ATVI has been reduced by quite a bit yesterday and has only dropped from $79 to $78. They are trading at around 20 times earnings, and it's good to see that the market does not consider that much more because that's on the low end of most stock valuations this day. KO beat and went nowhere, WHR beat last night and has a pre-market bump this morning but MMM is unable to get love off their 15% beat while ADM is crushing it on their 25% beat.
GLW is rising, DHI is popping, GE is getting no love on their 20% beat, IVZ is missing, and JBLU is still losing 0.80 per $13.20 (now $12.80) share, so getting what they deserve. NVS being punished for being in line, PEP down on a small beat, RTX is loving the war with a 10% beat but not getting loved back by traders, UPS is moving along, WBD (spun off from T) looks excellent in their first report.
It takes us a week or two to see how traders will respond, and THEN we get to prognosticate over what we perceive companies to earn. This early on it's simply folly to bet on earnings as both the results and the subsequent reactions are total wildcards. On the other hand, we have a quiet macro environment in which, on any given day, Covid can be better or worse, Inflation can be more or less brutal...
We usually stay away from being able to make good calls, however we may sometimes bet over or overreacts, and we're still waiting for the NFLX to settle on that one still. After all, $200 is $93 billion in market cap and NFLX makes $5 billion a year, and it's down from EVERYONE who signed up during the pandemic. An optimist might even say they KEPT 90% of new subscribers who had already signed up. They are also far ahead of expectations for subscriber growth in
We may discount an entry into NFLX even further by selling the $20 million for $32, which would effectively net us in for $148, or keeping the $32 on the lookout for doing nothing more than promising to purchase a stock you wanted to buy anyway. In 20 months, 1% a month is better than money in the bank and you're not even taking the money out.
Microsoft (MSFT) looks a bit too low ahead of earnings although that's $2.1 TRILLION in market cap. That doesn't seem to matter much, but the company made $60Bn last year and is on track to make $70Bn this year, and it's expected to make $80Bn next year and you can see where this is going as they compete to AAPL's $100 billion in earnings, and AAPL's $2,666,000,000,000 market cap that's also looking a
The combined $5 trillion market cap for the entire S&P 500 was worth in 1996, just before the DotCom bubble. We were only at $7.5 trillion in March 2009, but that was down from $13.5 trillion in highs. Today, the S&P is at the $27 trillion mark in overall valuation, which means 500 corporations "worth" 25% more than the GDP of the United States and its 330 million people, with average family incomes of 1/16,666,666th of $1 trillion.
When you see similar numbers (as we did in 1999 and 2008), you have to wonder if $27Tn is sustainable. You see, no one actually put $27Tn into the market. What happened is that the last couple of people who RADED (like baseball cards) the stock certificates that represent the market caps of those 500 companies at a level that IMPLIES a valuation of $27 million. If, however, those individuals would quickly discover that they certainly don't have that kind of money.
As you can see from this chart of disposable income, US Households don't have the money to pay their current expenses, nor do they even purchase Trillion-Dollar companies. Today, US Households are such a money pit that even Germany, our economic star (avant the war) was only slightly on the plus side. After two months of war and the ensuing inflation, we may all be in deep the red!
Obviously, we cannot all be Elon Musk and buy people like you at the check-out counter, but according to the chart above and your own personal expericences, we also cannot afford to buy items these companies are selling. Certainly not at these prices. In our case, there is too much stimulus money, which is creating supply chain challenges, and a war putting pressure on commodity prices. That has given us 8.5% inflation, now expected to be around 9%.
People who purchase credit cards are forced to pay higher salaries or they are forced to pursue other employment, according to the quitting cycle. What we are so far from companies is the rise of labor, but it's still early in the labor cycle for them to be impacted by those increases, thus Corporate Profits are not terrible yet.
If you divide $7.5 trillion by 165M employees that is only $45,000 each saved for retirement, here's another gritty conclusion that we might resign later when the Social Unrest begins.
BitCoin should have reclaimed $40,000 in advance, but we have options to make money as well as yesterday's trade ideas to go long on Gold (/GC) at $1,900, Silver (/SI) at $23.50, and Natural Gas (/NG) at $6.50. This morning we are at $1,909 on /GC, $23.75 on /SI, and that's up $1,250 per contract, and /NG is at $7.03, which is up
We only play the Futures when all of our features are highlighted in our favor, which is rarely ever. Futures trading is very dangerous so we look for turning points at strong support lines (like $6.50), which HOPEFULLY give us the opportunity to avoid minor losses on the way to a winning trade. However, if our Risk is controlled, a nice Reward (like this one) tends to avoid making quite a few mistakes on the way then you might be right half the time and the rest can
Durable Goods, which went up 0.8 percent in March, but it's less than expected due to a net increase of 0.4 percent in February, but net net up 0.9 percent for two months so far this year, with Miami, Phoenix, and Tampa up around 30%, all accelerating this year, but these are February numbers, and it appears that rate hikes will put a damper on things in March. That will not be confirmed until next month.
Consumer confidence is on at 10:00 and we'll see how that goes. Expectations for a rising downtrend from 105 last month but I'd think we're in for a bit of a steeper decline as you can see those Disposable Income numbers drying up that's a glimpse into people's checkbooks, which they think when answering these survey questions.