Stocks

When in Doubt, Buy Precious Metals

Heightened levels of market volatility in recent months have triggered a flood of uncertainty among fundamental investors and active traders alike. Globally, there is rising interest in hedging against sharp sell-offs, and many are turning to hard commodities such as precious metals. In this article, we take a look at several charts of interest and try to determine how followers of technical analysis will be positioning themselves over the weeks and months ahead. (For more, see: Traders Turn to Precious Metals Among Volatility.) ETFS Physical Precious Metals Basket Shares The recent market-wide pullbacks have led some traders to believe that the selling pressure in some of the precious metals will continue well into the summer. By taking a look at the chart of the ETFS Physical Precious Metals Basket Shares, you can see that the price seems to have reacted to a nearby level of resistance and has started to retrace toward the major support of its 200-day moving average (red line). This is common behavior and shouldn't really come as
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Rusal Extension Could Kill Aluminum’s Rally

Alcoa Corporation shares fell nearly 15% on Monday – its biggest single-day loss in nearly 10 years – after the U.S. government extended the deadline for companies to terminate their relationship with Rusal, the Russian aluminum giant that is under sanctions. The extended deadline means that Rusal will have time to sell off large amounts of aluminum that it had stockpiled following the sanctions, which is likely to negatively affect supply and demand. Aluminum prices fell around 8% on the LME on Monday, while shares of many related companies tumbled in response, including Century Aluminum Company  and Arconic Inc. , which both fell over 5%. Prior to the announcement, many analysts had been bullish on the market. Argus analysts recently noted that Alcoa would benefit from its pricing power amid the tighter market and reduced overall industry production. (See also: Alcoa Stock Breaks Out After Solid Q1.) Aluminum prices fell sharply after the U.S. government extended the
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Verizon Is a Cheap Stock With a 5% Dividend

Telecommunications giant Verizon Communications Inc. is a component of the Dow Jones Industrial Average. This stock is the cheapest among the 30 stocks in the average, with a P/E ratio of just 6.51 and a dividend yield of 5%, making it the leader of the 2018 "Dogs of the Dow." Verizon Wireless is one of the top smartphone platforms in the country. The company is set to report earnings before the open on April 24. Verizon stock closed Friday at $47.90, down 9.5% year to date and in correction territory at 12.5% below its 2018 high of $54.77 set on Jan. 26. The stock set its 2018 low of $46.20 on March 23. The stock is underperforming the Dow 30, which is down 1% year to date and is 8.1% below its all-time high set on Jan. 26. Analysts expect Verizon to post earnings per share of $1.11 when it reports first quarter results on Wednesday. Investors will have a watchful eye
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Stocks Move Lower Amid Rising Risk

The major U.S. indexes moved lower over the past week, with the exception of small-cap stocks posting modest gains. Industrial production rose a better-than-expected 0.5% in March, but jobless claims were slightly less favorable than many economists were expecting, and the risk of an escalating trade war with China continues to weigh on the market. There is also rising political risk as details from Robert Mueller's investigation emerge. International markets were lower over the past week. Japan's Nikkei 225 rose 1.46%; Germany's DAX 30 rose 0.49%; and Britain's FTSE 100 rose 1.49%. In Europe, stocks ended the week higher despite worries about Syria and U.S.-China tension. In Asia, traders remain concerned about a potential trade war between the U.S. and China, although Japan has not announced any counter-tariffs at the moment. (For more, see: Stocks That Could Be Hit by a Trade War With China.) The SPDR S&P 500 ETF  fell 0.13% over the past week. After briefly reaching trendline resistance, the index moved to the pivot point support at $266.61.
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Twitter Stock Jumps After Analyst Upgrades, but Will It Break Out?

Twitter, Inc. shares rose about 1.4% on Friday by mid-day after MKM Partners upgraded the stock to Buy from Neutral with a $40.00 per share price target. Analyst Rob Sanderson was encouraged by the company's growth in users, which increased by double digits for the fifth straight quarter. Sanderson indicated that the company was "here to stay" and still has "mass market potential" that could be bolstered by monetization gains. Earlier this week, Morgan Stanley analysts also upgraded Twitter stock from Underweight to Equal Weight and raised their price target to $29.00 per share. Analyst Brian Nowark suggested that the company's video product continues to perform well in a market where advertisers are constantly seeking higher-quality video impressions. Constructive conversations with advertisers and improved user numbers further bolster the risk/reward case. (See also: Twitter Jumps, Morgan Stanley Upgrades on Ad Sales.) Twitter shares moved higher following a series of analyst upgrades, but traders will be
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3M Company Reports Oversold, Below Key Levels

