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DOW JONES INDUSTRIALS, OTHER INDEXES, METALS, BITCOIN AND CANADIAN CLOSING PRICES JUNE 26, 2020:
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Market were lower and look lower but it may or may not be a bee line to the basement. Canada Day is Wednesday and Fourth of July holiday week is ahead with the U.S. market closed next Friday. Normally, everyone 'hits the road' this week, so whether the virus scare changes things and people decide not to travel we will just have to wait and see. We would normally expect to see a rally around the Fourth! Regardless, the market is corrective mode and there is more talk that Trump may not get re-elected which may be 'fake-news'. The correction may be 'engineered' to provide an incentive for the U.S. House and Senate to come to terms to another stimulus bill. That said, market cycles are frankly week going forward into the Fall. Tough call except for short-term trading. Precious metals, gun shares, high-tech trucks, alternative fuel shares and even solar shares seem to be in play here.
The S&P 500 dropped 2.4% on Friday in a risk-off session amid the continued rise in new coronavirus cases and industry-specific issues for the banks and social media companies. The Dow Jones Industrial Average (-2.8%), Nasdaq Composite (-2.6%), and Russell 2000 (-2.4%) also fell more than 2.0%.
All 11 S&P 500 sectors closed in negative territory, with the financials (-4.3%) and communication services (-4.5%) sectors falling more than 4%. The utilities sector
declined the least with a 1.0% decline.
The U.S. hit another daily record for new coronavirus cases, prompting hotspots like Texas and Florida to scale back their reopening efforts. The reduced reopening activity threatens to undermine consumer sentiment and personal spending, the latter of which rebounded 8.2% m/m in May (Briefing.com consensus +7.0%).
Unfortunately, the market was also burdened by other developments. Banks were pressured by the Fed's decision to require them to suspend share repurchases and cap dividend payments in the third quarter (out of an abundance of caution), while more companies suspended ad spending on Facebook (FB 216.08, -19.60, -8.3%).
Verizon (VZ 53.16, -1.12, -2.1%), Unilever (UN 54.51, -0.32, -0.6%), and Honda Motor (HMC 25.33, -0.92, -3.5%) joined the growing list of companies that paused spending, which was a wake-up call for companies that derive revenue from advertising in how they handle misconduct within their platforms.
Facebook shares fell 8%, but Alphabet (GOOG 1359.90, -81.43, -5.7%) and Twitter (TWTR 29.05, -2.32, -7.4%) also took it on the chin.
In other developments, Nike (NKE 93.67, -7.73, -7.6%) missed top and bottom-line estimates, Cisco (CSCO 46.31, +1.09, +2.4%) was the lone Dow component to close higher amid news that the Trump administration is thinking about helping the company in 5G development, and the yearly rebalancing of the FTSE Russell indices happened at the close.
Quarter-end rebalancing might have played a part in today's decline, too, as investors re-allocated money into bonds. The 2-yr yield was unchanged at 0.16%, while the 10-yr yield declined four basis points to 0.64%. The U.S. Dollar Index was little changed at 97.45. WTI crude declined 0.7%, or $0.26, to $38.49/bbl.
Reviewing Friday's economic data:
Personal income declined 4.2% m/m in May (Briefing.com consensus -6.0%) following a 10.8% increase in April while personal spending surged 8.2% (Briefing.com consensus 7.0%) after declining 12.6% in April. The PCE Price Index and core-PCE Price Index, which excludes food and energy, were both up 0.1% and slightly ahead of consensus estimates. The key takeaway from the report is that the personal savings rate, as a percentage of disposable income, remains exceptionally high at 23.2%. Granted that's down from 32.2% in April, but a high savings rate means less spending activity, which means less economic growth. The final University of Michigan Index of Consumer Sentiment for June slipped to 78.1 from the preliminary reading of 78.9. The final reading for May was 72.3, so the sentiment level is still higher than the prior month. The key takeaway from the report is the contention that consumer attitudes and demand will be influenced by the progress -- or lack thereof -- against the coronavirus.
