October 20, 2021
What You Need to Know Today:
If P&G earnings are an accurate indication, the Main Street economy is in trouble
Today, October 19, Procter & Gamble (PG) reported fiscal year first quarter earnings of $1.61 against Wall Street projections of $1.59. (That’s down 1% from the first quarter of the prior fiscal year.) Sales grew to $20.34 billion versus Wall Street expectations of $19.89 billion. Organic revenue growth was 4% against Wall Street expectations for 2.1%. So as the close today of the stock is down 1.18%. And the results today are seen as disappointing. To figure out why, look beyond those top of the report numbers to the squeeze on margins from higher raw materials costs and from rising expenses for shipping.
Buying another VIX “Fear” Option as market puts risk insurance on sale again
Investors and traders are showing no interest in paying to hedge risk in this market–even though we’re again near the all-time high for the Standard & Poor’s 500. Today, as of 3 p.m. New York time the CBOE S&P 500 Volatility Index (VIX) has dropped another 3.31% to 15.77. That puts the index back in my buying range and today I’m adding the December 22 VIX Call Option with a strike price of $18 (VIX211222C00018000) to my Volatility Portfolio.
If P&G earnings are an accurate indication, the Main Street economy is in trouble
Today, October 19, Procter & Gamble (PG) reported fiscal year first quarter earnings of $1.61 against Wall Street projections of $1.59. (That’s down 1% from the first quarter of the prior fiscal year.) Sales grew to $20.34 billion versus Wall Street expectations of $19.89 billion. Organic revenue growth was 4% against Wall Street expectations for 2.1%. So as the close today of the stock is down 1.18%. And the results today are seen as disappointing. To figure out why, look beyond those top of the report numbers to the squeeze on margins from higher raw materials costs and from rising expenses for shipping.
Watch my new YouTube video: “Trend of the Week–Hidden Inflation”
I’m starting up my videos on JubakAM.com again–this time using YouTube as a platform. My sixtieth YouTube video “Trend of the Week: Hidden Inflation”” went up today.
Special Report: 3 Strategies and 10 Best Buy on the Dip Stocks–1st of 3 strategies and first 3 picks
Yes, we want to buy on the dip. Whenever we get a significant dip. (And significant to me is 5% or more in the major indexes–and 10% or more in specific sectors.) But, we need new strategies for buying on the dip that take into account the market’s valuation problem, the central bank tightening that looks to be in the cards, and the real possibility of a dip in growth below forecasts in 2022. I’ve got three strategies to suggest for buying in this market on these dips. And 10 picks to use to execute those strategies.
Watch my new YouTube video: Quick Pick Orsted
I’m starting up my videos on JubakAM.com again–this time using YouTube as a platform. My fifty-ninth YouTube video “QuickPick: Orsted” went up today
Special Report: 3 Strategies and 10 Best Buy on the Dip Stocks–1st of 3 strategies and first 3 picks
Yes, we want to buy on the dip. Whenever we get a significant dip. (And significant to me is 5% or more in the major indexes–and 10% or more in specific sectors.) But, we need new strategies for buying on the dip that take into account the market’s valuation problem, the central bank tightening that looks to be in the cards, and the real possibility of a dip in growth below forecasts in 2022. I’ve got three strategies to suggest for buying in this market on these dips. And 10 picks to use to execute those strategies.
Live Market Report (20 minute delay)
| Symbol | Name | Last Price | Jubak's Gain/Loss | Jubak's Gain/Loss % |
|---|---|---|---|---|
Buying another VIX “Fear” Option as market puts risk insurance on sale again
Investors and traders are showing no interest in paying to hedge risk in this market–even though we’re again near the all-time high for the Standard & Poor’s 500. Today, as of 3 p.m. New York time the CBOE S&P 500 Volatility Index (VIX) has dropped another 3.31% to 15.77. That puts the index back in my buying range and today I’m adding the December 22 VIX Call Option with a strike price of $18 (VIX211222C00018000) to my Volatility Portfolio.
