Short Term
May 3, 2024 | AAPL, Daily JAM, NVDA, Short Term, Videos |
Today’s video is Go Away in May? Historically, the months between November and May were much more profitable than the months from May to November. The saying “Go away in May” came from that distribution of returns, suggesting investors should get out of the market during the less profitiable May to November period. This advice holds particularly true for tech stocks, which have very clear seasonal revenue patterns. For example, in March of 2023, Apple (AAPL) earned $1.52 per share, in June earnings per share went down to $1.26, in September they went back up to $1.46 and then the company blew it out in December to $2.18. While this isn’t indicative of the entire tech sector, it’s a good example of this seasonal pattern, especially for technology stocks with big consumer businesses. So what about this May? I’d say, you can probably “go away”–but maybe a little late than usual. NVIDIA’s (NVDA) earnings come out on the 22nd of May and will likely be giant. Current Wall Street estimates have earnngs per share at $5.14, up from $.88 a year ago. After that,the technology sector is relatively quiet. The next big tech event to look out for is Apple’s Worldwide Developers Conference in June, which could result in “buzzy” tech announcements about AI. After that, I don’t see a lot of reason to be overweight technology and I’ll look to take some profits. I think this amounts to a modest Go Away in May call.
May 2, 2024 | Daily JAM, Morning Briefing, Short Term |
On Wednesday, May 1, the Federal Reserve decided NOT to cut interest rates at its May 1 meeting. That was the decision expected by the financial markets. And Federal Reserve chair Jerome Powell tried his best to keep traders from speculating that the Fed would actually raise interest rates, rather than cut them, in the remainder of 2024.
May 1, 2024 | Daily JAM, Short Term, Special Reports, UNG, Volatility |
I think that rather than trying to hedge market or sector direction in the 2024 market, I’m going to look for plays on the long side that will gain even if the market goes nowhere or tumbles, In other words, in financial jargon, I’m going to look for sectors and stocks that are uncorrelated with market direction rather than looking for sectors and stocks that are anti-correlated (where my gains depend on a downturn in the market.) That’s the logic with Step #5 today. Go long natural gas ahead of what is shaping up as a really, really hot summer.
April 25, 2024 | Daily JAM, Morning Briefing, Short Term |
U.S. economic growth slowed in the first three months of the year, the Bureau of Economic Analysis reported today. Gross Domestic Product (GSP) grew at an annualized rate of just 1.6%. That’s a big retreat from the 3.4% annual rate in the fourth quarter of 2023. Just as important as the drop in the growth rate itself is the reason for the decline.
April 22, 2024 | Daily JAM, GLD, GOLD, Jubak Picks, Morning Briefing, NEM, Short Term |
Gold futures for June delivery closed down 2.92% on the Comex today. The metal closed at $2343.40 an ounce. The drop came on a lessening of fears that the exchange of attacks between Israel and Iran would quickly lead to a wider Middle East war. And on growing sentiment that the Federal Reserve isn’t likely to cut interest rates soon. The drop in the gold contract for June delivery was the largest since February 3, 2023 when it fell 2.8%.
April 21, 2024 | Daily JAM, Morning Briefing, Short Term |
I’m sure you’ve noticed. The technology sector, which led the stock market rally in 2023 and in the early days of 2024, is in a slump. The Technology Select Sector SPDR ETF (XLK) tumbled 6.27% last week and is down 7.16% in the last month. For 2024 to date, as of the close on April 19, the sector is at break even with gain of 0.19%. Quite a turnabout for a sector that is still up 30% for the last 12 months. This week brings a raft of tech earnings that could turn the sector’s trend around. Or not.
April 14, 2024 | Daily JAM, Short Term |
After Israel and its allies (with the help of some Arab states that don’t want to see a wider Middle East war and who aren’t thrilled with the growing power of Iran and its proxies) succeeded in shooting down almost all of the drones (170), ballistic missiles (120), and cruise missiles (30) launched by Iran against the country, will the two sides both declare victory and claim that honor is satisfied or will one or the other escalate the war with another round of attacks? As of early Monday trading in Asia, the oil and gold markets have reacted with concern but not panic. Gold, up 13% already this year to a record above $2,400 an ounce, moved higher but the gains were relatively modest. Spot gold climbed 0.8% to $2,361.92 an ounce as of 6:20 a.m.in Singapore. The global oil market opened to the upside but by less than 1%. And prices have been steady to slightly weaker since then.
April 12, 2024 | Daily JAM, Morning Briefing, Short Term |
West Texas Intermediate rose to its October 2023 highs, before pulling back, on fears that an Iranian retaliation for an Israeli attack on an Iranian consulate would lead to a wider war in the Middle East. International benchmark Brent crude surged as much as 2.7% to top $92 a barrel before retreating to close at $90.26 a barrel, up 0.58% on the day. West Texas Intermediate, the U.S. benchmark, is now up 19% in 2024. Bloomberg reports that Western intelligence assessments are looking for an Iranian attack in the next 48 hours. No one wanted to hold U.S. equities ahead of the weekend.
April 10, 2024 | Daily JAM, Morning Briefing, Short Term |
In March the Consumer Price Index inflation rate rose more than expected by economists for a third straight month, the Bureau of Labor Statistics reported this morning. That looks to the market today, and to me, like it takes an initial interest rate cut off the table for the Fed’s June 12 meeting. The all-items inflation rate rose by 0.4% in March from February. The 12-month all-items inflation rate rose at a 3.5% rate in March. The core CPI, the inflation rate more important to the Federal Reserve, rose 0.4% month-over-month in March. And at a 3.8% annual rate.
April 7, 2024 | Daily JAM, Morning Briefing, Short Term |
This week I expect the market to put its obsession with the Federal Reserve, inflation, and interest rates on hold, and switch to watching earnings reports for the first quarter of 2024. The first batch of earnings–the Big Banks JPMorgan Chase (JPM), Citigroup (C), and Wells Fargo (WFC)–hits the wires on Friday, April 12–with Netflix (NFLX) to begin tech/momentum earnings reports on Tuesday, April 18. I think it would be an overstatement to say that the quarter’s earnings reports are make or break for this rally–the economic news is just too strong and interest rate cuts loom out there somewhere even if no one can say just when. But this quarter will provide an important data point in the “Stocks have climbed too far, too fast” vs. “This rally can run higher on a strong economy” debate. And the first set of high-profile earnings looks likely to throw some cold water on the most fevered market optimists.
March 31, 2024 | Daily JAM, Short Term |
The results are in. And, surprise the technology sector didn’t lead the market in the first quarter. In fact the 8.8% gain for the Technology Select Sector SPDR ETF (XLK), which tracks the S&P 500’s information technology sector, trailed the 10% gain for the Standard & Poor’s 500 index. And several other sectors outperformed the XLK ETF.
March 31, 2024 | Daily JAM, Morning Briefing, Short Term |
Maybe no one ever expects the Spanish Inquisition, but we all know by now to expect the monthly jobs report to be a big deal for this market. On Friday, April 5, the Bureau of Labor Statistics will report on nonfarm payrolls for March. Economists expect 216,000 nonfarm jobs to have been added in March.