CANADIAN MARKETS:
It was a day out in the negative territory for Canadian shares on Friday as worries about economic growth rose after reports showed another surge in new coronavirus cases in several parts of the U.S. and in a few other countries, including China.
The Federal Reserve's stress test results of top banks took a toll of banking stocks in the U.S., and stocks in Canadian banking space tumbled as well. Crude oil's decline
triggered concerns about outlook for energy demand and pushed down oil stocks. Healthcare, utilities, consumer discretionary and telecommunications shares also ended sharply lower.
The benchmark S&P/TSX Composite Index, which plunged to a low of 15,167.59, sliding gradually after a weak start, ended the day with a loss of 257.16 points or 1.66% at 15,188.98. The index shed 1.82% in the week.
Bank of Montreal (BMO.TO), Canadian Imperial Bank of Commerce (CM.TO), National Bank of Canada (NA.TO), Bank of Nova Scotia (BNS.TO) and Toronto-Dominion Bank (TD.TO) lost 2.4 to 4%. Royal Bank of Canada (RY.TO) declined 2.1%.
TC Energy Corporation (TRP.TO), Air Canada (AC.TO), Suncor Energy (SU.TO), Enbridge Inc. (ENB.TO), BCE (BCE.TO), Power Corporation of Canda (POW.TO) and Nutrien (NTR.TO) ended lower by 1.6 to 2.4%.
Newmont Corporation (NGT.TO), Kinross Gold Corporation (K.TO), SSR Mining (SSRM.TO), Real Matters (REAL.TO) and TFI International (TFII) were among the notable gainers in the session.
MONDAY
Noteworthy Earnings Reports: Micron Technology (MU)
TUESDAY
Earnings Spotlight: FedEx (FDX, $135.46) – International delivery service giant FedEx's 2020 has been similar to most other companies: a bear-market drop from February to March, and a partial recovery since, while the struggling economy continues to weigh heavily on operational performance. Citi analyst Christian Wetherbee says fiscal fourth-quarter results, due out after the June 30 closing bell, will be "very challenging." Indeed, as a whole, analysts are expecting a mild 7% decline in revenues to $16.56 billion, but a 62.1% plunge in profits to $1.90 per share. Still, the pros are warming up to the name. Wetherbee, who has a Buy rating on shares, is one of several analysts that recently raised their price targets on FDX. Wetherbee upgraded his target from $140 per share to $160, writing that he thinks "the worst is almost over" and that a rebound in profits should come in the first half of next year. BMO Capital's Fadi Chamoun is looking for $130 per share, up from $115, but with a Hold-equivalent Market Perform rating and a less bullish outlook: "Structural challenges for Ground segment profitability, limited visibility into the Express segment self-help improvement opportunity, and weak cash flow and balance sheet render the risk/reward more balanced at current levels."
WEDNESDAY
Earnings Spotlight: Macy's (M, $6.50) – Macy's, like the rest of the market, plunged in February and March, but its recovery has been tepid; shares are down more than 60% year-to-date as the coronavirus continues to choke Macy's already struggling operations. In early June, Macy's provided preliminary Q1 results, including an adjusted loss of $2.03 per share, versus a 28-cent profit in the year-ago period – analysts' current mark is for a $2.57-per-share deficit. Macy's also said revenues likely fell from $5.50 billion to $3.02 billion; the pros are looking for a 32.9% decline to $3.72 billion in the official results. It's actually quite uncommon for Wall Street to have a consensus Sell call on a stock, but they do for Macy's, which has racked up five Sells, three Holds and no Buys over the past three months. Kimberly Greenberger (Underweight, equivalent of Sell) called preliminary Q1 results "largely unremarkable" and lowered her full-year 2020 operational estimates for the retailer. She's also worried about "the potential for permanent market share loss" after the pandemic has passed.
