Archive for Earnings

Microsoft Stock Approaches Key Breakout Point

Microsoft Corporation (MSFT Microsoft Corp  MSFT 74.57 +0.76%​) stock jumped over 1.3% on Wednesday toward its 52-week high at $74.42 per share. Since January, the stock has increased nearly 20% due to strong performance in its cloud-based services. The stock is poised to break out from an ascending triangle pattern, which could send shares significantly higher to fresh 52-week highs.

During the fourth quarter, Microsoft reported revenue that increased 9.1% to $24.7 billion – beating consensus estimates by $430 million – while earnings per share of 98 cents beat consensus estimates by 27 cents per share. The core driver behind the revenue growth was cloud revenue, which increased 11% to $7.4 billion, driven by 97% growth in Azure cloud-based services, which helped offset weaker revenue in other areas. (See also: Microsoft Could Surpass Amazon in Cloud Computing This Year.)

Microsoft shares have soared nearly 20% this year, but traders will be watching these key breakout levels. …read more

Read more here: Microsoft Stock Approaches Key Breakout Point

Category: MSFT

Immunomedics Stock Breaks Out, Consolidation Likely

Immunomedics, Inc. shares have soared more than 40% over the past five sessions after preliminary data from its Phase 2 clinical trial showed a positive treatment effect. Patients that received a weekly dose of labetuzumab govitecan experienced median progression-free survival of between 3.6 months and 4.6 months, depending on the dosages. These figures were better than competing therapeutics that have achieved regulatory approval.

Given the stock’s multi-day run-up, traders could see some profit taking on Tuesday and Wednesday as early traders lock in profits. The good news is that many analysts were bullish on the stock even prior to these new Phase 2 results. For instance, Cowen & Co. analysts indicated that IMMU-132’s biologics license application (BLA) is on track. The analysts expect an update in the second half of the year while maintaining a robust $15.00 price target on Immunomedics stock. (See also: Immunomedics Breaks Out, but Will It Last?)

Immunomedics shares broke out to fresh highs, but some consolidation is likely given the five-day run-up. …read more

Read more here: Immunomedics Stock Breaks Out, Consolidation Likely

Category: IMMU

Biogen Stock Is Ready for a Breakout

A 2.78% percent loss this year for shares of Biogen Inc. (BIIB​) was accompanied by overwhelming institutional selling, thus leading this stock to underperform. But now it looks like the tide may have shifted in favor of institutional buying.

When looking for the strongest candidates for long-term upside, it often pays to look at companies with a history of solid fundamentals and then take advantage of their recently struggling prices.

Biogen, a biotech company in a leading sector with a strengthening technical chart, makes a strong case for bullish investors. For MAP, the strongest indicator of positive price momentum is by measuring potential institutional accumulation. Last month we flagged a potential institutional buy signal in Biogen, which is notable since prior to that signal there were six potential institutional sell signals for the year. We want to see evidence that the tide may be turning in favor of institutional buying when looking for new bullish candidates. In the chart below, Biogen recently shifted away from overwhelming distribution, and may start to see increasing accumulation.

Source: Tradingview.com

MAP’s process focuses on identifying companies with healthy fundamentals accompanied by outsized unusual institutional activity to try and measure potential accumulation/distribution at the single-stock level. By studying these data points we can hypothesize which equities institutions are trafficking in and marry this information with fundamentally sound companies. We want the odds on our side when looking for the highest quality stocks.

Many of the best-performing stocks over the years have exhibited continual institutional support, telling a story of where big firms may see opportunity. A company, like Biogen, which resides in a strong sector, is growing its revenues and growing its earnings, which may keep institutions holding for years to come.

When deciding on the strongest candidate for long-term growth, we consider many technical areas important to success with a few for Biogen being:

  • Recent three-month closing highs achieved ($295.61 on July 26)
  • Three-month outperformance vs. the overall market (+~17.3% vs S&P 500)
  • Three-month outperformance vs. the sector (+~14.5% vs XLV)
  • And most importantly, institutional support

Institutional investors are showing buying signals for Biogen stock. …read more

Read more here: Biogen Stock Is Ready for a Breakout

Category: BIIB

3 Charts for Navigating the Commodities Market

Investor sentiment toward commodities over recent weeks has been mixed due in part to heightened volatility and shifting fundamentals. In this article, we dig into the charts of key funds from different segments of the commodities market to determine the best trade setups heading into September. (For more, see: Commodities: The Portfolio Hedge.)

