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December 5, 2021

What You Need to Know Today:

November jobs numbers the worst of two worlds

On the one hand, the headline numbers in this morning’s jobs report were disappointingly weak. The U.S. economy added just 210,000 workers in November. That was less than half of the median estimate–550,000–in Bloomberg’s survey of economists. So the worry is that the U.S. economy is growing more slowly than expected. Weak growth is generally bad for stocks. But it might have helped the bond market because a weaker U.S. economy might delay plans for the Federal Reserve to raise interest rates.
But on the other, if you looked into the numbers, they seemed just downright odd. And didn’t provide much hope that the Fed would see this data as a reason to hold off on raising interest rates.

read more
DocuSign’s 42% drop on Friday tells us a lot, unfortunately, about the current market

DocuSign’s 42% drop on Friday tells us a lot, unfortunately, about the current market

Shares of DocuSign (DOCU) should have dropped on Friday. After all, almost everything technology was down on the day and the company reported that growth in demand for its electronic document-signing products, which had soared during the Pandemic, had slowed as more workers went back to the office. Earning for the third quarter were 58 cents a share on an adjusted basis. That was above the 46 cents a share expected by Wall Street analysts. However, revenue, including revenue from acquisitions, rose “just” 42% to $545.5 million Analysts were expected revenue of $594 million for the quarter. But a plunge of 42.2%? I’d argue that something else is going on, something that’s related to the market as a whole and not to DocuSign in particular.

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Saturday Night Quarterback says, For the week ahead expect…

Saturday Night Quarterback says, For the week ahead expect…

Expect the the debate to go on. Are we seeing a top for this extraordinary rally? Are stocks headed to their first correction since dinosaurs walked the earth? (Actually stocks had their last 10% correction in February 2020 but almost nobody remembers because it didn’t last very long and soon stocks were on their way to infinity and beyond.) And will this correction be led by technology stocks, the stars of the last rally? Or is the huge and very quick drop in technology stocks and the smaller but still significant fall in a wider index such as the Standard and Poor’s 500 merely a rotation from one sector into another? For the record, as of the close on Friday, December 3, the S&P 500 was down 3.47% from its November 24 high. The NASDAQ Composite, with its heavier weighting in technology, was down 6.05% from its November 11 high.

read more
Trick or Trend: Request from China’s Didi Global to delist in New York hammers U.S.-traded China stocks

Trick or Trend: Request from China’s Didi Global to delist in New York hammers U.S.-traded China stocks

On Friday news that China’s Internet food delivery giant Didi Global (DIDI) planned to delist its shares from the New York Stock Exchange hammered the stock in New York trading. Didi’s ADRs fell 22.24%. And other Chinese stocks with New York listings followed the path downward pioneered by Didi Global. Abibaba (BABA) closed down 8.29%. Tencent Holdings (TCEHY) slid 4.87%. And JD.Com (JD) dropped 7.71%.

read more
November jobs numbers the worst of two worlds

November jobs numbers the worst of two worlds

On the one hand, the headline numbers in this morning’s jobs report were disappointingly weak. The U.S. economy added just 210,000 workers in November. That was less than half of the median estimate–550,000–in Bloomberg’s survey of economists. So the worry is that the U.S. economy is growing more slowly than expected. Weak growth is generally bad for stocks. But it might have helped the bond market because a weaker U.S. economy might delay plans for the Federal Reserve to raise interest rates.
But on the other, if you looked into the numbers, they seemed just downright odd. And didn’t provide much hope that the Fed would see this data as a reason to hold off on raising interest rates.

read more
Special Report: It’s a Market Melt Up!!! Ten stocks to buy; when to sell; and strategies for long term portfolios–today the first 4 picks

Special Report: It’s a Market Melt Up!!! Ten stocks to buy; when to sell; and strategies for long term portfolios–today the first 4 picks

Tolstoy was wrong when he wrote at the beginning of Anna Karenina that “All happy stock markets are alike; each unhappy market is unhappy in its own way.” (That’s what it says in the original Russian, I swear.) Truth is that all happy stock markets are different.
There are the long rallies from valuation bottoms that come after a disaster like the Global Financial Crisis and the Great Recession. There are the sharp quick explosive moves higher that come after the passing of a panic with less damage than expected like that after the Pandemic meltdown in the spring of 2020. And, among all the other happy markets, there are the market melt ups that come after a long bull market has already driven valuations to nose-bleed levels. Sometimes that melt up turns out to be the final blow out stage that comes before a big correction–but not always. And sometimes the melt up just drives stocks to a high where they stagnate while fundamentals catch up with prices. I believe we’re in the midst of a market melt up now. In this Special Report I’m going to outline the ways in which this “happy” market is different; give you advice on how to adapt this rally to your portfolio goals; and finally give you 10 picks for profiting from this melt-up.

