Joel Elconin – Benzinga Pre-Market Prep Show – Tue 14 May, 2019

Bitcoin Bouncing, Trumps Tweets Driving The Markets, IPO Comparisons, and A Lawsuit Against Apple

There’s a lot to cover today with Joel Elconin, Co-Host of the Benzinga Pre-Market Prep Show. We start off with the bounce in Bitcoin and address the comments that Bitcoin is the new preferred safe haven asset. Up next are some comments on Trump’s tweets and how they continue to dominate the short term market moves. Finally we end recapping some of the moves in the recent Uber and Beyond Meat IPOs.

Click here to learn more about the Benzinga Trading Summit in New York on June 20th. Or email Joel at joel@benzinga.com.

Joel Elconin – Benzinga Pre-Market Prep Show – Tue 30 Apr, 2019

Recapping Earnings From Amazon and Google and The Run So Far This Year In The Broad Averages

Joel Elconin, Co-host of the Benzinga Pre-Market Prep Show joins me today to recap the recent earnings released out of Google and Amazon. Google’s earnings miss has gaped the stock down 7% while Amazon’s good earnings are supporting the recent move higher (while not back to all-time highs). We also look ahead to Apple’s earnings and comment on the overall health of the US markets considering the almost 15% move so far year to date.

Click here to find out more about the Benzinga Trading Summit in New York on June 20th.

Joel Elconin – Benzing Pre-Market Show – Tue 26 Mar, 2019

Recapping The major News and Events For The Markets

Joel Elconin, Co-Host of the Benzinga Pre-Market Show joins me today to outline the key stories and events for the markets. We discuss the Fed statement last week and following moves in the bond market. Also the rotation back into the FAANG stocks and the set up for gold is addressed.

Click here to visit the Benzinga Pre-Market Show website.

3 Market Myths Debunked

This post 3 Market Myths Debunked appeared first on Daily Reckoning.

This weekend, the stock market bull turned 10 years old, handing investors more than 17% in annualized total returns along the way.

According to my old S&P coworker, Howard Silverblatt, that performance is more than three times better than the annualized return from the end of 1999 (5.43%) and almost twice as good as the return since 1989 (9.64%).

Of course, plenty of people stayed on the sidelines and lots of experts encouraged them to do so.

This is pretty common.

When shares of U.S. companies are going up, they say stocks are getting too expensive.

When the market is falling, they say it’s too dangerous to jump in because more downside is certain.

And when stocks are going sideways, they repeatedly say the action proves investing in U.S. shares is an outdated strategy.

This kind of hyperbole makes for interesting reading, but it can also end up dooming your nest egg to a life of anemic gains. Or worse, repeated losses.

So today, I want to talk about three major market myths that continually float around out there…

Myth 1:Buying and Holding Good Stocks Doesn’t Work

Market watchers have loved saying “buy and hold” approaches don’t work for as long as stocks have been trading.

Traditionally, you would hear this from stock brokers who stood to make a lot more in commissions by encouraging their clients to trade in and out of positions. But even in today’s world of low-cost brokerage accounts, there are still plenty of experts telling investors that long-term investing is a stupid move.

I agree that a buy-and-hold approach isn’t ideal for some investors and there are plenty of active trading strategies that work well.

However, the idea that you can’t make very good money by sticking with big companies and holding them for years on end is patently false… especially if their stocks pay nice dividends.

Here’s an illustration that will probably surprise you…

The top three contributors to the S&P 500’s performance during this bull market have been Apple, Microsoft, and JPMorgan.

No real surprises there.

But in fourth place? General Electric.   

Yes, the same General Electric that has been absolutely decimated in recent times!

Despite all that pain, the fact that the stock was even lower in the throes of the Great Recession – along with all the dividends it paid along the way – still manage to put its total return toward the very top of the list.

So you can make LOTS of money by simply buying solid dividend payers at fair prices and then doing nothing more for years at a time.   

Of course, a lot of folks will say it’s impossible to find good values now that the market has run up so much over the last ten years.

