8.7 C
New York
Thursday, March 28, 2024

Monday – Live From Las Vegas!

What a fun weekend we've been having in Vegas!

We had a great dinner at Nobu on Saturday night (co-sponsored by TradeStation), followed by some poker and yesterday we had our first seminar day where we looked at the Global Macros, discussed trading techniques and made a few new picks for 2015.  That was followed by another great dinner at Rao's last night and this morning we are getting started at 6am Vegas time and will be doing live trading all day long.  We will be simulcasting in our Live Chat Room via WebEx – Greg will post a link when it's ready.

Meanwhile, all quiet on the Global front over the weekend or, at least, just the normal nonsense so the markets continue to drift along at the highs but it's a very busy week and we'll have to wait PATIENTLY to see how things play out.  We have 4 Fed Speakers this week but not too much data, which will keep the focus on the tail end of earnings.  So far, so blah on that front:

As noted by the WSJ:  "While profit gains have generally been solid, many blue-chip companies are posting weak sales growth or outright year-over-year revenue declines, causing worries about their long-term growth prospects. Others are reporting earnings increases driven by factors that don’t reflect sustainable improvements in their business, such as share buybacks and cost-cutting efforts."

Amplifying those concerns is a softening global economic outlook. U.S. multinational firms are now contending with slowing economic growth in key markets like Europe and China, and a strengthening dollar that threatens to further damp revenue by reducing the value of payments collected in foreign currencies when converted into dollars.

Few investors expect a sustained stock decline. But many traders and analysts say they fear future growth at U.S. companies won’t be robust enough to meet the high expectations currently implied by the above-average valuations on blue-chip shares. Friday’s employment report for October, which showed another month of modest job gains tempered by only slight increases in wages, underscored those concerns.

While earnings, so far, are up about 7.7% over last year a good 2% of it is from stock buybacks and the S&P, as of Friday, is already up 9.9% for the year (and up 9.1% since October 15th!).  Revenues are only up 3.8% and that's down from a 4.4% pace in Q2 – it's hard to see how this will be sustainable in a rising rate enviornment but investors certainly seem not to be worried about the future with the VIX back at 13. 

Stocks are trading at a generally high 15.8x forward earnings, more than 10% over the normal 14.1 rate, so there better not be anything to worry about down the road – as it's certainly not priced into these markets!  

We're still waiting for one of our 3 red indexes to cross the Must Hold line so we can make a few more bullish bets.  Today better be the day with the Dow just 26 points shy of its goal and we'll discuss this morning some nice, leveraged ways to profit off a potential rally over that 17,600 line (if it ever happens – we're still skeptical).  

Off to the conference! 

 

67 COMMENTS

Subscribe
Notify of
67 Comments
Inline Feedbacks
View all comments

Stay Connected

157,450FansLike
396,312FollowersFollow
2,280SubscribersSubscribe

Latest Articles

67
0
Would love your thoughts, please comment.x
()
x