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Live Market Report (20 minute delay)

Symbol Name Last Price Jubak's Gain/Loss Jubak's Gain/Loss %
DocuSign’s 42% drop on Friday tells us a lot, unfortunately, about the current market

DocuSign’s 42% drop on Friday tells us a lot, unfortunately, about the current market

Shares of DocuSign (DOCU) should have dropped on Friday. After all, almost everything technology was down on the day and the company reported that growth in demand for its electronic document-signing products, which had soared during the Pandemic, had slowed as more workers went back to the office. Earning for the third quarter were 58 cents a share on an adjusted basis. That was above the 46 cents a share expected by Wall Street analysts. However, revenue, including revenue from acquisitions, rose “just” 42% to $545.5 million Analysts were expected revenue of $594 million for the quarter. But a plunge of 42.2%? I’d argue that something else is going on, something that’s related to the market as a whole and not to DocuSign in particular.

Saturday Night Quarterback says, For the week ahead expect…

Saturday Night Quarterback says, For the week ahead expect…

Expect the the debate to go on. Are we seeing a top for this extraordinary rally? Are stocks headed to their first correction since dinosaurs walked the earth? (Actually stocks had their last 10% correction in February 2020 but almost nobody remembers because it didn’t last very long and soon stocks were on their way to infinity and beyond.) And will this correction be led by technology stocks, the stars of the last rally? Or is the huge and very quick drop in technology stocks and the smaller but still significant fall in a wider index such as the Standard and Poor’s 500 merely a rotation from one sector into another? For the record, as of the close on Friday, December 3, the S&P 500 was down 3.47% from its November 24 high. The NASDAQ Composite, with its heavier weighting in technology, was down 6.05% from its November 11 high.

Trick or Trend: Request from China’s Didi Global to delist in New York hammers U.S.-traded China stocks

Trick or Trend: Request from China’s Didi Global to delist in New York hammers U.S.-traded China stocks

On Friday news that China’s Internet food delivery giant Didi Global (DIDI) planned to delist its shares from the New York Stock Exchange hammered the stock in New York trading. Didi’s ADRs fell 22.24%. And other Chinese stocks with New York listings followed the path downward pioneered by Didi Global. Abibaba (BABA) closed down 8.29%. Tencent Holdings (TCEHY) slid 4.87%. And JD.Com (JD) dropped 7.71%.

November jobs numbers the worst of two worlds

November jobs numbers the worst of two worlds

On the one hand, the headline numbers in this morning’s jobs report were disappointingly weak. The U.S. economy added just 210,000 workers in November. That was less than half of the median estimate–550,000–in Bloomberg’s survey of economists. So the worry is that the U.S. economy is growing more slowly than expected. Weak growth is generally bad for stocks. But it might have helped the bond market because a weaker U.S. economy might delay plans for the Federal Reserve to raise interest rates.
But on the other, if you looked into the numbers, they seemed just downright odd. And didn’t provide much hope that the Fed would see this data as a reason to hold off on raising interest rates.

Congress votes to keep government open–through February 18–now it’s just the debt ceiling to worry about

Congress votes to keep government open–through February 18–now it’s just the debt ceiling to worry about

Yesterday, December 2, the House and Senate both voted to approve a bill to fund the federal government to February 18. So no government shutdown this weekend. (Funding for the federal government was set to expire at midnight tonight.) Republicans in the Senate backed off on plans to delay at vote until after the weekend passed. The new agreement leaves a few items hanging.

This coffee ETN is up 73% in 2021 to date and looks to have more potential ahead

This coffee ETN is up 73% in 2021 to date and looks to have more potential ahead

But 2021 has been very, very good to the iPath B Bloomberg Coffee Total Return ETN (JO). A series of disruptions–weather in Brazil and Colombia, a shortage of shipping containers that curbed exports from Vietnam, a civil war in Ethiopia–sent coffee prices to a 10-year high on November 30. Despite the global Pandemic depressing demand from consumers who didn’t venture out of coffee shops during the worst of the virus outbreak. Now after a 73% gain for 2021 to date the question for investors after the is how much higher can coffee prices and this coffee ETF go?