Myth 2: Buying Stocks Right Now Is a Sucker’s Move

The chorus of stock market naysayers grows with every new all-time high in the S&P 500. And to be sure, we are no longer seeing a huge smorgasbord of undervalued companies out there.

At the same time, you CAN still find good bargains. In fact, some of my favorite blue chip names have actually been going down even as hot names continue to rise on hype.

What you have to remember is that generalizations like “stocks are now overvalued” don’t tell the full story. There are many thousands of individual companies trading out there – each of which needs to be evaluated on a case-by-case basis.

Just because the market is sitting at some particular P/E ratio doesn’t mean there isn’t a small tech firm experiencing tremendous growth or a large retailer being unfairly punished because of its latest earnings report.

In addition, there are plenty of ways to play stocks more aggressively or profit from short-term swings.

The key is determining your goals and then sticking with the plan you’ve made.

Which brings me to one last major market myth…

Myth 3: You Can’t Make Money If Stocks Aren’t Moving Up

Nothing could be further from the truth.

As I’ve already explained a million times, you can easily collect solid dividend checks month in and month out no matter what the underlying stock is doing (or not doing).

In addition, the market is always moving at least a little bit every day. So you can also use advanced timing tools to play the many peaks and valleys that occur within a longer period of sideways action.

Plus, there are two more ways to make money from stocks during sideways – or even down – markets:

For starters, you can sell options to generate additional income from stocks you already own or even on stocks you’d like to own.   

You can also aim to profit as individual stocks – or the broad market – falls. And you can do this by buying put options… short selling… or simply using inverse exchange-traded funds (ETFs).

So the bottom line is that there are countless ways to make money from the stock market, especially if you choose to employ a combination of the ideas I touched on in today’s article.

Really, the only bad approach is letting others scare you away from one opportunity after another.

To a richer life,

Nilus Mattive

— Nilus Mattive
Editor, The Rich Life Roadmap

The post 3 Market Myths Debunked appeared first on Daily Reckoning.

Shocking Evidence: The Market is Rigged! But Here’s Why Things Aren’t as Bad as You Think!

This post Shocking Evidence: The Market is Rigged! But Here’s Why Things Aren’t as Bad as You Think! appeared first on Daily Reckoning.

“FORE!!!”

My friend Chris had just hit another golf ball out of bounds. Only this time, it sailed into the adjacent fairway and nearly took the head off some guy lining up his pitch shot.

Chris was NOT a good golfer. In fact, he was undeniably the worst player in our group last spring.

And yet, despite hitting every other shot off-course, Chris still managed to beat me, my brothers, and our other friends at our informal golf tournament.

How did he do it?

It all ties back to a handicapping system that gave Chris an unfair advantage.

Fortunately for you, there’s a similar system in the market right now, setting up some big gains for investors who are paying attention.

Let me explain…

Leveling the Playing Field with a Weak Handicap

Chris was able to win the tournament because his golf “handicap” gave him a number of free strokes. If you’re familiar with the handicapping system, you know that scores from previous rounds are added up to reach an appropriate number of free strokes.

The only problem is, people can intentionally write down poor scores ahead of a tournament, to set the bar low. Then, with more free strokes, it’s easier to beat the competition. Most players call this “sandbagging” and it’s definitely an unfair way to win.

I’m not saying that’s what Chris did. But you never know!

Chris’ victory comes to mind as I look through first quarter earnings that have been driving stock prices for the past few weeks.

You see, corporate executives have been sandbagging in their own special way, telling investors to expect weaker earnings through the rest of the year. But if you look carefully at what’s going on behind the scenes, a different story emerges.

As report for fourth quarter earnings roll in, the average S&P 500 company has increased profits by about 28%. That’s a healthy rate of growth, and a big part of the reason stocks have been trading higher this year.

But there’s one problem with earnings season this month. Executives have been telling investors to expect weaker profits for the rest of the year. According to Bespoke Investment Group, the guidance numbers for this quarter are some of the weakest over the last 15+ years!

What’s driving this poor outlook?