If P&G earnings are an accurate indication, the Main Street economy is in trouble
Today, October 19, Procter & Gamble (PG) reported fiscal year first quarter earnings of $1.61 against Wall Street projections of $1.59. (That’s down 1% from the first quarter of the prior fiscal year.) Sales grew to $20.34 billion versus Wall Street expectations of $19.89 billion. Organic revenue growth was 4% against Wall Street expectations for 2.1%. So as the close today of the stock is down 1.18%. And the results today are seen as disappointing. To figure out why, look beyond those top of the report numbers to the squeeze on margins from higher raw materials costs and from rising expenses for shipping.
Watch my new YouTube video: “Trend of the Week–Hidden Inflation”
I’m starting up my videos on JubakAM.com again–this time using YouTube as a platform. My sixtieth YouTube video “Trend of the Week: Hidden Inflation”” went up today.
Special Report: 3 Strategies and 10 Best Buy on the Dip Stocks–1st of 3 strategies and first 3 picks
Yes, we want to buy on the dip. Whenever we get a significant dip. (And significant to me is 5% or more in the major indexes–and 10% or more in specific sectors.) But, we need new strategies for buying on the dip that take into account the market’s valuation problem, the central bank tightening that looks to be in the cards, and the real possibility of a dip in growth below forecasts in 2022. I’ve got three strategies to suggest for buying in this market on these dips. And 10 picks to use to execute those strategies.
Watch my new YouTube video: Quick Pick Orsted
I’m starting up my videos on JubakAM.com again–this time using YouTube as a platform. My fifty-ninth YouTube video “QuickPick: Orsted” went up today
China’s economy grows at slower than expected 4.9%
China’s economy grew more slowly than expected in the third quarter. Gross domestic product (GDP) expanded 4.9% in the July-September quarter from a year earlier, the national statistics bureau said today, October 18. That’s a big drop from the 7.9% year over year growth in April-June. Economists had projected growth of 5.2% for the quarter.
Trick or Trend: Did the market mis-interpret strong big bank earnings last week?
As we contemplate the extraordinarily strong earnings from Wall Street’s big banks last week, it’s important to remember that Wall Street isn’t Main Street.
Saturday Night Quarterback (on a Saturday, no less) says, For the week ahead expect…
I expect a big tech sector reaction to Apple’s (AAPL) new product event on Monday. This is Apple’s second product event, following on the earlier iPhone 13 presentation. With chip stocks in particular and tech stocks in general–including Apple–looking for a direction–up or down–this event will shape sentiment on the sector–at least for a few days.
Watch my new YouTube video: 3 Picks for Iffy Growth
I’m starting up my videos on JubakAM.com again–this time using YouTube as a platform. My fifty-eighth YouTube video “3 Picks for Iffy Growth” went up today.
Retail sales stronger than expected in September
U.S. retail sales rose by 0.7% in September. That follows an upwardly revised 0.9% gain in August, the Commerce Department reported today. The biggest surprise came in autos. Motor vehicle and parts dealer sales rose 0.5% in September after a 3.3% decline in August. Excluding autos, retail sales advanced 0.8% in September. Economists surveyed by Bloomberg were looking for a 0.2% decline in overall sales and a 0.5% rise excluding autos.
Taiwan Semiconductor beats on earnings, flags continued tight chip supply throughout 2022
Taiwan Semiconductor Manufacturing (TSM), the dominant independent chip manufacturer in the world, reported earnings today, October 14, of $1.08 per share for the September quarter. Wall Street analysts hd expected earnings of $1.04 a share. The stock closed up 2.35% today on the news.
Is the Goldilocks market ready for challenges from the bears?
