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Archive for January, 2018

PayPal beats on earnings and revenue, but falls after hours on profit taking

PayPal Holdings (PYPL) reported fourth quarter earnings of 55 cents a share, 3 cents a share above Wall Street estimates, and revenue of $3.71 billion (on a foreign-exchange neutral basis) vs projections for $3.63 billion. Revenue climbed 24% year over year for the quarter. After climbing during the regular session, shares of PayPal fell 4.14% […]

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Fed signals “maybe”on four interest rate hikes in 2018 but stocks stabilize anyway after yesterday’s drop

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Corning drops on accounting loss from tax cut bill

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Autoliv earnings beat and spinoff plans buck today’s market plunge

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SAMPLE POST: Tuesday’s intraday reversal was bad news–and not just for tech stocks

Tuesday looked fine until noon–12:04 p.m. New York time, to be precise. That turned out to be the high for the day–at 2674.62–up 0.62% from the Monday close. It looked like we might even get follow through on Monday’s huge bounce.

And then came the reversal. The index slipped steadily if unspectacularly until by 2:43 p.m. it was down 0.19% for the day.

And then the slip turned into a plunge; the S&P 500 finished at 2612.62, down 1.73% for the day. At that level we’ll start tomorrow, Wednesday, March 28, just 31 points from the low we set n February 8 at 2581.

But the real development of the day was the collapse of stocks in the technology sector. Tech stocks with negative stories such as Facebook (FB), Tesla (TSLA) or Nvidia (NVDA) got hit hardest, dropping 4.9%, 8.22%, and 7.76%, respectively. But nothing in the sector escaped. Netflix (NFLX) was down 6.14%, Amazon (AMZN) 3.78%, Alphabet (GOOG) 4.57%, Microsoft (MSFT) 4.60%, Autodesk (ADSK) 4.40%, Adobe (ADBE) 6.60%) and Apple (AAPL) 2.56%.

It’s that breakdown among the leaders of the technology sector that makes me believe that we’re going to test and then go below the February 8 lows.

You see back when the market set those lows, technology stalwarts such as Amazon and Microsoft supported the market. Sure they took a hit but they were last in and first out.

Take Amazon, for example. The stock didn’t dip until February 7. It then bottomed on February 9 at $1339.60. And then by February 14, Amazon shares had moved above the February 6 high of $1442.84 to set a new high of $1451.05.

That’s hardly a dip, let alone a correction. The 103.24 point drop from February 6 to February 9 is indeed a loss of 7.2%. But that loss lasted only a week. And for a stock that on February 6 was up 23.4% for 2018 to date, a 7.2% drop and then a recovery in a week was hardly enough to dent confidence in the stock, the sector, or the market. I’d argue, in fact, that the quick recovery in Amazon and other technology bellwethers confirmed the market’s belief that the late January/early February drop was going to be a very limited drop and that the market would then resume its course to higher highs.

All of which is why Tuesday’s intraday reversal in technology stocks is potentially so important. If we’re seeing the erosion of not just market leadership from the sector but also market faith in this leadership to bounce back quickly, then I think we’re looking at taking out the February 8 low and moving to something more like a full-fledged and longer lasting correction to the bull market.

At the least we’ve seen a further winnowing of the ranks of the leaders in the sector that have the ability to drag the market as a whole to new highs. Fundamental news from Facebook (the Cambridge Analytical data breach revelations), Tesla (a fatal crash in California) and Nvidia (a decision to suspend self-driving auto tests in the wake of the death of a pedestrian in Arizona) have removed those stocks from the ranks of potential market leaders. It sentiment and selling continues to push the rest of the group and the NASDAQ Composite as a whole toward the February 8 low (at 6777.16 on the NASDAQ Composite vs. 7008.81 on Tuesday), then I think the rest of the market will follow.

Volatility Portfolio up 53% in 2017

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Two big deals for Tencent Holdings support valuation

First, on January 15, China's Tencent Holdings (TCEHY) announced that it would partner with privately-owned Lego to develop a Lego streaming video zone for children on Tencent's video platform and create Lego-branded games for Tencent's gaming network. (Tencent is the world's biggest gaming company. The stock, Asia's most valuable by market capitalization, is a member […]

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The march to a yield of 2.7% on the 10-year Treasury has set off nervous market chatter–and a retreat in stock prices today

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Notes You Need for January 29: AAPL, MCD, savings rate, SQM, TSLA, PYPL, EU trade war,

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Bonds sell off today on fear of end of the week jobs number?

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