Well, corporate executives have a number of concerns that are causing them to be more cautious when telling investors what to expect.

For starters, last year’s profits grew sharply because of the recent corporate tax cut. This year, companies will still enjoy lower tax rates, but they’re not going to change from last year. So we won’t get the same kind of growth seen in 2018.

Second, the government shutdown has been a big issue as these executives put together their talking points. With so much uncertainty (and potential fallout with millions of Americans missing paychecks), it makes sense for companies to be a little cautious moving forward.

Finally, the trade war with China may be on hold, but it’s not solved yet. We’re still waiting to see whether the U.S. and China will be able to hammer out a deal. And that deal could have an impact on how different companies generate profits this year.

Add it all up, and you can see why executives are managing investor expectations. They certainly don’t want to wind up with a weak report later in the year that misses expectations and sends their company’s stock plummeting.

The Evidence Says Something Different

While I don’t necessarily blame managers for being cautious with their guidance, the evidence that I’m seeing right now points to a much stronger environment for stocks this year.

For instance, sales growth has been rising at the fastest level in several years. Keep in mind, sales numbers aren’t directly affected by the corporate tax cuts. So this gives us a more accurate picture of how the economy is growing and how consumers are spending money.

And that picture is very strong!

Corporate spending is also picking up.

Recent reports from the mighty Facebook, Amazon, Netflix and Google corporations have been increasing capital expenditures to grow their businesses.

And this year, that spending will continue to grow.

Google’s chief financial officer Ruth Porat noted that the company will undergo an uptick in purchases of servers and other equipment. Facebook will spend an extra $4 billion to $6 billion more than last year’s $14 billion on growth opportunities. And Amazon will be spending more this year to build out its AWS cloud service business.

All of this spending will help companies that supply key products and services for growth projects. And these suppliers will need to hire workers driving strong employment, healthy consumer spending, and overall economic growth.

In other words, despite the cautious guidance from corporations this year, the overall economy is strong and profits should continue to grow.

That leaves us with an interesting situation…

The Bar is Low, So the Future is Bright

With corporations encouraging caution, and the economy exuding strength, something’s gotta give this year.

Think about what is going to happen in the second and third quarters when companies continue to grow profits and the economy keeps on trucking. What about when a new government spending bill is reached? Or what happens if we reach an agreement with China?

At this point, investor expectations are fairly low. Much like our expectations for my friend Chris’ golf game.

With the bar set so low, it won’t take much for companies to perform better than expectations.

Investors with cash on the sidelines will scramble to get more of their capital in play.

And as their buy orders hit the market, stocks will naturally rise.

Of course, here at The Daily Edge, we’ll continue to highlight the stocks with the biggest chance of beating investor expectations and trading sharply higher. But you need to make sure you’re locking in your investments ahead of time, before prices start moving higher.

Don’t be misled by the sandbagging corporate executives!

Here’s to growing and protecting your wealth!

Zach Scheidt

Zach Scheidt
Editor, The Daily Edge
TwitterFacebook ❘ Email

The post Shocking Evidence: The Market is Rigged! But Here’s Why Things Aren’t as Bad as You Think! appeared first on Daily Reckoning.

Exclusive KE Report Commentary – Wed 6 Feb, 2019

Insights Into Apple, GameStop, and The Retail Sector

Allison Ostrander, Director of Risk Tolerance at Simpler Trading shares her insights in the the charts of Apple and Gamestop. We also discuss the short positions that entered Apple before the recent earnings report. These shorts are a large contributor to helping drive the stock higher right now. These stocks also tie into the broader retail sector.

Click here to visit the Simpler Trading website to follow along with Allison.

URGENT: Claim Your Share of this $940 Billion in Cash

This post URGENT: Claim Your Share of this $940 Billion in Cash appeared first on Daily Reckoning.

I’ve got an urgent announcement for you today.

One that will help you claim your fair share of a $940 billion pile of cash scheduled to be paid to Americans.

No, this has nothing to do with Trump’s State of the Union Address last night.

