March 4, 2021
What You Need to Know Today:
10-year Treasury yields surge again–touch near 1.50% briefly
At 3:30 p.m. New York time today, March 3, the yield on the 10-year Treasury was 1.47%. That’s up from yesterday’s 1.42%. So much for any thoughts that yesterday’s rally in bonds and drop in yields might be the beginning of a larger move.
Special Reports: Profit and Protect–What you need to know about stock market stages for 2021–my first two hedges (copper and banks) for Stage #2
Hedges that can pay off on the downside and the upside are the most useful and most valuable. They also tend to be relatively rare. There aren’t a lot of these bets floating around in most markets just waiting for you to snap them up. However, I have found two hedges of just this sort in today’s market that I’m going to recommend to you today. (In this post I’m going to give you some of the nitty gritty numbers that support my recommendation for these two hedges. If you want to see some charts for copper and gold, banks and bonds check out the video I posted today.) I’m going to add these new recommendations to my standing Special Reports post tomorrow.
Watch my new YouTube video: 2 Hedges for All Your Market Worries
I’m starting up my videos on JubakAM.com again–this time using YouTube as a platform. The thirteenth YouTube video “2 Hedges for All Your Market Worries” went up today.
Jobs preview from ADP predicts bad news in Friday’s official jobs report for February
Private employers added 117,000 jobs in February, according to today’s National Employment Report from ADP. The ADP report leads into Friday’s Labor Department report on the job market. The Labor Department report will include jobs gains or losses in the public sector that has been hit hard by the pandemic. Economists had projected that the ADP survey would show private payrolls adding 165,000 jobs in February.
10-year Treasury yields surge again–touch near 1.50% briefly
At 3:30 p.m. New York time today, March 3, the yield on the 10-year Treasury was 1.47%. That’s up from yesterday’s 1.42%. So much for any thoughts that yesterday’s rally in bonds and drop in yields might be the beginning of a larger move.
So what’s the matter with Incyte stock? Just about nothing although you wouldn’t know it from the recent price movement
Shares of biotech stock Incyte (INCY) have been down significantly in 2021. For the year to date, as of the close on March 2, the shares were down 8.45%. In the last month they’ve tumbled 12.42%. So what’s wrong? Pretty much nothing. With the individual stock anyway. What we’re watching is a lot of selling in the biotech sector as part of the recent sell-off on risk. And on substantial profit taking.
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 % |
|---|---|---|---|---|
Special Reports: Profit and Protect–What you need to know about stock market stages for 2021–my first two hedges (copper and banks) for Stage #2
Hedges that can pay off on the downside and the upside are the most useful and most valuable. They also tend to be relatively rare. There aren’t a lot of these bets floating around in most markets just waiting for you to snap them up. However, I have found two hedges of just this sort in today’s market that I’m going to recommend to you today. (In this post I’m going to give you some of the nitty gritty numbers that support my recommendation for these two hedges. If you want to see some charts for copper and gold, banks and bonds check out the video I posted today.) I’m going to add these new recommendations to my standing Special Reports post tomorrow.
Watch my new YouTube video: 2 Hedges for All Your Market Worries
I’m starting up my videos on JubakAM.com again–this time using YouTube as a platform. The thirteenth YouTube video “2 Hedges for All Your Market Worries” went up today.
Jobs preview from ADP predicts bad news in Friday’s official jobs report for February
Private employers added 117,000 jobs in February, according to today’s National Employment Report from ADP. The ADP report leads into Friday’s Labor Department report on the job market. The Labor Department report will include jobs gains or losses in the public sector that has been hit hard by the pandemic. Economists had projected that the ADP survey would show private payrolls adding 165,000 jobs in February.
10-year Treasury yields surge again–touch near 1.50% briefly
At 3:30 p.m. New York time today, March 3, the yield on the 10-year Treasury was 1.47%. That’s up from yesterday’s 1.42%. So much for any thoughts that yesterday’s rally in bonds and drop in yields might be the beginning of a larger move.