The trend for the next year or two looks positive.

FTC sues to block Nvidia takeover of ARM

FTC sues to block Nvidia takeover of ARM

Today, December 2, the Federal Trade Commission sued to block Nvidia’s (NVDA) $40 billion acquisition of ARM. “The FTC is suing to block the largest semiconductor chip merger in history to prevent a chip conglomerate from stifling the innovation pipeline for next-generation technologies,” Holly Vedova, director of the commission’s Bureau of Competition, said in the statement.

Be careful out there: This is one insanely volatile market both on the up and down sides

Be careful out there: This is one insanely volatile market both on the up and down sides

Want to know exactly how volatile the stock market is right now? Yesterday investors and traders got news that the first case of the Omicron Variant had been recorded in California. On that, and some “We’ll tighten sooner than expected” remarks from Fed officials, stocks plunged with the Dow Jones Industrial Average showing a 972 point swing from high at 11:25 and 34,994 to the close a 34,022. Today investors and traders got news of a second case–a Minnesota man who had attended an anime conference in New York. And the stock market didn’t just shrug; it rallied big time with the Standard & Poor’s 500 closing up 1.42%, the Dow Industrials u 1.85%, and the small cap Russell 2000 ahead 2.74%.

A stock isn’t a buy just because it’s cheaper than it was–Lessons from Disney on when to buy on the dip

A stock isn’t a buy just because it’s cheaper than it was–Lessons from Disney on when to buy on the dip

After a huge rally like we’re had this year, it’s easy to fall into one of the most common buy on the dip traps. Just because a stock is cheaper than it was, it’s not necessarily a bargain. There’s nothing that says a stock has to return to its previous price after a dip. And especially that it has to return to that former price on your schedule. Let me use Disney (DIS), one of the stocks I’m tracking in my Dip-O-Meter, as an example.

November jobs numbers the worst of two worlds

Friday’s jobs report for November is even more important than usual for stocks

Right now the stock and bond markets can’t decide if the Omicron Variant will crush the global economy badly enough to lead the Federal Reserve to delay its timetable for raising interest rates or if the U.S. economy is so strong and inflation so persistent that Jerome Powell and company will be pushed to accelerate the Fed’s tightening. Which makes Friday’s jobs report for November even more important than usual since it might provide the tipping data to send the Fed’s decision one way or the other. Right now economists at Argus forecast that the economy added 550,000 new jobs in November. That would be an increase from the 531,000 jobs created in October and from the 32,000 created in August.

Danaher is Pick #6 for my Special Report: It’s a Market Melt Up!!!

Danaher is Pick #6 for my Special Report: It’s a Market Melt Up!!!

It’s hard today, November 30, to find any stock with the kind of momentum that I’m looking for in the last month of 2021. Apple (AAPL) looks like a good possibility, which is why I made it Pick #5 in this Special Report and why I added the shares to my Jubak Picks and Volatility portfolios. Danaher’s (DHR) momentum is less obviously–especially on a day like today when the stock has closed don 1.87% to $320.42. But take a step back.

Federal Reserve’s Powell stops calling inflation “transitory” and stocks tank–except for Apple

Federal Reserve’s Powell stops calling inflation “transitory” and stocks tank–except for Apple

Federal Reserve Chair Jerome Powell retired the word “transitory” to describe stubbornly high inflation in testimony today in front of the Senate Banking Committee. And, Powell continued, the Fed might accelerate the pace at which it is winding down its purchase of Treasuries and mortgage-backed assets. “It is appropriate, I think, for us to discuss at our next meeting, which is in a couple of weeks, whether it will be appropriate to wrap up our purchases a few months earlier.” The Fed is currently scheduled to complete its asset-purchase program in mid-2022

Selling Zebra Technologies out of Jubak Picks tomorrow

Selling Zebra Technologies out of Jubak Picks tomorrow

When I bought Zebra Technologies (ZBRA) back on June 28, 2021, I thought the stock was moderately over-valued. But that, like many over-valued stocks with momentum, it would move higher. I set a target price then of $596 a share. Well, moderately over-valued has become more seriously over-valued. Morningstar calculates that the stock traded at a 37% premium before the 2.79% gain today, November 29.

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