April 17, 2021
What You Need to Know Today:
Surprisingly large drop in new claims for unemployment help S&P, Dow to hit new record highs
Initial claims for unemployment in regular state-run unemployment programs fell to 576,000 last week. Economists had projected 710,000 new claims for the week.

Market response to blow-out bank earning shows somebody is still paying attention to the fundamentals
Blow-out first quarter earnings results from the big banks didn’t produce huge gains this week–and that’s actually reassuring to me because it says a significant number of investors are still paying attention to fundamentals

China reports first quarter GDP growth of 18.3% from first quarter of 2020
China’s Bureau of Statistics reported that the country’s gross domestic product climbed 18.3% in the first quarter from the first quarter of 2020. Economists surveyed by Bloomberg had projected 18.5% year over year growth.

Trifecta for stocks today–yield on the 10-year Treasury drops to 1.58%, another 6 basis points lower
The yield on the 10-year U.S. Treasury fell by 6 basis points to 1.58% today, April 15.

Soaring retail sales add to the day’s gains for stocks
Retail sales rose a stunning 9.8% in March from February’s pace, the Commerce Department reported today, April 15. In the earlier month retail sales fell 2.7%.

Surprisingly large drop in new claims for unemployment help S&P, Dow to hit new record highs
Initial claims for unemployment in regular state-run unemployment programs fell to 576,000 last week. Economists had projected 710,000 new claims for the week.

Special Report: Profit and Protect–What you need to know about stock market stages for 2021–Updated Part 1 and 2 of 3 with my 10 picks to buy now, my first 4 sells, and my first 2 hedges
2021 is shaping up as an especially challenging year for investors. Much, much more challenging than 2020. I don’t think we can count on this rally running uninterrupted through the year. That would be simple, wouldn’t it? We’d all know how to profit from that scenario. And I don’t think the market is about to drop off a cliff from its current record highs. That would be traumatic. But, still, we do know how to protect a portfolio in that scenario. And even how to profit from a prolonged plunge–if we can bring ourselves to place those short and Put Options bets. Instead 2021 is likely to be one of those years with a Rally Stage and then a correction (or “something”) to be followed by a last quarter of 2021 that is, at this moment, close to completely unpredictable. That would make 2021 one of those years that gives investors a chance to be wrong several times over, to botch timing on the upside and the downside, and to let emotions power some really bad investment moves. I don’t pretend that I’ve got this year’s market stages down perfectly–although I think the outlines for the first two stages for 2021 are pretty clear. I don’t imagine that I’ve got the timing for navigating these stages clocked perfectly–although I do think I understand “generally” when the market is likely to switch gears. And that lets me lay out for you a likely pattern for 2021 and to suggest stocks and ETFs to use to navigate this year. Part of the point in getting as specific as I can at this point isn’t that I expect that I’ve got everything right, but to lay out concrete markers that will let you and me adjust portfolios as the year progresses. I’m dividing this Special Report into three parts.
Live Market Report (20 minute delay)
Symbol | Name | Last Price | Jubak's Gain/Loss | Jubak's Gain/Loss % |
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Market response to blow-out bank earning shows somebody is still paying attention to the fundamentals
Blow-out first quarter earnings results from the big banks didn’t produce huge gains this week–and that’s actually reassuring to me because it says a significant number of investors are still paying attention to fundamentals

China reports first quarter GDP growth of 18.3% from first quarter of 2020
China’s Bureau of Statistics reported that the country’s gross domestic product climbed 18.3% in the first quarter from the first quarter of 2020. Economists surveyed by Bloomberg had projected 18.5% year over year growth.

Trifecta for stocks today–yield on the 10-year Treasury drops to 1.58%, another 6 basis points lower
The yield on the 10-year U.S. Treasury fell by 6 basis points to 1.58% today, April 15.

Soaring retail sales add to the day’s gains for stocks
Retail sales rose a stunning 9.8% in March from February’s pace, the Commerce Department reported today, April 15. In the earlier month retail sales fell 2.7%.

Surprisingly large drop in new claims for unemployment help S&P, Dow to hit new record highs
Initial claims for unemployment in regular state-run unemployment programs fell to 576,000 last week. Economists had projected 710,000 new claims for the week.

Watch my new YouTube video: “3 more stock picks for earnings season”
I’m starting up my videos on JubakAM.com again–this time using YouTube as a platform. The nineteenth YouTube video “3 more stock pics for earning season” went up today.

