Category Archives: Market Preview

Market Preview: Markets Tumble Yet Again on Chinese Data

Economic data out of China, indicating the country’s economy may be slowing, hit global markets hard on Friday. Industrial output grew by only 5.4% in the quarter, a growth rate last seen in the Chinese economy in 2016. The Chinese statistics bureau reporting the data said, the impact of tariffs in the trade war with the U.S have not yet been felt and are not reflected in the numbers. This may be the case, or it may be a negotiating tool for ongoing trade talks. Either way, markets again traded down on the headline data putting the S&P 500 back into correction territory, down over 10% from its highs. The S&P finished off 1.91%, the DJIA was down 2.02%, and the Nasdaq fell 2.26%. Offering no solace, Goldman Sachs economists stated they belief there is a good chance no trade deal is reached before the 90-day freeze on U.S. tariffs is removed in March. For its part, China has agreed to reduce tariffs on automobiles from the U.S. from the current 40% to 15%. Adding to the market damage, a report out of Reuters that Johnson & Johnson (JNJ) knew for over 40 years that its baby powder contained asbestos sent the stock reeling. Johnson & Johnson strongly denied the claims, but that did little to help investors who had flocked to the stock in recent months as a safe haven.

Tech behemoth Oracle (ORCL) and Red Hat (RHT) are scheduled to report earnings Monday. Analysts are expecting Oracle to report $.78 per share or 11.4% year-over-year earnings growth. The stock has traded flat for most of 2018, and investors don’t expect a big move from the company post-earnings given the recent market pressure on tech stocks. Red Hat is expected to show an earnings increase of 10% on revenue of $823 million.

Monday’s economic data will include the New York manufacturing survey and the housing market index. The prior reading on the housing index was 60. A continued deterioration in housing may spike the number lower, another potential negative for a shaky market. Tuesday analysts will examine Redbook retail data as we enter the final week before the Christmas holiday. Tuesday also marks the beginning of an FOMC meeting, at which most traders believe the Fed will raise rates by one-quarter percentage point. MBA mortgage applications and existing home sales data will be released Wednesday morning. The year-over-year change in home sales released in October showed a decline of 5.1%, putting the damage rising rates have had on housing on full display. Wednesday afternoon will bring the release of the Fed statement on interest rates and, the likely rate increase. The Fed announcement will be followed by a press conference by Chairman Powell at 2:30. Jobless claims, the Philadelphia Fed business outlook, leading indicators, and the EIA nat gas numbers will all be released on Thursday. Friday is a quadruple witching, which usually brings added volatility to the market. Economic data published on Friday includes durable goods numbers, GDP, corporate profits, personal income and outlays, consumer sentiment, and the Kansas City Fed manufacturing index.

Tuesday, investors will examine earnings from FedEx (FED) and Micron Technology (MU). The FedEx numbers are especially interesting to investors as they will serve as a pulse check on holiday spending. Paychex (PAYX) and General Mills will report quarterly earnings on Wednesday. Nike (NKE) and Walgreens Boots Alliance (WBA) are marked on the earnings calendar as reporting Thursday. Morgan Stanley recently came out with a note calling the sports company undervalued here and suggested buying Nike ahead of earnings. CarMax (KMX) is scheduled to close out the third week of December with earnings on Friday.

 

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Market Preview: Markets Cling to Gains as Rally is Sold

Markets continued a trend of sell the rallies today, even though the three major indexes finished in the black. News that the U.S. and China were making progress on tariffs, and that President Trump was willing to consider intervention in the detention of the Chinese CFO of Huawei, sent markets soaring after the open. The rally on headline trade news was once again sold as traders turned negative in the afternoon, leaving the DJIA up .64%, the S&P 500 clinging to a gain of .54%, and the Nasdaq up .95%. The tech heavy Nasdaq had been up as much as 2.35% earlier in the day. Investors are running out of time for any meaningful rally in December, and face the prospect of another Fed rate hike next week. Continued unsettling trade news, rate hike fears, a crumbling housing market, and general international unrest, both with BREXIT and riots in Paris, have kept the market on an uneven kilter as 2018 is drawing to an end. Investors can likely expect more up and down trading until some of these major issues are resolved.