Earnings Spotlight: Constellation Brands (STZ, $173.33) – Constellation Brands – the name behind Svedka vodka, High West whiskey, Robert Mondavi wines and Corona beers, among many other alcoholic beverages, has performed roughly in line with the rest of the market so far in 2020. Analysts are largely optimistic about the name – Cowen's Vivien Azer (Outperform) calls STZ one of the best-positioned names in beer, and JPMorgan Chase analysts added Constellation Brands to its Analyst Focus List, believing that the Model and Corona brands will "accelerate as Mexico beer production normalizes." The company is expected to report earnings ahead of the July 1 open. Right now, analysts are looking for a 6.3% decline in revenues to $1.96 billion, and a 10.4% decline in profits to $1.98 per share.
Other Noteworthy Reports: Capri Holdings (CPRI), General Mills (GIS)
THURSDAY
Noteworthy Earnings Reports: Korn Ferry (KFY)
FRIDAY
Noteworthy Earnings Reports: N/A (Market closed to observe Independence Day)
WATCH THE ABOVE DATES FOR MARKET ACTION - VOLATILITY - HIGHS OR LOWS.
declined the least with a 1.0% decline.
The U.S. hit another daily record for new coronavirus cases, prompting hotspots like Texas and Florida to scale back their reopening efforts. The reduced reopening activity threatens to undermine consumer sentiment and personal spending, the latter of which rebounded 8.2% m/m in May (Briefing.com consensus +7.0%).
Unfortunately, the market was also burdened by other developments. Banks were pressured by the Fed's decision to require them to suspend share repurchases and cap dividend payments in the third quarter (out of an abundance of caution), while more companies suspended ad spending on Facebook (FB 216.08, -19.60, -8.3%).
Verizon (VZ 53.16, -1.12, -2.1%), Unilever (UN 54.51, -0.32, -0.6%), and Honda Motor (HMC 25.33, -0.92, -3.5%) joined the growing list of companies that paused spending, which was a wake-up call for companies that derive revenue from advertising in how they handle misconduct within their platforms.
Facebook shares fell 8%, but Alphabet (GOOG 1359.90, -81.43, -5.7%) and Twitter (TWTR 29.05, -2.32, -7.4%) also took it on the chin.
In other developments, Nike (NKE 93.67, -7.73, -7.6%) missed top and bottom-line estimates, Cisco (CSCO 46.31, +1.09, +2.4%) was the lone Dow component to close higher amid news that the Trump administration is thinking about helping the company in 5G development, and the yearly rebalancing of the FTSE Russell indices happened at the close.
Quarter-end rebalancing might have played a part in today's decline, too, as investors re-allocated money into bonds. The 2-yr yield was unchanged at 0.16%, while the 10-yr yield declined four basis points to 0.64%. The U.S. Dollar Index was little changed at 97.45. WTI crude declined 0.7%, or $0.26, to $38.49/bbl.
Reviewing Friday's economic data:
Personal income declined 4.2% m/m in May (Briefing.com consensus -6.0%) following a 10.8% increase in April while personal spending surged 8.2% (Briefing.com consensus 7.0%) after declining 12.6% in April. The PCE Price Index and core-PCE Price Index, which excludes food and energy, were both up 0.1% and slightly ahead of consensus estimates. The key takeaway from the report is that the personal savings rate, as a percentage of disposable income, remains exceptionally high at 23.2%. Granted that's down from 32.2% in April, but a high savings rate means less spending activity, which means less economic growth. The final University of Michigan Index of Consumer Sentiment for June slipped to 78.1 from the preliminary reading of 78.9. The final reading for May was 72.3, so the sentiment level is still higher than the prior month. The key takeaway from the report is the contention that consumer attitudes and demand will be influenced by the progress -- or lack thereof -- against the coronavirus.
CANADIAN MARKETS:
It was a day out in the negative territory for Canadian shares on Friday as worries about economic growth rose after reports showed another surge in new coronavirus cases in several parts of the U.S. and in a few other countries, including China.
The Federal Reserve's stress test results of top banks took a toll of banking stocks in the U.S., and stocks in Canadian banking space tumbled as well. Crude oil's decline
triggered concerns about outlook for energy demand and pushed down oil stocks. Healthcare, utilities, consumer discretionary and telecommunications shares also ended sharply lower.