In fact, this cash isn’t tied to Washington at all! (Except for the fact that much of this cash was freed up because of legislation passed in late 2017).

This cash is real U.S. currency, being transferred to real citizens like you and me. In fact, you can tap into these cash payments even if you’re not a U.S. citizen and even if you’re not living in the states!

The only issue is that you have to act quickly before this cash is doled out to someone else.

So I’m hoping that today, you’ll pay close attention to this alert and make sure you position yourself to claim your portion of this monumental amount of cash being distributed this year.

Could You Use $2,864.42?

There are an estimated 328,164,639 people living in America as I write to you.1 By the time you read this alert, the number will certainly be higher.

I pulled up the U.S. population because I wanted to see how far the $940 billion in cash would go.

It turns out, if everyone shared the cash equally, the total amount paid to each person would be $2,864.42. So almost $3k to every man, woman and child in the country.

Unfortunately, the payments won’t be sent out equally to everyone. Because the majority of Americans have no idea these cash payments have even been scheduled. (And this is good news for you, because with fewer people claiming their share of the payments, your portion of the cash could be even bigger.)

So where is this cash coming from?

It’s currently sitting squarely in the bank accounts of corporations across America.

But it’s not going to stay there. Because shareholders are increasingly demanding that companies return this cash to its rightful owners. The investors in each individual company.

That’s you and me!

But if you want to be one of the millions of investors who participate in this cash give-back program, you have to know where to be invested.

A Record Cash Commitment

This year, companies in the S&P 500 are expected to spend a record $3 trillion in cash.

The cash is currently being held on company balance sheets due in a large part to a lower tax rate for corporations, and a special incentive for companies with international operations to bring cash back to the United States.

The majority of this cash is being spent on business initiatives. Things like new facilities, hiring more workers, and paying larger wages. These payments certainly help our economy and have been a big contributor to the healthy job market.

But much of this cash is being paid back to investors through share buyback programs. And this year, companies will spend a record $940 billion on these programs.

spending buybacks chart

So how does a share buyback program put cash in your wallet?

When a company uses its cash to buy back shares, the number of outstanding shares held by other investors decreases. The shares being bought by the company are retired and they basically no longer exist.

Moving forward, when the company earns a profit from its normal business, the profit can now be split between fewer shares. So each share will now receive a larger portion of the profits.

This makes each share more valuable, because each share represents a bigger piece of the company (and a bigger piece of the total profits).

Plus, when a company is buying back its shares, the buying pressure naturally pushes the stock price higher.

So short-term traders benefit when companies buy back shares simply because the stock trades higher.

And long-term investors benefit because they own a larger piece of the company, and thus a larger portion of the company’s profits.

Don’t forget that when a company buys back shares, dividends are still paid to investors. Only now, there are fewer shares over which a company must divide its cash set aside for dividends. So in this environment, dividends naturally increase, giving you even more income!

I’m excited about the $940 billion in buybacks and the hundreds of billions to be spent on dividends as well!

The key to collecting your share of this cash being spent is to invest in the companies with the biggest cash balances who have announced large share buyback programs and dividend hikes.

One of my favorite stocks in this category is Apple Inc. (AAPL).

The company generates more than $23 billion in cash each year, and currently holds more than $230 billion. Apple is actively buying back shares of stock, and spent $62.9 billion on shares in the second half of last year.

With shares trending lower in the fourth quarter, we’ve got an excellent opportunity to buy the stock at a discount. Meanwhile, the company’s own buyback program will be more effective as Apple can now retire more shares for every billion dollars in cash spent.

Apple, and plenty of other cash-rich corporations are giving you an excellent opportunity to collect from the $940 billion in buybacks this year. But don’t wait until this cash is spent before you tap into this opportunity!

Here’s to growing and protecting your wealth!

Zach Scheidt

Zach Scheidt
Editor, The Daily Edge
TwitterFacebook ❘ Email

1 Worldometers – U.S. Population

The post URGENT: Claim Your Share of this $940 Billion in Cash appeared first on Daily Reckoning.