Commodities Market Performance

One of the most popular exchange-traded funds (ETFs) used by investors for gaining exposure to a diversified basket of commodities is the iShares S&P GSCI Commodity-Indexed Trust . Fundamentally, the holdings span energy, agriculture and metals. Taking a look at the chart, you’ll notice that the 50-day moving average crossed below the 200-day moving average in April, which is known as a death cross (shown by the red circle). This common technical sell signal is usually used by active traders to mark the beginning of a long-term downtrend. This chart is also a textbook-style example of how the price of an asset generally behaves near a major level of resistance such as the 200-day moving average after a major sell signal has been triggered. Traders would expect this resistance to continue over the months ahead and will likely hold a bearish outlook on the general commodities market until the price rises above resistance. (For more, check out: Major Resistance Levels Suggest Commodities Are Headed Lower.)

Energy

With the fund’s overweight position in energy commodities, it is unsurprising that the pattern of GSG closely matches that of the PowerShares DB Energy Fund (DBE). As you can see below, the bearish crossover between the long-term moving averages signaled a significant move lower for those who utliize technical analysis. The bulls have been unable to reclaim the momentum since the retest of resistance in May, and the recent run back toward $12.40 has many technical traders eyeing another move lower. Traders will likely maintain a bearish outlook on energy until the price of the DBE ETF closes above the combined resistance of the descending trendline and the 200-day moving average. (For more, see: 3 Charts That Suggest Commodities Are Headed Lower.)

Gold

From the perspective of an active trader, the most bullish chart in the commodities markets at the moment belongs to gold and gold-related ETFs. Taking a look at the chart of the PowerShares DB Gold Fund (DGL), you can see that the price is trading within the confined range of a rectangle pattern. The defined levels of support and resistance create easy-to-identify levels for order placement. The break above the long-term averages and the subsequent run toward the upper trendline now suggests that the bulls are taking over. After a few more strong closes, it would not be surprising to see a significant move higher. (For further reading, check out: Active Traders Are Turning Bullish on These Commodities.)

 

Major resistance on broad commodities-related funds suggests remaining selective. We look at one commodity that could be worth buying. …read more

Read more here: 3 Charts for Navigating the Commodities Market

Category: GSG, DBE, DGL

Not there yet Janet Yellen: System is safer now, though ‘all-too-familiar’ risks remain

Federal Reserve Chair Janet Yellen, looking back a decade after the onset of the financial crisis, said Friday the financial system is safer now than it was then though some adjustments to regulations may be needed.

The central bank chief spoke at the Fed’s annual conference in Jackson Hole, Wyoming.

Though the speech is closely watched in financial markets, Yellen offered no clues about the future of monetary policy, instead focusing on the history of the crisis and what regulators have done in response. She warned that future crises are inevitable but said the housing meltdown taught valuable lessons.

“The events of the crisis demanded action, needed reforms were implemented, and these reforms have made the system safer,” she said in prepared remarks.

Yellen rejected arguments that regulation had stifled banking activity, insisting that higher capital requirements actually promoted loan growth.

Her review came less than six months before her term ends in February. President Donald Trump has been circumspect about whether he will reappoint her, and Yellen has refused to speculate about her future.

 

Fed watchers had been looking for some level of reflection from Yellenabout the Fed’s response to the crisis, and that was the focus of the speech. She cited the need for the bailout programs put into place in response to a liquidity crush on Wall Street and touted the effectiveness of the new regulations, such as the Dodd-Frank reforms.

However, she said the Fed is continually reviewing the moves to see what’s working and what might be holding back the system.

“A broader set of changes to the new financial regulatory framework may deserve consideration. Such changes include adjustments that may simplify regulations applying to small and medium-sized banks and enhance resolution planning,” she said.

“More broadly, we continue to monitor economic conditions, and to review and conduct research, to better understand the effect of regulatory reforms and possible implications for regulation.”

For instance, she said the Volcker Rule, which limits banks’ ability to trade for their own benefit, may need some “simplifying.” She also said regulations should be examined to make sure they aren’t disproportionately harming community and regional banks.

She cautioned against wholesale changes, particularly when it comes to risk-taking in the financial markets.

“Any adjustments to the regulatory framework should be modest and preserve the increase in resilience at large dealers and banks associated with the reforms put in place in recent years,” she said.

Yellen also was expected to address the current climate and the potential for dangers ahead like the real estate bubble that precipitated the crisis.

Fed officials have expressed varying levels of worry about the continuing climb of risk assets like stocks.

Indeed, Yellen cited the likelihood of “the all-too-familiar risks of excessive optimism, leverage and maturity transformation re-emerging in new ways that require policy responses.” read more

Game Over for GameStop Bullls

GameStop Corp. shares fell more than 12% in the first hour of Friday’s session after the company missed second quarter earnings estimates while reaffirming fiscal year 2018 guidance. This bearish price action cut through at a key level that bulls need to defend in coming days to avoid a steep downtrend from getting worse and dropping the gaming-based brick-and-mortar retailer to the lowest low in more than five years.