Tech earnings will be front-and-center Thursday when Adobe (ADBE) and Ciena Corp. (CIEN) report. Adobe will look to placate investors who have begun to rely on the Saas company to produce ever increasing earnings. Last quarter the company hit another earnings record, increasing earnings 24%, beating both company and analyst projections. Expectations for Ciena are a little more down to earth, with an expected 4.8% year-over-year earnings increase projected. The stock has performed well in 2018, and will look to assure investors who have driven the stock to a 50% gain thus far. Also reporting Thursday is warehouse retailer Costco (COST). Reporting 10% comparable store sales for November late last week, investors are expecting another great number from the membership store as we head into year end.  

Thursday analysts will review weekly jobless claims, import and export prices and the EIA nat gas report. The recent uptick in jobless claims is expected to level off, with claims projected at 228K, down slightly from last week’s 231K. Thursday afternoon the Treasury budget and the Fed balance sheet numbers will be released. While it usually attracts little attention, the Treasury budget may garner mention this week with the possible partial shutdown of the U.S. Government looming in a few weeks. The Fed balance sheet has been in focus lately as the Fed is using a reduction in the balance sheet to tighten monetary policy. The balance sheet has shrunk from a high of $4.5 trillion to just over $4 trillion currently. The Fed shrinks the balance sheet by decreasing the amount of reinvestment it performs from maturing securities. Another $11 billion is expected to be removed from the balance sheet this week.

Retail sales and industrial production numbers will be released Friday. Industrial production, which rose only .1% in October, is expected to rebound slightly rising .3%. Also released Friday will be the PMI composite flash reading along with the Baker-Hughes rig count numbers and business inventories.

Indian multinational ICICI Bank (IBN) is projected to report earnings on Friday. With a $62 billion market cap, the bank has traded relatively flat in 2018. Earnings are expected to come in at $.05 per share. Analysts are also expecting numbers from Telecom Italia (TI) to close out the week. The NYSE traded ADR of the Italian communications company has fallen on hard times this year. The stock is down 26% so far in 2018.

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Market Preview: Progress on U.S./China Trade War Lifts Markets

Markets rallied strongly Monday after President Trump and Chinese President Xi Jinping agreed to a 90 day moratorium on trade tariffs in which the U.S. will hold off on raising tariffs by 25% at the beginning of 2019. Larry Kudlow, the President’s National Economic Council Director, said “If China opens its markets as they promised to do, and they’re going to do it fast according to their promises, we will increase our exports substantially…” Kudlow is well known on Wall Street, and many analysts put faith in his comments over often exaggerated political commentary regarding trade. Markets rallied from the outset Monday morning, gave back some of those gains, and then rallied again near the close. Investors are hoping Director Kudlow is correct and for a quick resolution to the trade issues. If a resolution is not arrived at either before, or soon after, the new year markets will see the 90 day window as simply kicking the can down the road.

Dollar General (DG), Autozone (AZO) and Marvell Technology (MRVL) all report earnings on Tuesday. As Todd Vasos, CEO of Dollar General stated last quarter, “our two-year same-store sales stack for the second quarter of 2018 was the highest in 10 quarters.” The company has been hitting on all cylinders this year, and raised earnings estimates as a result. The stock has been little impacted by the market pullback, and analysts expect another strong quarter from the discount retailer. Autozone earnings are expected to increase 23% year-over-year when the company reports before the bell Tuesday. After selling off earlier this year the stock has regained the $800 level, recently hitting all-time highs. Analysts are looking for another strong quarter, and an update on the company’s aggressive buyback program.

Tuesday, investors will get to take a peak at motor vehicle sales and Redbook retail numbers. The auto sales number is expected to decrease slightly to 17.2 million from the 17.5 reported in October. But both month’s numbers increased dramatically from a summer slump. Wednesday was to see Fed Chairman Powell deliver testimony to Congress’s Joint Economic Committee. But, the passing of President George H.W. Bush, and the declaration of a national day of mourning, means that testimony will be postponed. Stock markets in the U.S. have also announced that they will be closed on Wednesday to honor the nation’s 41st President.  