Volatility Holds the Key to Markets in 2019

This post Volatility Holds the Key to Markets in 2019 appeared first on Daily Reckoning.

Over the last two weeks, after making good on the four-rate interest hike of 2018, Fed Chairman, Jerome Powell, became more dovish to start 2019.

His change in tone is worth considering because of his historical stance on reducing the amount of artificial stimulus coming from the Fed. Last week, after the required five-year holding period for Fed transcripts were up, we got a glimpse into Powell’s thoughts from 2013, before he was Chairman.

Powell tried to persuade then-Chairman, Ben Bernanke, to reduce the Fed’s stimulus, even though it would lead to greater near-term market volatility. That was when the third round of the Fed’s asset-buying program (QE3) was in full swing. The Fed was purchasing an estimated $85 billion per month mix of Treasuries and mortgage-backed securities.

To indicate that the Fed wouldn’t buy bonds forever, Bernanke floated the idea of slowing down its program, or “tapering,” at some non-defined future date.

Powell, on the other hand, believed the market needed a specific “road map” of the Fed’s intentions. He said that he wasn’t “concerned about a little bit of volatility” though he was “concerned that there may be more than that here.”

Indeed, once Bernanke publicly announced the possibility of the Fed’s bond-buying program slowing down, the market tanked, in a response that became known as a “taper tantrum.” As a result, Bernanke backed off the tapering idea.

Fear of more taper tantrums kept the Fed in check after that. The Fed ultimately waited until it had raised rates sufficiently, before starting to cut the size of its balance sheet. But now Powell is the Chairman. And it seems that he is much less comfortable with volatility than he was under Bernanke, as his most recent remarks indicate.

But it certainly wouldn’t be the first time a Fed chairman has modified his views when he was in control. Alan Greenspan, for example, was a staunch advocate of the gold standard when he was younger (and as presented in Foreign Affairs). But once he was Fed head, suddenly he thought a gold standard wasn’t such a hot idea after all. Go figure.

In the case of Jerome Powell, his new sensitivity to volatility means the Fed will be watching the markets for high volatility that causes sell-offs, even if also espousing their “data driven” mentality. And that he is prepared to act should that happen by backing off the Fed’s current forecast for reducing its balance sheet.

I’ve argued before that the Fed isn’t reducing its balance sheet as aggressively as it would have you believe. And I certainly expect it to dial back even more so in light of the recent volatility.

The reason is obvious.

The main catalyst for the bull market that surfaced over the past 10 years since the financial crisis in 2008 was stimulus that was fueled by the Fed and other leading central banks. This money acted as an artificial stimulant or “drug” to financial asset prices.

The world’s leading central banks have been following the Fed’s lead in withdrawing liquidity. And even though global liquidity really began drying up late last year to a minimal degree relative to its size, it should come as no surprise that markets have threw a tantrum.

Since early October, we’ve seen a lot of price volatility, with several hundred-point daily swings in the markets becoming the norm. Powell calmed the waters with his dovish comments on January 4 and the following week as well. But make no mistake, the waters are still choppy.

Many on Wall Street expect to see more volatility ahead and are forecasting that 2019 will be rocky for the stock market. But others on Wall Street are, in direct contrast, forecasting a continued bull market.

That’s the other driver of volatility — clashing opinions and wildly divergent market forecasts. We haven’t had much volatility in recent years because nearly everyone was on the same side of the bet. That’s all changed now.

To add to the market turmoil, the federal government shutdown has now officially entered its fourth week. It is now the longest shutdown on record. But the shutdown also has real economic ramifications outside of the DC beltway.

First, in a climate where the expansion of business activity is already slowing down, the shutdown is causing economists to further lower first-quarter GDP estimates. That puts a lid on expansion and hiring plans for both psychological and actual risk reasons.

More than 800,000 federal workers have missed paychecks, which means less money to pay bills and purchase goods and services that contribute to the American economy. But that’s not the only problem, although it might seem far more important, especially to those missing paychecks.

