Bulls were not to give up the breakout gains from earlier in the week and with the exception of the Russell 2000 it was a decent finish for markets. Action in the Russell 2000 was only disappointing because it was unable to hold on to early day gains. The spike high may mark resistance over the coming days as Friday’s candlestick was a typical reversal marker. Technicals are healthy, although the index is underperforming relative to Tech and Large Caps. Large Caps had best of the action. The S&P finished above its open while the Dow Industrials clung on to its breakout. The Nasdaq held its ground and Tech average...
The S&P 500 trades at an elevated valuation on almost every metric. The forward P/E multiple of the S&P 500 has risen by 80% since 2011 (to 18x) and now trades at the 89th percentile compared with the past 40 years while the typical stock is at the 99th percentile of historical valuation. That’s from Goldman and it serves as a nice intro to what’s become something of a tradition here at HR: a periodic public service announcement about what it is exactly that you are buying into if you’re getting long US equities at these levels. These quick, chart-heavy posts are a nice break from some of our more esoteric pieces. And in that ...
NFLX Stock Predictions Summary: As one of the famous FANG stocks, Netflix enjoys a stratospheric valuation when compared to other technology tickers. Like Amazon and Facebook, Netflix is a growth-driven company. In spite of stiff competition, FANG stocks managed to establish themselves as long-term leaders in their chosen line of business. Unlike Amazon though, Netflix has made a successful global expansion. Its international subscriber count is now larger than in the U.S. This is a very strong reason to stay or go long NFLX. International expansion will keep this company’s strong growth momentum. NFLX has positive near-term and long-term a...
In the past few weeks and months we have seen some reports wherein it became clear Germany is actually selling some of its gold on a monthly basis. That’s an interesting phenomenon as it’s weird to see a country secretly repatriating its gold which it starts to sell shortly afterwards. There’s no doubt it must have been easier to start selling when it was still located in the foreign vaults, and just transfer the cash proceeds back to Berlin or the Bundesbank. But okay, the sales are pretty marginal as Germany ‘dumped’ just 120,000 ounces of gold in the past three months. A move from 108.6 million ounces to 108.48 million ounces i...
Last week I tumbled down the rabbit hole of quantitative finance, so this week I thought that I would take stock on some of the main themes. The continued woes of the greenback are probably the main story for markets at the moment. It is driven by a number of factors as far as I can see. Firstly, economic data in the U.S—in particular core inflation—have remained underwhelming, which have forced markets to roll back on their expectations for Fed rate hikes. September, which was a done deal only a few months ago, has now become a long shot. Secondly, just as the Fed’s hiking cycle potentially has hit a snag, other central banks have ...
Fundamental Australian Dollar Forecast: Neutral The Australian Dollar is in something of a sweet spot Rate differentials, local data and Chinese growth all look more supportive However, the RBA is clearly watching it very closely at current, high levels Late last week the biggest near-term risk facing rampant Australian Dollar bulls became clear: it’s the currency’s own central bank. Reserve Bank of Australia Deputy Governor Guy Debelle gave AUD/USD serious pause on Friday. He spoke in Adelaide and poured cold water on the idea that recent RBA discussions of Australia’s neutral interest rate presaged any prospect of a hike in the cou...
Over the last five trading days, major banks displayed a bearish trend. Though most banks which reported second-quarter 2017 results this week managed to beat estimates, concerns over the underlying weakness shadowed the optimism. Results demonstrated an upswing in loans and improved margins. However, lower treasury yields curbed the benefits. Additionally, rise in deposit balances and lower provisions driven by reserve releases in the Oil & Gas loan portfolio were impressive. Investment banking fees were favorable, but fixed income and equity trading slumped during the quarter. Also, higher funding costs and decline in mortgage originati...
The Top 10 of the Ranking and Rating list for the coming week shows the following stronger currencies being well represented for going long: the CAD(3X) with the NZD(4X) followed by the EUR(2X) . The weaker currencies are the GBP(5X) followed by the USD(3X) and the JPY(2X). By diversifying a nice combination can be traded in the coming week like e.g.: GBP/CAD with the EUR/GBP NZD/USD with the CAD/JPY Ranking and Rating list Analysis based on TA charts for all the major currency pairs. Every week the Forex ranking rating list will be prepared for the weekend. All the relevant Time Frames will be analyzed and the ATR and Pip value will be set...
How should electricity from wind turbines and solar panels be evaluated? Should it be evaluated as if these devices are stand-alone devices? Or do these devices provide electricity that is of such low quality, because of its intermittency and other factors, that we should recognize the need for supporting services associated with actually putting the electricity on the grid? This question comes up in many types of evaluations, including Levelized Cost of Energy (LCOE), Energy Return on Energy Invested (EROI), Life Cycle Analysis (LCA), and Energy Payback Period (EPP). I recently gave a talk called The Problem of Properly Evaluating Intermitt...
Last week’s new high brought us closer to our projection and, as long as we do not see contradictory patterns, another high; and perhaps two more can be expected. Whether it’s one or two may depend on next week’s action. Friday’s minor correction found support where it should have and closed well, but the Globex dipped a couple of points right after the close. If a deeper correction is experienced and, if we go too deep, it will take longer to get back into an uptrend, and with the 20-wk cycle due to bottom in mid-August, what remains of the bullish time frame is getting shorter and shorter. On the other hand, a dip in Globex on Fr...