Wednesday the earnings focus on retailers continues as lululemon (LULU), Five Below (FIVE) and American Eagle Outfitters (AEO) report earnings. Last quarter lululemon handily beat estimates by 44% sending the stock higher yet again after an earnings beat. The stock has performed exceptionally well this year, rising from $80 to around $140. Investors will be looking for the athletic apparel company to provide color on the final few months of the year as we’re in the midst of the holiday season. American Eagle has stair-stepped lower since August of this year. The company has invested heavily in its online operations, and has achieved relatively strong sales numbers from that channel the past few quarters. Analysts will be looking for an update on the progress of the online initiative and what hurdles the company is encountering as it broadens its platform.

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Market Preview: Markets Take Another Beating on Trade Fears

Markets finished the first week of December on more of a Grinch footing than in a hoped for Santa Claus rally. Suffering another beating across the board, all the major indices finished in the red with the DJIA down 2.24%, the S&P 500 off 2.33%, and the Nasdaq faltering 3.05%. The arrest of Huawei CFO Meng Wanzhou, who is also the daughter of the Chinese company’s founder, threw a wrench into U.S./China trade negotiations. Ms. Meng, CFO of one of China’s largest companies, has been charged with fraud in misleading U.S. banks regarding transactions executed by them on Huawei’s behalf. The transactions were in direct violation of U.S. sanctions on Iran. The surprise arrest, as Ms. Meng changed planes in Canada, throws into turmoil yet again talks on trade tariffs between the two superpowers. It did not help markets when early Friday separate high level White House representatives, both involved in the trade talks, gave opposite views on what the 90 day freeze on tariffs means to the overall negotiations. It appears investors are in for a rocky ride into 2019 as the trade issue seems to become murkier by the day.  

Monday will bring earnings from Casey’s General Stores (CASY) and Stitch Fix (SFIX). Casey’s has missed earnings estimates 6 of the last 8 quarters, and the market is in an unforgiving mood for companies that miss estimates lately. Positive results last quarter, as reported by CEO Terry Handley, were driven by higher fuel margins, operating 105 more stores and cutting employee hours worked. As the company grows analysts will be looking for a stabilization of operating margins which have been in a steady decline since 2016. Stitch Fix will be looking to redeem itself after an early October earnings report that basically cut the stock in half over the next few trading sessions. While sales and active customer growth metrics both increased by over 20% last quarter, expectations were for much higher numbers. Though the company grew profit margins in the quarter, investors were more concerned with the active customer growth rate. Analysts will again be focusing more on customer growth than earnings when the company reports Monday.

The Labor Department will release the JOLTS numbers, which track job openings and offer rates on Monday. With somewhat weaker than expected job numbers on Friday, the JOLTS number will take on added emphasis. Scheduled for a 12:30pm release Monday is the TD Ameritrade Investor Movement Index. The index measures investor sentiment by looking at what activity retail investors are engaging in within their brokerage accounts. The report will be especially telling this time around given the extreme volatility in the market the past few weeks. Tuesday we’ll see small business optimism data, PPI, and Redbook retail data. Mortgage application data, CPI, and Atlanta Fed business inflation expectations will all be released on Wednesday. Inflation expectations, which came in at 2.2% year-over-year last month, may be falling as growth is expected to slow. Thursday investors will see the release of jobless claims, import and export prices, and the EIA natural gas report. We’ll close out the week Friday with industrial production numbers, retail sales, PMI composite flash numbers, and business inventories. Manufacturing is expected to pick up an additional .3% month-over-month.

American Eagle Outfitters (AEO), Dave and Buster’s (PLAY) and DSW, Inc. (DSW) will give us a feel for the retail market when they report earnings on Tuesday. DSW broke through support levels Friday reaching prices it has not seen since June. Wednesday Nordson Corp. (NDSN), Tailored Brands (TLRD) and Oxford Industries (OXM) will take the earnings stage. Thursday, heavy-hitters Adobe (ADBE), Costco (COST) and Cienna (CIEN) will take the center ring. Adobe has rewarded investors handsomely this year, up around 40% even after the recent pullback in the stock. Lee Enterprises (LEE) is scheduled to close out the earnings week on Friday.