3M Company is a multi-national technology-based conglomerate providing innovations in raw materials, water, energy, health, safety and education. The company famous for Post-it Notes is involved in many industries, including automotive, manufacturing, mining, and oil & gas. 3M is set to report first quarter earnings before the opening bell on Tuesday, April 24. 3M shares closed Thursday at $218.85, down 7% year to date and in correction territory at 15.8% below its 2018 high of $259.77 set on Jan. 26. The stock set its 2018 low of $209.47 on April 2. 3M is a component of the Dow Jones Industrial Average and is underperforming the average. The Dow 30 is down 0.2% year to date and is 7.3% below its all-time high set on Jan. 26. Analysts expect 3M to post earnings per share of $2.51 when it reports results on Tuesday. This conglomerate beat earnings estimates in each quarter in 2017. 3M is amid divestitures and acquisitions that are expected to reduce expenses. The company should also benefit from a
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American Express Stock Breaks Out to Retest Highs

American Express Company shares rose nearly 6% on Thursday after the company reported better-than-expected first quarter financial results following the bell on Wednesday. Revenue rose 11.6%  to $9.72 billion – beating consensus estimates by $580 million – while earnings per share of $1.86 beat consensus estimates by 15 cents per share. Card member spending rose 12%, while the effective tax rate dropped from 32% to 22%. Analysts responded favorably to the financial results on Thursday morning, which helped send shares higher on the day. Goldman Sachs called the earnings beat the best since the third quarter of 2016, adding that full-year guidance could prove to be conservative. Meanwhile, Wells Fargo analysts noted that the solid credit performance eliminates one of the key points that bears have made and maintained an Outperform rating on American Express shares with a $115 price target. (See also: Why American Express Shares May Jump 14%.) American Express shares moved sharply higher after a strong first quarter, but traders will be closely
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Sir Martin Sorrell leaves WPP in a sorry state

By The Economist online... Not for nothing did the late David Ogilvy, one of the industry's founding patriarchs, reputedly describe him as an “odious little shit” when WPP came after the Ogilvy Group in the late 1980s at the dawn of its decades-long acquisition spree (see chart). But Ogilvy later became WPP's non-executive chairman, and the company turned into the world's largest marketing conglomerate with more than $20bn in annual revenues. In business, Sir Martin charmed as well as cajoled.DURING his spectacular rise from London beancounter to the globe-trotting boss of WPP, the advertising powerhouse he created out of a backstreet wire-basket and trolley company, Sir Martin Sorrell was rarely sentimental. The man who helped turn a ramshackle but chic industry into a global force poached accounts mercilessly and often pitted his own firms against each other in the quest for clients. ...read more Read more here: Sir Martin Sorrell
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Alcoa Stock Breaks Out After Solid Q1

Alcoa Corporation shares rose more than 4% on Wednesday after the company reported better-than-expected first quarter financial results. Revenue rose 16.2% to $3.09 billion – beating consensus estimates by $10 million – while net income of 77 cents per share beat consensus estimates by seven cents per share. In addition to the favorable results, the company raised its guidance for FY 2018 EBITDA to a range of $3.5 billion to $3.7 billion – ahead of its previous outlook. The company believes that there will be a global deficit for both aluminum and alumina. With delays in smelter expansions in China, the global aluminum deficit is projected to grow to 300,000 to 700,000 metric tons, while global aluminum demand is projected to rise 4.25% to 5.25%. Management believes that there will be a deficit of up to 1.1 million metric tons following a balanced market last quarter. (See also: Investing in the Metals Markets.) Alcoa shares broke out to new 52-week highs following Q1 earnings,
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A Victorian survivor in fund management

By The Economist online.... WHEN the Foreign & Colonial Government Trust was launched in 1868, The Economist had its doubts. “The shape is very peculiar,” we worried, adding that “the exact idea upon which it starts has never been used before.” Some of the trust’s promises were “far too sanguine to ever be performed”. Nevertheless, we concluded that: “In our judgment, the idea is very good.” That turned out to be one of this newspaper’s more successful forecasts. One hundred and fifty years later, the trust is still going strong, having delivered a compound annual return of 8.1%. It now looks after a portfolio of £3.5bn ($5bn), rather than the £588,000 it raised at launch. In its own way, the trust is an example of how much the financial sector has changed—and how much it has stayed the same. The idea of a pooled portfolio seems commonplace now, but at the time
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