From an information standpoint, the state of the economy is tough to predict without data produced by agencies like the Department of Commerce. For instance, farmers, already hurting from trade wars, won’t be able to get key data on figures like monthly international shipments to plan crop schedules.

Then there’s the Federal Reserve itself. Whether you think it should or not be setting interest rates at all, the Fed determines interest rates while considering factors such as market volatility, slowing economic figures and trade wars. The best way to do that is to access real data. Now, business conditions will be hard to gauge accurately if reports aren’t available due to the shutdown.

That means the shutdown will stoke volatility in the markets until an agreement is reached. And when that will be is anybody’s guess right now. No real progress has been made and there doesn’t appear to be an end in sight.

But this week, the markets will be getting new information to digest. The release of fourth-quarter earnings reports will begin with big banks. These will provide more insight into how companies performed during the year-end volatility in 2018.

The corporate earnings outlook on Wall Street is fairly negative. Companies have been managing expectations downward. Apple, for instance, chopped its forecasted revenue figures last month, citing the slowdown in China’s economic growth as a reason for less iPhone sales. Apple stock lost about 10% on the day of the announcement, taking the overall market down with it.

Analysts are now estimating fourth quarter profit growth of 14.5% for the S&P 500 companies. That’s down from the 20.1% they forecast at the start of the quarter. But that could actually be a good thing for share prices.

The lower the bar, the greater the possibility it can be exceeded. There’s more upside potential in that case, in other words. That means if earnings begin to outperform prior forecasts next week, it could very well lift the markets. This tension of negative and positives factors will foster a see-saw of a quarter in the markets mixed with volatility, so being aware and nimble will be the best strategy.

But the volatility could present a great trading opportunity. Wall Street knows that it doesn’t matter if information is positive or negative — there are still ways to profit from the right information.

Something called the Cboe Volatility Index (VIX) is widely considered a “fear gauge.” That’s because it’s supposed to reflect what swings in the S&P 500 index could be over the next month.

The VIX computes its levels based on outstanding options contracts which are supposed to indicate the price that investors, or speculators, are willing to pay for protection against their positions going bad.

Currently, the VIX should be higher than it is. It recently spiked, but then settled down much lower than what the real volatility of the S&P has been this past month.

Usually, options tend to over-price volatility. That’s because people buy options in order to place bets on the future, or to protect themselves from wild swings in share prices. The less certain they are, the more they are willing to pay for that protection.

Yet, right now, the cost of protection is cheap. That’s like your health insurance premium all of a sudden dropping just when you catch a major illness. It doesn’t quite make sense.

That means that while fourth-quarter earnings season reports are emerging, it’s a good time to take advantage of buying these cheap options. Buying them on certain companies can protect you against adverse swings in share prices due to earnings announcements. It’s a form of portfolio insurance. And again, it’s relatively cheap.

That’s one pivotal key to being a great investor — accessing information. Sure, the more insights and information you have, the more overwhelming it can seem. However, if you can stay focused, your portfolio will thank you.

Regards,

Nomi Prins
for The Daily Reckoning

The post Volatility Holds the Key to Markets in 2019 appeared first on Daily Reckoning.

Could Apple Buy a Third of the World’s Gold?

February 27, 2015 By Frank Holmes CEO and Chief Investment Officer U.S. Global Investors Is there anything Apple can’t do? First it revolutionized the personal computing business. Then, with the launch of the iPod in 2001, it forced the music industry to change its tune. Against initial market reservations, the company succeeded at making Star Trek-like tablets hip when it released the iPad in 2010. And in Q1 2015, a record 75 million units of its now-ubiquitous iPhone were sold around the globe. The smartphone’s operating system, iOS, currently controls a jaw-dropping 89-percent share of all systems worldwide, pushing the second-place OS, Google’s Android, down to 11 percent from 30 percent just a year ago. As you might already know, the company that Steve Jobs built—which we own in our All American Equity Fund (GBTFX) and Holmes Macro Trends Fund (MEGAX)—is history’s largest by net capitalization. In its last quarterly report, Apple posted a record … Continue reading