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Market Preview: Markets Slammed on Trade and Slowing Growth Fears

Markets were closed Wednesday to honor President George H.W. Bush, but that didn’t stop investors from dropping stocks like hot potatoes on Tuesday. Markets came under massive selling pressure after it became clear that the reported trade deal with China isn’t quite as done as investors believed on Monday. Markets fell across the board with all the major indices trading down over 3%, and the Nasdaq again taking the brunt of the selling, fell 3.8%. Investors fear the tariff war will not be resolved as many had believed just Monday, and that the combination of global economic slowing, with the trade war, will pull markets lower in 2019. While the futures markets are up as of Wednesday afternoon, the market has been demonstrating a classic bear trading pattern for several weeks. Strong openings are often sold into, resulting in slow declines throughout the day.

Thursday Broadcom (AVGO), Kroger (KR) and Ulta Beauty (ULTA) report earnings. Broadcom has been inching higher since the October selloff, but was battered in the Tuesday market swoon, down over 4%. Monday, the company announced a partnership with HCL Technologies  (HCTHY) as Broadcom’s preferred training and professional services partner which analysts will be anxious to hear about on the earnings call. Ulta has disappointed investors the past few quarters as the company has reported falling sales and profitability. Analysts are looking for a more positive report from the company on Thursday, and are hoping operating margins have ticked up after challenging inventory and remodeling costs last quarter.

With markets and the federal government closed Wednesday, Thursday brings a full slate of economic numbers. Scheduled for release is the Challenger job cuts report, ADP employment report, jobless claims, productivity and costs, the PMI services numbers, factory orders, and the ISM non-manufacturing index. Analysts are expecting the addition of 175,000 new jobs and jobless claims to come in at 225,000, a slight downtick after the number has been rising the past few months. The PMI services index is expected to decrease slightly to 54.4 from an October reading of 54.8. Friday investors can pour over the employment situation numbers, consumer sentiment, and wholesale trade numbers.

 

Big Lots (BIG), Johnson Outdoors (JOUT) and Vail Resorts (MTN) close out earnings for the first week of December on Friday. Big Lots stock has been in negative territory almost all of 2018, with it’s one positive being that it did not fall much further in the recent market tumble starting in October. The discount retailer is in the middle of a store remodeling plan that will see approximately 200 of its stores receiving a facelift through 2019. Vail resorts should be off to a strong winter season as favorable weather patterns should boost early season sales. The stock is up nicely in 2018, even after a pullback in the recent market selloff. Analysts will be looking for an update on season pass sales as the company has been focusing more firepower on selling customers a season long experience as opposed to one-off ski weekends.  

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Market Preview: Progress on U.S./China Trade War Lifts Markets, Earnings from Dollar General and Autozone

Markets rallied strongly Monday after President Trump and Chinese President Xi Jinping agreed to a 90 day moratorium on trade tariffs in which the U.S. will hold off on raising tariffs by 25% at the beginning of 2019. Larry Kudlow, the President’s National Economic Council Director, said “If China opens its markets as they promised to do, and they’re going to do it fast according to their promises, we will increase our exports substantially…” Kudlow is well known on Wall Street, and many analysts put faith in his comments over often exaggerated political commentary regarding trade. Markets rallied from the outset Monday morning, gave back some of those gains, and then rallied again near the close. Investors are hoping Director Kudlow is correct and for a quick resolution to the trade issues. If a resolution is not arrived at either before, or soon after, the new year markets will see the 90 day window as simply kicking the can down the road.

Dollar General (DG), Autozone (AZO) and Marvell Technology (MRVL) all report earnings on Tuesday. As Todd Vasos, CEO of Dollar General stated last quarter, “our two-year same-store sales stack for the second quarter of 2018 was the highest in 10 quarters.” The company has been hitting on all cylinders this year, and raised earnings estimates as a result. The stock has been little impacted by the market pullback, and analysts expect another strong quarter from the discount retailer. Autozone earnings are expected to increase 23% year-over-year when the company reports before the bell Tuesday. After selling off earlier this year the stock has regained the $800 level, recently hitting all-time highs. Analysts are looking for another strong quarter, and an update on the company’s aggressive buyback program.