New gaming systems have shifted to download and cloud-based media formats in recent years, denying profits from new and used disc-based game sales that have kept the retailer afloat in recent years. Heavy competition from Amazon.com, Inc. and privately held Newegg have also eaten into revenues, while mall foot traffic has contracted due to the ongoing exodus out of brick and mortar onto online sales portals. (See also: How the Video Game Industry Works.)

 

GameStop came public in February 2002, opening at $9.63 and grinding sideways into the May high at $12.15. A decline into the first quarter of 2003 posted an all-time low at $3.75, ahead of a strong recovery wave that reached the post-IPO high at the end of 2004. A breakout into 2005 caught fire, lifting the stock in a powerful trend advance that continued into the 2007 all-time high at $63.77. (For more, see: GameStop: Why It Might Be Game Over.)

The stock built a topping pattern into September 2008 and broke down during the economic collapse, dropping into the mid-teens, where it bottomed out in December. The subsequent recovery wave failed to generate substantial buying interest, stalling at the 50% sell-off retracement​ level and yielding multiple failed breakout attempts into 2012, followed by a steep decline that undercut the 2008 low by nearly two points.

 

…read more

Read more here: Game Over for GameStop Bullls

Category: GME, AMZN, BBY

The pay is too damn low: July Jobs Report Shows Growth, but Wages Stubbornly Stagnant

The July employment report was almost about as good as it gets. The U.S. economy generated 209,000 new jobs, well in excess of the anticipated 180,000. As expected, the unemployment rate fell to 4.3 percent, matching the May low for this cycle. Average hourly earnings have yet to accelerate, but the pace did increase modestly in the month, and the participation rate edged higher. If the Fed does, indeed, intend to shrink its balance sheet starting in September, there was likely nothing in this report that would dissuade it from doing so. And following the report, expectations for a December rate hike increased to 40 percent from the 37 percent the day prior.

The one missing ingredient at this level of unemployment remains the stubborn refusal of wages to increase in a meaningful way. The last time the unemployment rate was close to this low, in 2007, wages were growing between 3.0-3.5 percent on a twelve-month basis. It should be noted, however, that back then core inflation was running between 2.0-2.3 percent as measured by the Personal Consumption Expenditure (PCE) deflator, not the 1.5 percent pace of this past June.

We will see how consumer prices started out the third quarter on Friday with the July Consumer Price Index report. The twelve-month headline rate is expected to edge higher to 1.8 from 1.6 percent in June, while the core rate is expected to be unchanged at 1.7 percent.

As labor continues struggling to participate fully in this recovery, shareholders are the beneficiary. Profit margins remain high, and corporate earnings are exceeding expectations. Second quarter earnings season is now roughly 90 percent complete, and according to Factset, S&P 500 companies in the aggregate are reporting an increase in margins compared to last year.[i] And earnings are likely to grow by 10.1 percent when full second quarter results are in, well ahead of the expected 6.4 percent pace at quarter end. Only the consumer discretionary sector is expected to see a decline.

The third quarter looks less promising. Estimates have been lowered since the end of the second quarter, as expectations for the energy sector in particular have been reduced along with the price of oil. Earnings in the third quarter are now expected to grow by 5.6 percent, down from 7.1 percent on June 30. But it should be noted that third quarter estimates are now lower for all but technology and telecom, which is still expected to suffer a decline, just of somewhat lesser magnitude. Nevertheless, current estimates of 9.5 percent for the full year have remained relatively steady.

Despite the robust July jobs report, bond yields fell for the week. The ten-year note closed at 2.26 percent, down from 2.29 the prior week, although it did bounce off its lows following the jobs report on Friday. The two-year note rose just one basis point on the week to 1.36 percent. The dollar rebounded sharply after the jobs report as well, arresting for the time being its year-long decline. Stocks edged higher, with the S&P 500 adding just 0.2 percent to close just one point shy of the record set the week before. The Dow Jones Industrial Average did manage to set another new record high at week’s end, its eighth consecutive record close.

Congress is in recess until after Labor Day, and with earnings season winding down, equity investors will be grasping about for something to fill the void as we get into the historically-weak months of August and September.

 

…read more

Read more here: July Jobs Report Shows Growth, but Wages Stubbornly Stagnant

More airlines are auctioning off seats

By The Economist online

AS LONG-TIME readers of The Economist can testify, this newspaper likes auctions. For economists, it is the best solution to most problems. It is more elegant than the other two main forms of setting a fee: haggling and menu pricing. The former is inefficient because the seller might not be negotiating with the person prepared to pay the most. The latter will be inefficient unless the seller has exhaustive knowledge of the supply and demand conditions and can quickly adjust his prices accordingly.