The benchmark S&P/TSX Composite Index, which plunged to a low of 15,167.59, sliding gradually after a weak start, ended the day with a loss of 257.16 points or 1.66% at 15,188.98. The index shed 1.82% in the week.
Bank of Montreal (BMO.TO), Canadian Imperial Bank of Commerce (CM.TO), National Bank of Canada (NA.TO), Bank of Nova Scotia (BNS.TO) and Toronto-Dominion Bank (TD.TO) lost 2.4 to 4%. Royal Bank of Canada (RY.TO) declined 2.1%.
TC Energy Corporation (TRP.TO), Air Canada (AC.TO), Suncor Energy (SU.TO), Enbridge Inc. (ENB.TO), BCE (BCE.TO), Power Corporation of Canda (POW.TO) and Nutrien (NTR.TO) ended lower by 1.6 to 2.4%.
Newmont Corporation (NGT.TO), Kinross Gold Corporation (K.TO), SSR Mining (SSRM.TO), Real Matters (REAL.TO) and TFI International (TFII) were among the notable gainers in the session.
Noteworthy Earnings Reports: Micron Technology (MU)
TUESDAY
Earnings Spotlight: FedEx (FDX, $135.46) – International delivery service giant FedEx's 2020 has been similar to most other companies: a bear-market drop from February to March, and a partial recovery since, while the struggling economy continues to weigh heavily on operational performance. Citi analyst Christian Wetherbee says fiscal fourth-quarter results, due out after the June 30 closing bell, will be "very challenging." Indeed, as a whole, analysts are expecting a mild 7% decline in revenues to $16.56 billion, but a 62.1% plunge in profits to $1.90 per share. Still, the pros are warming up to the name. Wetherbee, who has a Buy rating on shares, is one of several analysts that recently raised their price targets on FDX. Wetherbee upgraded his target from $140 per share to $160, writing that he thinks "the worst is almost over" and that a rebound in profits should come in the first half of next year. BMO Capital's Fadi Chamoun is looking for $130 per share, up from $115, but with a Hold-equivalent Market Perform rating and a less bullish outlook: "Structural challenges for Ground segment profitability, limited visibility into the Express segment self-help improvement opportunity, and weak cash flow and balance sheet render the risk/reward more balanced at current levels."
WEDNESDAY
Earnings Spotlight: Macy's (M, $6.50) – Macy's, like the rest of the market, plunged in February and March, but its recovery has been tepid; shares are down more than 60% year-to-date as the coronavirus continues to choke Macy's already struggling operations. In early June, Macy's provided preliminary Q1 results, including an adjusted loss of $2.03 per share, versus a 28-cent profit in the year-ago period – analysts' current mark is for a $2.57-per-share deficit. Macy's also said revenues likely fell from $5.50 billion to $3.02 billion; the pros are looking for a 32.9% decline to $3.72 billion in the official results. It's actually quite uncommon for Wall Street to have a consensus Sell call on a stock, but they do for Macy's, which has racked up five Sells, three Holds and no Buys over the past three months. Kimberly Greenberger (Underweight, equivalent of Sell) called preliminary Q1 results "largely unremarkable" and lowered her full-year 2020 operational estimates for the retailer. She's also worried about "the potential for permanent market share loss" after the pandemic has passed.
Earnings Spotlight: Constellation Brands (STZ, $173.33) – Constellation Brands – the name behind Svedka vodka, High West whiskey, Robert Mondavi wines and Corona beers, among many other alcoholic beverages, has performed roughly in line with the rest of the market so far in 2020. Analysts are largely optimistic about the name – Cowen's Vivien Azer (Outperform) calls STZ one of the best-positioned names in beer, and JPMorgan Chase analysts added Constellation Brands to its Analyst Focus List, believing that the Model and Corona brands will "accelerate as Mexico beer production normalizes." The company is expected to report earnings ahead of the July 1 open. Right now, analysts are looking for a 6.3% decline in revenues to $1.96 billion, and a 10.4% decline in profits to $1.98 per share.