Tuesday, investors will get to take a peak at motor vehicle sales and Redbook retail numbers. The auto sales number is expected to decrease slightly to 17.2 million from the 17.5 reported in October. But both month’s numbers increased dramatically from a summer slump. Wednesday was to see Fed Chairman Powell deliver testimony to Congress’s Joint Economic Committee. But, the passing of President George H.W. Bush, and the declaration of a national day of mourning, means that testimony will be postponed. Stock markets in the U.S. have also announced that they will be closed on Wednesday to honor the nation’s 41st President.  

Wednesday the earnings focus on retailers continues as lululemon (LULU), Five Below (FIVE) and American Eagle Outfitters (AEO) report earnings. Last quarter lululemon handily beat estimates by 44% sending the stock higher yet again after an earnings beat. The stock has performed exceptionally well this year, rising from $80 to around $140. Investors will be looking for the athletic apparel company to provide color on the final few months of the year as we’re in the midst of the holiday season. American Eagle has stair-stepped lower since August of this year. The company has invested heavily in its online operations, and has achieved relatively strong sales numbers from that channel the past few quarters. Analysts will be looking for an update on the progress of the online initiative and what hurdles the company is encountering as it broadens its platform.

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Market Preview: Trade Hope Floats Markets into December

Markets moved gingerly higher on Friday in hopes that some progress toward resolving the China/U.S. trade war will emerge from this weekend’s G20 Summit. President Trump and Chinese President Xi Jinping are scheduled to share dinner Saturday evening and discuss trade matters. Trade tariff bellwether Caterpillar rose over 4% in anticipation of good news out of the meeting between the two leaders. With the Fed softening its stance on interest rates triggering a rally earlier in the week, progress toward a trade tariff solution could propel the markets straight into a Santa Claus rally in December.  But, given the contentious nature of the trade talks thus far, many analysts are taking a wait and see attitude toward the weekend’s talks. With a ramp-up in tariffs looming, many see this meeting as a last hope for resolution before the trade war moves to a new level.

Finisar (FNSR) and Smartsheet (SMAR) kick off the final month of the year when they report earnings on  Monday. Finisar rallied nicely from the October market selloff when it was announced November 9th that II-IV (IIIV) would be acquiring the fiber optic subsystem, test and monitoring company. Analysts will be looking for an update on the deal, including the expected closing date and whether the company anticipates any hurdles to the closing. Smartsheet will be reporting its third earnings numbers since the company went public in April. The cloud based work management company has taken investors on a bit of a roller coaster ride since going public, but is up nicely from its IPO. Also reporting Monday are Coupa Software (COUP) and Mesa Air (MESA).

The economic reporting week kicks off Monday with both PMI and ISM manufacturing data. Analysts will be looking for any weakness in the numbers due to tariff issues as news from the G20 Summit is first reflected in the markets on Monday. Construction spending numbers will also be released, and are expected to come in flat month-over-month. Tuesday, motor vehicle sales and Redbook retail numbers will be released. PMI services and ISM non-manufacturing data will be presented on Wednesday. Investors will also be focusing on comments from Fed Chairman Powell as he gives his first speech following this weeks apparent change in direction by the Fed. The Chairman is scheduled to speak at 10:15. Other data coming Wednesday includes the ADP employment report and mortgage application numbers. Thursday we’ll get the Challenger job cut report and jobless claims, as well as international trade numbers and factory orders. We’ll close out the first week of December with the employment situation numbers, wholesale trade, and consumer sentiment on Friday.

Notable earnings reports next week include Dollar General (DG) and Autozone (AZO) on Tuesday. Followed by Five Below (FIVE) and lululemon (LULU) on Wednesday. This combination of retailers should provide a good view of how holiday sales on both the value and high end are shaping up so far. Thursday brings a broad view of the economy as Kroger (KR), Ulta Beauty (ULTA) and Broadcom (AVGO) all report. The last two earnings reports of the week will come from Johnson Outdoors (JOUT) and Vail Resorts (MTN) on Friday.