So what’s the matter with Incyte stock? Just about nothing although you wouldn’t know it from the recent price movement
Shares of biotech stock Incyte (INCY) have been down significantly in 2021. For the year to date, as of the close on March 2, the shares were down 8.45%. In the last month they’ve tumbled 12.42%. So what’s wrong? Pretty much nothing. With the individual stock anyway. What we’re watching is a lot of selling in the biotech sector as part of the recent sell-off on risk. And on substantial profit taking.
Don’t expect too much movement from stocks in the next couple of days–there’s just too much news due on Thursday and Friday
Stocks are neither moving ahead to follow up on yesterday’s big gains. Nor selling off under the wave of profit taking. Given the news calendar on Thursday and Friday that’s about what I’d expect. We’re due for a bushel of potentially market-moving news on those two days. And I’d be surprised if anyone wants to get too far ahead of those announcements.
Bond rally holds; stocks close on strong note
Treasury yields ended the day slightly lower (which means prices were slightly higher) than earlier in the day. The 5-year Treasury note, for example, ended with a yield of 0.69% after trading with a yield of 0.72% earlier in the day. (The low yield for the day was 0.68%.) The yield on the 2-year Treasury finished at 0.12% and the yield on the 10-year closed at 1.42%, up 2 basis points. At 2 p.m. New York time the yield had been 1.45%. With bonds saying “No worries,” many stock indexes edged up by the end of the day.
Keeping Palo Alto Networks with a big boost to my target price
After the close on Monday February 22 Palo Alto Networks (PANW) reported a loss of $1.42 million (or $1.48 a share) on revenue of $1.02 billion million for the company’s fiscal second quarter. Adjusted earnings–which exclude share-based compensation and other items, were $1.53 a share. Revenue grew by 25% year over year. Wall Street had been looking for adjusted earnings of $1.43 a share on revenue of $986 million. Billings for future orders ross to $1.21 billion from $999 in the year ago wearer. Analysts had forecast billings of $1.18 billion. But the shares fell in after hours trading when in its conference call the company forecast adjusted earnings of $1.27 to $1.29 a share on revenue of $1.05 to $1.06 billion for the fiscal third quarter. Analysts were looking for adjusted earnings of $1.29 a share on revenue of $1.05 billion for the fiscal third quarter. For the full fiscal year Palo Alto Networks forecast adjusted earnings of $5.80 to $5.90 a share on revenue of $4.15 billion to $4.2 billion. Wall Street had been looking for $5.79 a share in adjusted earnings on revenue of $4.12 for the year. On the plus side of the ledger there are two reasons that I’m keeping this company in my Jubak Picks Portfolio and my long-term 50 Stocks Portfolio
Stocks bounce back as bond prices take a breather and yields fall slightly
As of 2 p.m. New York Time today, March 1, the Standard & Poor’s 500 was up 2.57% and the Dow Jones Industrial Average was higher by 2.30%. The NASDAQ Composite had climbed 2.80% and the NASDAQ 100 had gained 2.83%. The small cap Russell 2000 had added 3.30% and the iShares 2000 MSCI Emerging Markets ETF (EEM) was up 2.90%. Yep, it didn’t take much of an improvement in the Treasury market to send investors and traders screaming back into stocks.
Last week’s Treasury market action priced in an earlier interest rate move from the Fed
Last week’s bond market plunge and yield increase priced in an earlier move on interest rates by the Federal Reserve. According to Bloomberg, markets now see a Federal Reserve interest rate hike by March 2023. At the beginning of February the bond market had priced in an initial interest rate increase in mid-2023.
Saturday Night Quarterback says (on a Sunday), For the week ahead expect…
The odds are that the bond market will snap back this week as traders decide that the drop in the price of the 10-year Treasury (and the climb in yield) has been too far and too fast. (A drop in Treasury yields would be likely to send stocks higher, reversing the trend of the last week.)I don’t think that reverses the trend beyond a week’s bounce, however. The $1.9 trillion coronavirus stimulus/relief bill still scares the bond market with the possibility of an uptick in inflation (finally) and the possibility that the package migh work and actually put the economy on the path to a sustained recovery. (And why might that be a bad thing, you ask: Because a clearly sustained recovery would incline the Federal Reserve to end, or at least scale back, its monthly purchase of $120 billion in Treasuries and mortgage-backed securities.)On Friday the yield on the 10-year Treasury fell to 1.40% as bond prices rose. That was an 11 basis point drop on the day and it could well be a harbinger of a bounce for Treasuries this coming week.