Other Noteworthy Reports: Capri Holdings (CPRI), General Mills (GIS)
THURSDAY
Noteworthy Earnings Reports: Korn Ferry (KFY)
FRIDAY
Noteworthy Earnings Reports: N/A (Market closed to observe Independence Day)
WATCH THE ABOVE DATES FOR MARKET ACTION - VOLATILITY - HIGHS OR LOWS.
The latest Wall Street Journal/NBC News Poll shows that a stunning 80% of Americans think the country is out of control. Many will blame him (Trump) for letting the country slip out of control, but he is counting on voters who think a strongman is the person who can reassert control… this represents a Trumpian attempt to turn a liability into an asset. – Gerald F. Seib, “For Trump, A Clear Campaign Script Emerges,” Wall Street Journal, June 16, 2020.
“Democracy is the worst form of government, except for all the others.” Winston Churchill, as re-quoted from the Wall Street Journal Opinion Page, June 19, 2020.
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© Copyright 2020. All rights reserved.
In using LeibovitVRnewsletters.com (a/k/a LeibovitVRNewsletters LLC) you agree to these Terms & Conditions governing the use of the service. These Terms & Conditions are subject to change without notice. We are publishers and are not registered as a broker-dealer or investment adviser either with the U.S. Securities and Exchange Commission or with any state securities authority.
All stocks and ETFs discussed are HYPOTHETICAL and not actual trades whose actual execution may differ markedly from prices posted on the website and in emails. This may be due internet connectivity, quote delays, data entry errors and other market conditions. Hypothetical or simulated performance results have certain inherent limitations as to liquidity and execution among other variables. PAST RESULTS ARE NOT NECESSARILY INDICATIVE OF FUTURE FORECASTING ACCURACY OR PROFITABLE TRADING RESULTS.
All investments are subject to risk, which should be considered on an individual basis before making any investment decision. We are not responsible for errors and omissions. These publications are intended solely for information and educational purposes only and the content within is not to be construed, under any circumstances, as an offer to buy or to sell or a solicitation to buy or sell or trade in any commodities or securities named within.
All commentary is provided for educational purposes only. This material is based upon information we consider reliable. However, accuracy is not guaranteed. Subscribers should always do their own investigation before investing in any security. Furthermore, you cannot be assured that your will profit or that any losses can or will be limited. It is important to know that no guarantee of any kind is implied nor possible where projections of future conditions in the markets are attempted.
Stocks and ETFs may be held by principals of LeibovitVRNewsletters LLC whose personal investment decisions including entry and exit points may differ from guidelines posted.
LeibovitVRNewsletters.com cannot and do not assess, verify or guarantee the suitability or profitability of any particular investment. You bear responsibility for your own investment research and decisions and should seek the advice of a qualified securities professional before making any investment. As an express condition of using this service and anytime after ending the service, you agree not to hold LeibovitVRNewsletters.com or any employees liable for trading losses, lost profits or other damages resulting from your use of information on the Site in any form (Web-based, email-based, or downloadable software), and you agree to indemnify and hold LeibovitVRNewsletters.com and its employees harmless from and against any and all claims, losses, liabilities, costs, and expenses (including but not limited to attorneys' fees) arising from your violation of this agreement. This paragraph is not intended to limit rights available to you or to us that may be available under the federal securities laws.
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WHEN THE PEOPLE FEAR THE GOVERNMENT THERE IS TYRANNY!
WHEN THE GOVERNMENT FEARS THE PEOPLE THERE IS LIBERTY!
Leviticus 25:10The bell is inscribed with Leviticus 25:10, “Proclaim liberty throughout all the land unto all the inhabitants thereof.” The verse refers to the Year of Jubilee when slaves were to be set free in accordance with Hebrew tradition.
REMEMBER, THERE IS NO FREEDOM WITHOUT THE LAW, REGARDLESS OF YOUR FAITH!
The post VRTRADER SILVER FOR MONDAY, JUNE 29, 2020 appeared first on The Leibovit VR Newsletter.
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