Short Term
December 15, 2021 | Daily JAM, Morning Briefing, Short Term |
The saying is that stocks don’t have memories. They don’t know where they once traded and they don’t have any desire to rise or fall to where they once traded. On the other hand, investors do–have memories that is. They do think that stocks will trade back to former levels–when opportunity offers–and it takes a lot of break that conviction. Which is why trading patterns, the ones captured in technical analysis, persist for such long period. And if you needed evidence, just look at how stocks traded after the Federal Reserve’s interest rate pivot yesterday.
December 15, 2021 | Daily JAM, Short Term, Videos, Volatility |
I’m starting up my videos on JubakAM.com again–this time using YouTube as a platform. My eighty-first YouTube video “Why the Fed is bluffing on interest rates” went up today.
December 11, 2021 | Daily JAM, Short Term |
The Federal Reserve’s Open Market Committee meets on Wednesday, December 15, and that the central bank’s interest rate setting say something about the speed at which it will wind down its monthly purchases of Treasuries and mortgage-backed securities. We’re pretty sure, but we don’t know with absolute certainty, that the Fed will announce a speed up of that wind down that would see the process of ending all of the Fed’s monthly purchases a month two early. June, maybe. That could be a big deal because the financial markets are convinced that the Fed would have to end its purchases of Treasuries before beginning any interest rate increase in, say, the last quarter of 2022. I think, but I’m certainly not positive, that the markets won’t show much reaction to the news
December 8, 2021 | Daily JAM, Short Term |
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December 8, 2021 | CHPT, Daily JAM, Morning Briefing, NKTR, Short Term |
With the VIX “fear index” falling back closer to “normal” levels–it dropped to 21.89 yesterday from 31.12 on December 1–it sure feels like the extreme volatility of the end of November and early December is on the ebb. The move to yesterday’s 21.89 close from December 1 was was a surge of 30% in the CBOE S&P 500 Volatility Index in a week. This move away from panic follows on a jump in the “fear index” in the week from November 24 to December 1 of 67% in the opposite direction. I’d be surprised if we don’t see another surge in volatility in the rest of December or in January with what promises to be a crazy earnings season, but even if volatility holds at something like today’s level–slightly elevated from the historical averages but in the rough ballpark–don’t forget that volatility has a long tail. Volatility, in fact, creates volatility. And not least of all in individual stocks.
December 5, 2021 | Daily JAM, Short Term |
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.
December 3, 2021 | Daily JAM, Short Term |
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.
December 1, 2021 | AMAT, ASML, Daily JAM, Short Term |
After yesterday’s selling, we’re getting a bounce today. But, significantly, the bounce in stocks is much less “bouncy” than the Monday bounce from Friday’s plunge.
November 29, 2021 | Daily JAM, Short Term |
Today, Monday November 29, it’s a tale of two bounces from Friday’s big sell off. Technology stocks and especially big technology stocks are up big. At the close in New York Applied Materials was up 5.53%. Adobe (ADBE) was ahead 3.83%. Nvidia (NVDA) was higher by 5.95%. Amazon (AMZN) had gained 1.63%. Apple (AAPL) and Meta Platforms (AKA FB) were 2.19% and 1.47%, respectively. Qualcomm (QCOM) had gained 4.55%. Alphabet (GOOG) was higher by 2.32%. Microsoft (MSFT) had picked up 2.11%. NXP Semiconductors (NXPI) had climbed 5.41%. In most of these stocks today’s gains made up for Friday’s losses–or more. For example, on Friday Applied Materials had dropped 3.84% and NXP Semiconductors was down 3.88%. On the other hand, the “re-opening stocks” that got crushed Friday on fears that the Omicron Covid-19 variant would throw sand in the gears of the global economy showed only minor gains.
November 28, 2021 | Daily JAM, Short Term |
I think that in the coming week the market is likely to reconsider its panic selling of Friday. No guarantees, of course, but that is the most likely path for stocks in the coming week.
November 28, 2021 | Daily JAM, Short Term |
The foreign exchange markets have opened stronger in early trading in Sydney. The U.S. dollar rose modestly against the yen, euro and pound in early trading in Sydney. The currency of South Africa, where the variant was identified, rose as much as 0.9% against the dollar. Leveraged accounts bought the Australian dollar against the U.S. currency and yen on risk-positioning and short-covering. The likelihood at this point on late Sunday afternoon is that we’ll get at least a modest bounce on Monday.
November 21, 2021 | Daily JAM, Short Term |
I’m look for a test of the Friday’s rotation into technology stocks and away from anything that depends on economies remaining relatively free of Pandemic restrictions. On Friday, the winners were technology shares–Apple, Amazon, Tesla, Nvidia, for example–that have in the past been able to show revenue and earnings growth despite any economic slowdown resulting from Covid shutdowns. And the losers were the stocks of companies–such as Six Flags, United Airlines, Macy’s, for example, that depend on the continued recovery in economic activity. The immediate impetus for this sentiment came from news that Austria would impose Pandemic economic lockdowns–again–in an effort to slow soaring rates of infection. The believe is that Germany, the Netherlands, France, and the United Kingdom aren’t far behind. And the fear is that the United States will follow some time this winter. Add that to worries of elevated and rising inflation–where technology companies are seen as one of the few sectors able to outgrow inflation–and you’ve got significant sentiment to push technology shares higher. Logically.