 

 

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Market Preview: Fed Changes Tune on Interest Rates and Market Booms

Almost two months after saying interest rates were “a long way” from neutral, and causing a communal hand-wringing across Wall Street, Fed Chairman Jerome Powell reversed course today stating that interest rates are “just below…the level that would be neutral for the economy.” The Chairman went on to state that the Fed has “no preset policy path,” and that it is “paying very close attention to what incoming economic and financial data are telling us.” Mr. Powell’s remarks sent the market into rally mode apparently taking off the table one of the major barriers to a higher stock market – an aggressive Fed raising rates on a preset path with no regard to developing data. A rapidly deteriorating housing market, year-over-year numbers released earlier today showed a 12% decline in new home sales, badly missing estimates, likely played a major role in the Fed Chairman’s apparent about face.

Workday (WDAY) reports earnings on Thursday. The HCM (human capital management) software company has been growing rapidly both organically and through acquisitions. Investors will be interested to hear the company’s latest projections on when it will reach positive earnings given its strong revenue growth. Also reporting on Thursday is Abercrombie & Fitch (ANF). The company’s Hollister brand, which had been carrying the water for the stock in recent quarters, did not see the double digit comps investors had come to expect when ANF last reported. While cost cutting has been trending positive, analysts want to see a return to growth for the company’s flagship brand to get the stock back into the $20s. Also reporting numbers on Thursday are Vmware (VMW) and HP Inc. (HPQ).

While the rest of the week’s economic numbers will likely not have the impact of Chairman Powell’s speech Wednesday, there is still a variety of economic data to report. Thursday morning will see the release of jobless claims, personal income and outlays, and pending home sales. Once again the home sales data will be front and center for market analysts. The month-over-month number is expected to come in flat, but after today’s new home sales miss it will not be surprising to see more weakness than expected. We’ll close the economic reporting for November on Friday when Chicago PMI and the Baker-Hughes rig count numbers are released. Analysts will be interested to see if rig counts are still trending higher given the recent collapse in oil prices and reports that both the U.S. and Saudi Arabia are pumping oil at record levels.

Friday investors will comb through earnings from BRP (DOOO) and Fang Holdings (SFUN). BRP, the maker of Sea-Doo personal watercraft and Can-Am bikes, today announced a reorganization of the leadership of the company’s Powersports Group. Analysts will be expecting a rundown of the new team and whether the reorg reflects taking the group in a new direction. Chinese real estate internet portal Fang Holdings has been a disaster for the company’s stockholders in 2018. Investors will want an update on company plans to address the weakness in China and where the company sees the Chinese market heading in 2019.  

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Market Preview: Strong Holiday Sales Lift Market

Stocks rallied Monday following very healthy Black Friday and projected record Cyber Monday sales. Retail sales for the largest one day online shopping day in U.S. history were expected to come in at $7.8 billion. The projected numbers were enough to lift retailers, Amazon (AMZN) rose over 5%, Target added almost 3%, and the overall market for a nice one day rally. The DJIA was up 1.46%, the Nasdaq jumped 2.06%, and the S&P 500 rose 1.55%. The real question facing investors is whether this is a short-lived bear rally before the market continues to roll over, or if this marks the turning point of the recent correction which has decimated many high flying stocks. The wall of worry is clearly in place with tariff tensions, an aggressive Fed, Brexit concerns, and a faltering housing market. Prognostications on whether the aging bull is able to continue climbing the wall into 2019, or has already come to a final resting place, have begun shaping year end portfolio rebalancing decisions.