You can see yesterday’s stock rally and its continuation today as a return of the Goldilocks market. Yesterday, for example, inflation, if you look just at core inflation–that is without food and energy prices–looked strong enough to make the Federal Reserve very cautious about removing monetary stimulus from the economy, but core inflation wasn’t so strong that it sent up warning flares. And today, the drop in initial claims for unemployment to 293,000 (for the week ended October 9) for a new Pandemic low argues that the economy continues to improve but that the economy in general and the job market in particular are neither too hot nor too cold In other words a Goldilocks scenario.
Buy on the dip LIVES! But it’s even more complicated than usual
Need anymore evidence than the stock market action yesterday and today? Yesterday, October 13, with the Standard & Poor’s 500 down for three straight sessions and the index lower by 4.1% from its September 2 high, the market reversed. Suddenly everyone wanted to buy risk again. The most momentum-y of momentum stocks tacked on 4% or more. CrowdStrike gained 7% on the day. Veeva Systems (VEEV) added 4.55%. SentinelOne (S) moved up 7.5%. Even China’s internet giants showed big gains with Tencent Holdings (TCEHY) up 3.62% and Meituan (MPNGF) gaining 4.43%. Today, October 14, investors and traders piled in to pick up the momentum favorites that had been left behind, relatively, in yesterday’s risk-on move. As of 3 p.m. New York time Nvidia (NVDA) up “only” 1.30% yesterday was ahead 3.32% today. Applied Materials (AMAT) u only 1.14% yesterday was up 2.78% today. PayPal (PYPL), which gained just 0.20% yesterday, higher by 4.13% today
In today’s rally everyone loves risk–which isn’t necessarily a good thing
If you look only at the major indexes, today was a mildly positive day. The Standard & Poor’s 500 closed up 0.30%, although the Dow Jones Industrial Average was flat. The NASDAQ Composite gained 0.73% at the close and the NASDAQ 100 added 0.77%. The small cap Russell 2000 ended ahead 0.34%. But take a look at some of the frankly outlandish gains in the market’s hottest sectors. It’s not difficult to find gains of 5% or more today
Price increases are “transitory”? Headline CPI soars at 5.4% rate
Inflation wasn’t so bad in September–as long as you didn’t eat or use any energy. Headline inflation measured by the Consumer Price Index rose 0.4% from August and climbed at a 5.4% year over year rate. Core inflation, which excludes increases in the prices of food and energy on the grounds that they’re “volatile” rose by 0.2% from August.
JPMorgan Chase earnings beat on M&A, tax benefit, reserve releases–but consumer and commercial loans fall
This morning JPMorgan Chase (JPM) reported that earnings for the third quarter beat analyst estimates. Earnings came in at $3.74 a share–if you include one-time items such as a tax benefit and a big release from loan loss reserves. Without those items, earnings for the quarter were $3.03 a share. Wall Street had expected earnings of $3.00 a share. The quarter showed that big U.S. banks still aren’t seeing growth in loan demand. For the quarter consumer loans fell 2% and commercial loans dropped 5%.
Apple reportedly to cut iPhone 13 production targets on chip shortage
Today Bloomberg reported, based on conversations with unnamed sources, that Apple (AAPL) is likely to slash its projected iPhone 13 production targets for 2021 by as many as 10 million units because of prolonger shortages of the chips used in its newest smartphone model.
Watch my new YouTube video: Trend of the Week Cyber Security Stocks
I’m starting up my videos on JubakAM.com again–this time using YouTube as a platform. My fifty-seventh YouTube video “Trend of the Week Cyber Security Stocks” went up today.
It’s already correction time in the chip sector
The Philadelphia Semiconductor Index is now down 8.7% from its September 16 peak. The slump comes as investors and traders sell on fears of supply-chain problems in the sector and especially in the memory chip market. The drop has left the index testing its 200-day moving average, a support level that hasn’t been challenged since May of 2020.
A downgrade here, a downgrade there and we’re looking at a slowdown in global growth
In the last few days both Goldman Sachs and the International Monetary Fund have cut their forecasts for global economic growth. The predictions don’t call for a big slowdown in growth but the trend is definitely downward.
Jim’s Stock Alerts
Dip-O-Meter