Airlines generally take a version of the latter approach. They use dynamic pricing that calculates demand for seats on their planes and updates the fare accordingly. Generally, their algorithms do a pretty good job. Even though the price of the same seat on a flight can vary greatly over the period it is on sale, the average plane is around 80% full.

But more and more are also having a look at auctions, particularly for those looking to upgrade their seats. Some 30 carriers around the world have tried it out. The latest is Singapore Airlines, which has unveiled a new bidding system in which economy-class flyers can bid for a swankier seat in premium economy. Passengers receive an e-mail around a week before the flight asking whether they would like to bid for an upgrade and setting a minimum price. This can then be changed or cancelled any time until 50 hours before the flight, when the “winners” are informed.
Premium-economy seats offer a few marginal benefits over the standard ones, such as more legroom. For this, they cost perhaps $50 more. However, they are not always full. So sometimes airlines will simply shunt a few lucky passengers forward from the very back of the plane. But that is becoming a less common practice. As we have discussed before on this blog, many carriers now prefer to keep those hallowed seats empty, and in full view of the doleful souls who have refused to stump up the extra, pour encourager les autres.

Auctions should alleviate this problem. Assuming it is done efficiently, the issue of empty seats accruing no extra cash should disappear. For those who consider premium economy essential—the long-legged for example—the marginal saving of going through an auction will not be worth the risk of missing out altogether. For those who have always thought that the benefits do not warrant the extra expense, there is a chance to try their luck with a price they do consider to be worth it.…read more

Read more here: More airlines are auctioning off seats

Category: Business and finance, Gulliver

Scrapping fees for checked bags may not shorten America’s nightmarish security queues

By The Economist online
Queues have been growing longer at America’s airports, and things will get worse before they get better. Authorities are expecting exceptionally long security lines this summer, leading airlines to advise passengers to arrive two hours prior to domestic flights. If you think your social media feeds are clogged with complaints about long airport lines now, wait until July.

Two senators think they have a solution. In a letter to 12 American airlines last week, Richard Blumenthal of Connecticut and Edward Markey of Massachusetts, both Democrats, asked the carriers to stop charging fees for checked bags this summer. Their missive begins:

We write in the wake of reports of staggeringly-long lines expected this summer at Transportation Security Administration (TSA) screening checkpoints in airports across the country. We call on airlines to take a smart, common sense step to help thwart this growing problem: stop…

…read more

Read more here: Scrapping fees for checked bags may not shorten America’s nightmarish security queues

Category: Business and finance, Gulliver

5 ways to not blow your unused airline miles

The complex nature of airline loyalty programs has left many consumers who sign up for their co-branded credit cards wanting for more. Not only have airline miles becoming increasingly harder to use these last few years, but award availability can sometimes be scarce. To add insult to injury, new fees and fuel surcharges are heaped onto what used to be “free travel” all the time.

Still, the best airline credit cards continue to offer excellent value for those willing to jump through all of the additional hoops and hurdles. The key to getting the most out of them is understanding how to work the system, and of course, picking the right card to begin with.

If you’re tired of stressing over your unused airline miles, it might be time to try a different card – or simply find a better way to work with what you’ve got. Here are five tips to help you do just that:

Save your airline miles for off-peak travel.

If you feel like award redemptions are overpriced and scarce, take a look at off-peak pricing and you’ll likely change your mind. Where holiday breaks and summer often come with higher prices for flights – even when you’re paying with points – off-peak and off-season travel generally costs a lot less.

Take the American AAdantage program, for example. Where a round-trip MileSAAver flight to Europe from the contiguous United States costs 60,000 miles during summer, it costs just 45,000 miles during their off-peak season, which is October 15th – May 15th.

By saving your airline miles for off-peak travel, you can stretch them a whole lot further and perhaps enjoy better award availability, too.

Consider a flexible travel credit card.

If you’re tired of navigating a single airline loyalty program or want as many options as possible, a flexible travel card might provide the options you want. With a card like the Chase Sapphire Preferred credit card, for example, you can earn points that are transferrable to several airlines including Southwest, United, and British Airways to name a few.

If you don’t wind up finding the availability you need or don’t feel like messing with airline programs at all, you can also use your points to book travel with any airline through the Chase Ultimate Rewards portal. Since the portal works a lot like Expedia.com, you just input your dates and choose the flight that works best for you with no regard for blackout dates or capacity controls.

Sign up for a card with no blackout dates or better availability from your home airport.

Speaking of blackout dates, some airline loyalty programs don’t have them. One that comes to mind specifically is the Southwest Rapid Rewards program.

If you have Southwest miles and find a seat on a plane, it’s yours. This is a huge perk if you need to book several seats on a single flight or don’t have a lot of flexibility in the time or date you fly.
Points earned from …read more

Read more here: 5 ways to not blow your unused airline miles

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