Salesforce (CRM) reports after the close on Tuesday. The 500 pound gorilla in the customer relationship market has fallen over 20% since the beginning of October. Investors will be focused on margins and customer retention rates at the software provider. Margins have taken a hit as the company integrates its latest acquisitions, such as Mulesoft from earlier this year. Analysts would like to see those margins rise once the dust has settled. Cracker Barrel (CBRL) will also release earnings Tuesday. The family focused casual restaurant took a hit after missing on earnings and sales estimates in September. But, the stock has rallied strongly since then closing in on all time highs reached earlier this year. Earnings should give a good read on how the consumer is holding up in a rising interest rate environment.

Tuesday analysts will be focused on housing as the S&P Corelogic Case-Shiller and the FHFA housing price indexes are both released. The FHFA numbers, though still rising, have decelerated at a rapid pace since the end of 2017. Analysts fear rising rates, combined with a shortage of labor, are hitting entry level homes especially hard. Also released Tuesday is consumer confidence and the Redbook retail numbers. GDP will be the focus on Wednesday. Estimates are for Q3 GDP of 3.5% with consumer spending coming in at 3.7%. Also on tap are MBA mortgage applications and retail inventories. Investors will also want to tune-in as Fed Chairman Powell participates in a luncheon at the Economic Club of New York. The Chairman is scheduled to deliver remarks at 11:30am.

Retailers, from the high end to value discounters take the stage on Wednesday. Tiffany (TIF) and Burlington Stores (BURL) both report before the market opens. Tiffany has been on the comeback trail and has seen improving margins as cost controls have borne fruit. Analysts will have a close eye on the international business and whether tariffs are becoming an issue for the high end jeweler. Burlington has been on a roll this year. Even after the recent market induced selloff the company’s stock is still up about 20% in 2018. Burlington is expected to post a 51% gain in earnings on a year-over-year basis with analysts expecting $1.06 a share.       

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Market Preview: Markets Continue to Tumble

Investors had little to be thankful for this holiday week as markets continued to tumble. Trade tensions, falling oil prices, and a massive drop in cryptocurrencies resulted in markets falling across the board. The DJIA fell .73%, the S&P 500 dropped .66%, and the Nasdaq fell .48%. A Santa Claus rally was nowhere in sight, and investors are running out of time as end of year approaches.

Stoneco Ltd. (STNE) reports earnings for the first time on Monday. The company’s IPO was a big success when the payments processor came public in early October. Rocketing to $32 from an initial pricing of $24, the Brazilian company looked on its way. But the continued battering of the market has now dropped the share prices back below its offering price. Also reporting Monday is Enanta Pharmaceuticals (ENTA). The pharma company has not participated in the bull market in healthcare stocks this year. Analysts will be looking for an update on the company’s EPD-938 drug aimed at the RSV (respiratory syncytial virus). The new drug is meant to be effective in the under 2 year old age group where there are few options available now.

After a long weekend for many traders, economic numbers on Monday include the Chicago Fed National Activity Index and the Dallas Fed manufacturing numbers. The Chicago number will be closely watched as it measures activity at a national level and has been trending down recently. Tuesday, analysts will again dive into housing numbers when the S&P Corelogic Case-Shiller Housing Price Index is released. The FHFA home price index also comes out Tuesday morning. Analysts will be looking for any weakness in the numbers as a further deterioration in the housing market. Consumer confidence and Redbook retail numbers are released Tuesday as well. Wednesday the focus will be on GDP numbers. Also released will be mortgage applications, corporate profits, new home sales, and the State Street investor confidence numbers. Thursday investors will dissect jobless claims, pending home sales, and personal income. The final week of November will close out with Chicago PMI numbers and the Baker Hughes rig count. Analysts will be looking for the impact of falling oil prices on the rig count headed into the winter season.

Tuesday, Salesforce (CRM) will take to the earnings stage. The customer relationship management focused tech company has been hit hard in the recent market selloff. Also reporting Tuesday are Eaton Vance (EV) and Cracker Barrel (CBRL). Retail will be in focus Wednesday as Burlington Stores (BURL), Dick’s Sporting Goods (DKS), and Guess? (GES) all report earnings. Thursday we can expect earnings from HP (HPQ), Workday (WDAY, and Dell Technologies (DVMT). BRP (DOOO), Citi Trends (CTRN) and Destination XL Group (DXLG) close out the earnings week on Friday.

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