or trading discussed in the article. This material is for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IB to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.



 

 


 

 

2015-07-30 11:00:53

Posted by
Neil Azous
Founder & Managing Member
Rareview Macro LLC
Contributor
Macro

The Fed is Talking Out of Both Sides of Its Mouth...

If you have not realized it already, yesterday would have taught you that the Federal Reserve is the master of the art of talking out of both sides of your mouth – that is, saying different things to different people about the same subject. For example, when it does not want to hike interest rates, it references low inflation, and when it does want to hike interest rates, it references strong employment trends.

Yesterday’s message focused on stronger employment. Why? Because regardless of the global growth backdrop, the desire by the Committee to at the very least get off the zero bound interest rate before the end of 2015 remains very high and overcoming that hurdle will be more easily accomplished through the labor market rather than relying on the trajectory of higher inflation. Put another way, between now and September’s FOMC meeting it is much more likely that the US will show the same level of high employment at the next two releases of the non-farm payroll reports, and the lower commodities prices, especially crude oil, will outweigh any uptick, even if it were to materialize, in wage pressures.

On a separate note, a lot of professionals continue to focus on the euro as a vehicle for US dollar exposure. Whether you are trading spot EUR/USD or the PowerShares DB US Dollar Index Bullish Fund (UUP), this is the wrong way to get US dollar beta exposure at the moment. See the below chart of the JPMorgan USD Tradeable Currency Index (JPMQUSD) relative to the EUR/USD (inverted). As you can see, the EUR/USD is lagging the broader US dollar move. Also, we would note, at time of writing the Dollar-Yen (USD/JPY is trading at 124.40, just a few pips shy of the July high 124.48.

 

Sight Beyond Sight® is a global macro trading newsletter written daily by Neil Azous. With close to two decades of institutional experience across asset classes, Neil interprets the day-to-day economic, policy and strategy developments and provides actionable trading ideas for investors. We invite clients of Interactive Brokers to sign up for a free trial in Account Management. If you are not a client of IB, you can sign up for a free trial by visiting our website.


This article is from Rareview Macro and is being posted with Rareview Macro’s permission. The views expressed in this article are solely those of the author and/or Rareview Macro and IB is not endorsing or recommending any investment or trading discussed in the article. This material is for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IB to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

2015-07-30 10:33:18

Posted by
Waverly Advisors, LLC
Technical/Quantitative Market Research
Contributor
Technical Analysis

Waverly Advisors Summary Stats

%Chg: percent change from the previous day’s close
 
SigmaSpike: the day’s change expressed as a standard deviation of the last 20 trading days. Values inside +/- 1.0σ are generally insignificant, +/- 2.5σ are large (for the volatility of the particularly instrument), and +/-4.0σ are very large.
 
C/DayRng: the current price as the pipe “|” within the day’s range. Can easily see at a glance if trading near high or low of the day. The day’s open is “:”. You can read more about this indicator in my book.
 
For sectors: analysis is done using the State Street Sector SPDRs (XLE, XLF, etc.) %Chg is the day’s change for the SPDR, and Excess is the Excess Return for the day (the SPDR’s return – the S&P 500 return).
 
 
For more information about Waverly Advisors please click here.
 
 
This article is from Waverly Advisors and is being posted with Waverly Advisors’ permission. The views expressed in this article are solely those of the author and/or Waverly Advisors and IB is not endorsing or recommending any investment or trading discussed in the article. This material is for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IB to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
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