The bull market is 11 years old on Monday, and it is the longest stretch of non stop gains ever. The sell off over the past 12 trading days means that the US stocks are on the edge of a bear market. Therefore; Tuesday will be a test.
If the market goes below 20%, the bull market will officially be over, and we are entering a bear market. After the Great Recession, the bull market started in March 2009. The S&P 500 has gone straight up since then.
The S&P 500 is up 339% and it has been a slow recovery. It`s similar to the recovery from the Great Depression in June 1932 were the S&P 500 skyrocketed 325%. At that time, it was the deepest recession in modern American history.
President Franklin Roosevelt supported the bull market with massive government spending. Later on, Roosevelt pulled back from the program and the Fed tightened its reserve ratios for banks. The economy didn`t recover as much as it should, and tighter monetary and fiscal policy led to a double-dip recession.
This is why the Fed is important now. So are the Trump administration. The Fed cut the rates 50 points only days ago and they will probably come up with more news about the market even this week.
The Fed offers Repo Market $50 Billion more to ease rate pressure. New York Fed Repo Totals $112,93 Billion and Fed`s move to tap liquidity operations will buy time on more rate cuts.
What they do now is great leadership on the world stage. They can`t stop the virus but they can make liquidity.
To contact the author of this story: Ket Garden at email@example.com
Last trading week was crazy, but the start of this week was even more crazy. Everybody said don`t buy the dip, and now you can clearly see that everybody is doing the opposite. They are buying the dip. But take a look at one of the top stocks I am looking at in times like this.
Target Inc jumped nearly 6% on Monday, while WalMart jumped nearly 8%. Target Inc warned investors that its holiday season was weaker than the company was expecting. Wall Street expects Target Inc to earn $1,66 per share on revenue of $23,47 billion. Last year earnings came to $1,53 per share on revenue of $22, 98 billion.
The consumer is strong and remain the driving force of the U.S economy. Just as important, big-box retail is not dead, as evidence by the strong earnings results and forecasts just delivered from Walmart.
Can Target Inc keep up the pace? Target Inc has been one of the better performers in the retail sector, with its shares up 42% over the past year, thanks to the company`s e-commerce initiatives. But with concers about the coronavirus, Target Inc will need strong top-and bottom-line results, solid growth and upside guidance to keep Wall Street excited about its direction.
Watch out for Target Inc before the open on Tuesday March 3.
Microsoft is expected to report earnings on Wednesday 29, and along with Apple, Amazon and Facebook, their earnings can make or break the stock market. Apple has gone straight up since January last year, followed by the Space X equity Tesla. Rocket-shared both of them.
Now, its time for Microsoft with shares risen nearly 20% since their last report on October last year. That`s more than twice as much as the S&P 500 which is impressive for that tech giant. Wall Street analysts predict that Microsoft will report $35,7 billion of revenue and earnings of $1,32 per share.
Microsoft continue to benefit from their cloud business and in addition they have $20 billion annual buybacks/dividends. This is a major reason why they outperformed the market last year. Office 365 and Azure cloud-computing made the stock a winner and investors sent the stock up over 50% last year.
Consensus revenue estimate would represent 9,8% growth compared to the same quarter a year ago. Windows, search ads, Surface and gaming boosted the company`s revenue with $11,13 billion. Cloud computing service Azure and Windows Server, SQL Server, System Center, GitHub and consulting saw $10,85 billion in revenue.
Research firm CFRA estimates that revenue from cloud-based services hit 50% of total revenue in the company`s fiscal Q4, and investors are postive to Microsoft at the moment. The company changed its strategy and are competetive to Amazon in the cloud sector as well.
The stock declined to $162,28 per share on Tuesday, down -1,67%, but Microsoft is the most valuable U.S company after Apple which is number one on the list. Microsoft`s valuation after the drop on Tuesday is $1,24 trillion, while Apple is valued at $1,35 trillion.
Microsfot signed a military cloud contract with Pentagon worth $10 billion. They won the contract in October last year after a long battle with its competitors like Amazon, Oracle and IBM. Earnings strength is very strong and looks good for future earnings growth.
Microsoft is expected to report earnings on Wednesday 29 after the market close.
The shares of Tesla look more like Space X. The shares has skyrocketed since the summer last year, and the shares is up over 200 percent. It`s a funny story, but what`s even more funny is that Tesla joined the $100 billion club earlier this week. They surpassed Volkswagen.
The $100 billion club is measured by a market cap but if you look at sales or profit you have a different picture. But it isn`t bad to be the second most valuable global carmaker after topping the combined value of Ford and GM. Toyota is still on top with a value of $198 billion.
There is no doubt; the future is green and EV`s like Tesla will outnumber cars with fossile fuels. Musk is planning to build a new plant in Germany and started to sell from a new plant in China earler this month.
VW is still bigger by enterprice value and they will become the official global industry leader by sales for 2019. In a speech, Chief Executive Herbert Diess urged his executives to focus on profit rather than sales.
The EV industry have huge challenges. Battery technology is very expensive. So are R&D and all the factories they are planning build. On top of that you have all the workers. GM`s battle with the United Auto Workers union last fall illustrated how costly the process of winding down factories can be for companies too.
So far, the valuation have been bumpy and it seems like it will remain bumby. We saw a dip on Friday after a wild speculative ride.
Apple is back at CES (Consumer Electronic Show) in Las Vegas for the first time since 1992. But the tech giant isnt`t joining the CES show because it has a new innovative product. Apple is in Las Vegas to talk about Privacy which is a hot topic this year.
Former CEO John Sculley came from Pepsi to Apple and debuted at CES in 1992 with the Newton personal digital assistant. It was a disaster and it didn`t take long before Steve Jobs went back to the job again. I read Sculley`s book and that story is very interesting.
Now, CEO Tim Cook is running the company. And he wants to talk about something very important; Privacy.
Privacy is a fundamental human right. At Apple, it`s also one of our core values, they say on their web site. Your divices are important to so many parts of your life. What you share from those experiences, and who you share it with, should be up to you.
We design Apple products to protect your privacy and give you control over your information. It`s not always easy. But that`s the kind of innovation Apple believe in.
Well, let`s think about it. The phones we have today is called; Smart phones. Oh yeah?! How smart is it to have a smart phone actually? So far, it isnt smart at all. It is the most stupid thing you can have. Is that why they called it smart phone?
We know that people have been hacked, and information and pictures have been stolen and distributed in social media. It is still happening today. Someone can also tap your phone. They can listen to your conversations, and have a look at you on your camera.
The phones they produced in the 80`s and 90`s was much safer, because it was difficult, if not impossible to hack. Nor was it camera on it. Not as good as the phones are today, but much more safer. Until now. Fortunately.
This is what Apple will talk about at CES along with Facebook, Procter and Gamble and officials from the Federal Trade Commission (FTC) to discuss how they can establish privacy protections in terms of size, regulation, and consumer demand.
Tech innovation seems to take much longer time than anticipated and there isn`t so much new innovative products to see at the CES 2020 this time. But in addition to Apple`s talk about privacy, they will be showing off its homekit smart home platform. A smilar product will be launched by competitor Google to add more capabilities to their IoT-powered divices.