Microsoft buy of Nuance adds fuel to AI stocks
AI stocks–actually any stock with a passing acquaintance to artificial intelligence technologies–stood out on the upside today, April 13, in a generally ho-hum market The Standard & Poor’s 500, let me remind you, rose just 0.33% on the day. But AI stocks–by the most generous definition–scorched higher.,

Microsoft buys Nuance to strengthen AI position
Microsoft (MSFT) will buy speech-recognition pioneer Nuance Communications (NUAN) for $19.6 billion in cash. The move will speed Microsoft’s ambitions in the healthcare digital record keeping market. Microsofts goal is to use voice recognition technology to develop products that feee doctors from note-taking and allows more effective search of those notes for meaningful treatment solutions. The offer at $56 a share was a premium of 23% to the close for Nuance’s shares on Friday, April 9. Microsoft forecasts that the acquisition will result in a loss than 1% hit to earnings in the fiscal year that begins on July 1 and will add to earnings in the following year.

Consumer price inflation rises more than expected but markets go “So What?”
The Consumer Price Index (CPI) rose 0.6% in March from February, the Labor Department reported this morning. Year over year consumer prices are 2.6% higher than they were in March 2020. Economists had projected that the headline CPI would climb 0.5% in March from February and 2.5% year over year. Financial markets shrugged off the numbers.

Nvidia jumps 5.62% today on upgrade to revenue forecast and news of its first microprocessor for servers
Nvidia (NVDA) announced its first microprocessor for the server market today, April 12. Right now Intel (INTC) owns around 90% of the market for server processors. And the company also reported that first-quarter revenue “is tracking” above its previous forecast. Revenue in the quarter ending in April is now expected to be higher than $5.3 the billion, which Nvidia projected on February 24. Nvidia shares were up 5.62% today on the news

Dip-O-Meter update for April 9–time to give “buy on the dip” a rest for a few weeks
Looking at the recent performance numbers on the 20 stocks I’m tracking in my Dip-O-Meter as of the close on Friday April 9, I have to conclude that for most of these stocks it’s time to take a pause on any “buy on the dip” opportunities. What I’m seeing in this sample is a general weakening of the upward bounce on rally days from these stocks–and without a strong bounce on a good day there’s not much reason to buy on the dip.

Hold off on those VIX hedges for a bit–a robust start to earnings season from the big banks this week could send the “fear index” even lower
Over the weekend I posted that I’d be looking at a possible buy of Call Options on the CBOE S&P 500 Volatility Index (VIX) today–depending on how the VIX behaved in the Monday action. Today the VIX regained some of the ground that it gave up last week, closing ahead 1.92% to 1701 after closing at 16.69 on Friday. And I’m going to hold off on buying VIX Call Options until I see the trend in first quarter earnings reports.

Bank lending officers haven’t received the message–they keep restricting credit
This isn’t good news for the prospects for a sustained economic recovery in the United States from the pandemic recession of 2020. The 25 biggest U.S. banks reduced their total loan portfolios by 8% in 2021 through March from the same point in 2020, according to the Federal Reserve’s latest weekly survey.

Trick or Trend: The stock market has a dangerous case of “earnings forecast” hubris right now
Based on existing analyst forecasts for earnings in all of 2021, the S&P 500 trades at almost 24 times estimates, among its highest valuations ever. To bring the multiple down to its long-term average of 16 times annual profits, companies in the gauge will have to make about 15% more than the equity researchers currently expect them to earn — in 2023.

Saturday Night Quarterback says, For the week ahead expect…
The week ahead could well bring even less volatility and even more complacency as we move into what everyone expects to be a stellar earnings season–at least in comparison to the first quarter of 2020

Is your portfolio ready for earnings season?
The big question is how much of the huge year over year earnings growth in the first quarter is already priced into stocks. And how much more of a rally can we expect on expectations for even higher year over year earnings growth in the second quarter.
Show us the jobs, Federal Reserve says, before any interest rate increase
We want to see the job gains before we remove any support for the economy, Federal Reserve Chairman Jerome Powell said at an event at the International Monetary Fund, on Thursday, April 8. Putting another marker in the ground on when the central bank might start to cut back on its schedule to purchase $120 billion a month in Treasuries and mortgage-backed securities–and then to raise its benchmark interest rate, Powell said the Fed wants to see a string of months like March when the economy added 916,000 jobs.

Watch my new YouTube Video “Best Pick for the Big Tech War”
I’m starting up my videos on JubakAM.com again–this time using YouTube as a platform. The eighteenth YouTube video “Best Pick for the Big Tech War” went up today.

New claims for unemployment up again this week
Initial claims for unemployment in regular state programs rose by 16,000 to 744,000 in the week ended April 3, the Labor Department reported today, April 8. This was the second straight weekly increase in new claims. For the prior week, the total new claims figure was revised upward to 728,000. Economists surveyed by Bloomberg had projected that initial claims for the week would fall to 680,000.

My revised Dip-O-Meter as of April 1–to me it looks like this buy on the dip moment is over (but wait for next time)
This buy on the dip moment is over–this week’s revision of my Dip-O-Meter argues to me. The discounts to the February highs are, in general, getting smaller. And in many cases the size of the bounce that I’m seeing on up days is decreasing too.