Special Report: Profit and Protect–What you need to know about stock market stages for 2021–Stage 2 of 3: My rules for selling in the “When you win, you lose market” (and sells of ILMN, CTVA, WST, and VMW)
On to Stage #2 in my Special Report: “Profit and Protect–What you need to know about stock market stages for 2021. And to my rules for the sells and hedges in Stage #2 for 2021: When you win, you lose. (I just posted sells for ILMN, CTVA, WST and VMW)
Not all stock selling is about rising bond yields–for example, Tesla announced genuinely bad news today
Today, February 25, Bloomberg and Reuters reported that Tesla had told its workers that the company could halt some production at its car-assembly plant in California for about two weeks. Staff on a Model 3 production line in Fremont were told their line would be down from February 22 until March 7. Tesla is battling supply-chain issues resulting from backlogs at ports, severe snow storms affecting ground transport, and shortages in some semiconductors used in the its cars.
Buy, sell, repeat–I’m not buying on the dip yet–but I am making a few quick trades to take advantage of the volatility; my trade today in AMAT is an example
I’m very reluctant to go bottom fishing here–since I can’t tell where the bottom might be and the one-day losses are significant here. Tesla (TSLA), for example, was down 8.06% TODAY. That’s $59.80 dollars a share. Teladoc (TDOC) dropped 13.74% or $34.98 a share. Guessing wrong on a bottom could be very expensive here. But I am willing to try a few trades. Nothing fancy. Very short-term. But using stocks with very strong longer-term stories that make me feel good about the longer-term prospects for the stocks. And to believe that there are significant numbers of potential bargain hunters hiding in the bushes. So, for example, I’ve been trading in and out of the Call Options on Applied Materials (AMAT).
10-year Treasury yield hits 1.61%–bond market moves now driving stock prices
Yields on U.S. Treasuries hit 1.61% early today before pulling back slightly to 1.51% as of 3 p.m. New York time. It’s not just the rise in yields or even the magnitude of the increase that has so disconcerted the bond market today, February 25. It’s the speed of the move. As of 3 p.m., the bond market was looking at a 14 basis point increase in yields just today. That’s a huge move for the normally slow-moving bond market.
Watch my new YouTube Video: 5 Picks for the next 6 months
I’m starting up my videos on JubakAM.com again–this time using YouTube as a platform. The twelfth YouTube video “5 Picks for the Next Six Months” went up today.
Xylem is my 10th Special Report: Profit and Protect pick on the climate change trend
I’m making Xylem (XYLEM) the 10th and last pick for Stage 1 in my Special Report on the stock market stages for 2021. The stock fills the final slot in my three picks for the climate change trend. The collapse of the energy delivery system in the deep freeze that killed so many people and disrupted the economy from Texas east to Ohio has received the bulk of the headlines. But the stories about families left without drinking water–or indeed water of any sort–should remind us that climate change is also a water crisis.
Fed’s Powell reassures markets–and reverses much of morning’s selling
Federal Reserve chair Jerome Powell didn’t take all worry off Wall Street’s plate, but he did downsize the portion.
Everything is down this morning! I’m nibbling at these stocks
Yesterday tech tumbled but utilities, commodities like copper and even gold, and many “vaccine recovery” plays gained. Today almost everything is down.
Which to me is a sign that this now 6-day downturn is getting closer to an end. Right now, as of 1:30 a.m. in New York the NASDAQ is off another 2.32%. The brings the drop from the mid-february high to 6%. A little more than half way to a 10% correction. I don’t think we’re at the bottom yet. But I am looking for growth stories–which is not the same as “momentum growth stocks”–where the selling has created an opportunity.
More stock picks today in my Special Report: Profit and Protect–What you need to know about stock market stages for 2021–Part 1 of 3 and the first 9 stock picks for Stage 1 of 2021
I’m working on Part 1–stocks that will let you profit from the continued rally in the first half of 2021 (I know it doesn’t feel like that over the last few days.) I’ve so far posted 9 picks (out of an eventual 10) in three trends for the next few months. I’ll have pick #10 posted this evening.
Jim’s Stock Alerts
Dip-O-Meter
