Archive for 2017

Analysis: Here’s What Washington Is Likely To Accomplish By Years’ End

Courtesy of Benzinga.

Analysis: Here's What Washington Is Likely To Accomplish By Years' End

The SPDR S&P 500 ETF Trust (NYSE: SPY) is up nearly 19 percent in 2017, and much of the rally has been driven by news out of Washington. According to one Wall Street analyst, there are still plenty of political fireworks to come between now and the end of the year.

The Analyst

Height Securities analyst Stefanie Miller.

The Thesis

Tax reform is the top priority in Washington at the moment, and its potential outcome could impact other market-moving issues on the agenda as well, Miller said in a Monday note.

Investors should expect a new version of the tax bill sometime midweek, as Republicans update the legislation and prepare to vote on a final version, she said

“The final bill will need to walk that delicate balance of achieving both the political and budget requirements to pass both chambers of Congress one more time.” 

Miller said investors shouldn’t expect much from the tax reform conference committee meeting Wednesday, which Miller said she expects to be a glorified photo opportunity. 

By Thursday or Friday, Miller said the conference committee should meet to hold a vote on the final bill to send to the House and Senate.

At the same time, Congress will continue to debate a new government spending package ahead of the new Dec. 22 government shutdown deadline. Tax reform will likely capture most of the headlines while the spending package takes the back seat, Miller said. 

The week of Dec. 18-22 will be critical for the markets, according to Height Securities. 

“We see a path to resolution of both the tax reform bill earlier in the week and government funding legislation later in the week,” Miller said. 

Price Action

The 2017 rally suggests investors have high expectations for the tax reform bill. As Republicans have made more progress on proposed tax cuts, the S&P 500 has gained another 2.8 percent in the past month. 

Related Links:

Emboldened? Payday Lender CURO Group IPOs With Mulvaney Now In Charge Of CFPB

Why Fannie And Freddie Have A Path To Survival

Posted-In: Analyst Color Broad U.S. Equity ETFs Futures Politics Top Stories Markets Analyst Ratings ETFs Best of Benzinga

Goldman: Total System Services Shares No Longer A Bargain, But Still Room For Upside

Courtesy of Benzinga.

Goldman: Total System Services Shares No Longer A Bargain, But Still Room For Upside

Total System Services, Inc. (NYSE: TSS) announced a quarterly dividend of 13 cents per share payable Jan. 2. 

The Analyst

Goldman Sachs’ James Schneider downgraded Total System Services from Buy to Neutral and maintained the $80 price target.

The Thesis

Schneider decided to downgrade the stock because it’s approaching Goldman’s price target, he said. (See Schneider’s track record here.) 

Total System Services has around 5 percent upside potential, the analyst said.

The company is in a good position to win medium-sized card issuing contracts in the coming quarters, driving incremental upside to Street estimates, Schneider said. He added that he expects margin expansion in 2018.  

The stock is no longer trading at a substantial discount to its peers, but it is capable of modest multiple expansion, Schneider said. New card issuer wins and stronger margin performance are upside risks, while slower growth and consumer credit cyclicality are downside risks, he said. 

The Price Action

Total System Services was trading nearly flat at $76.59 at the time of publication. It has gained around 30 percent in the last six months and more than 50 percent year-to-date.

Related Link:

Analyst: Fintech Is A Big Winner From Tax Reform, 5 Stocks To Play 

Latest Ratings for TSS

Date Firm Action From To
Dec 2017 Goldman Sachs Downgrades Buy Neutral
Oct 2017 Jefferies Maintains Hold
Oct 2017 Citigroup Maintains Buy

View More Analyst Ratings for TSS

View the Latest Analyst Ratings

Posted-In: Goldman Sachs James SchneiderAnalyst Color Downgrades Price Target Analyst Ratings

Wall Street Weighs In: Two Analyst’s Favorite Stocks In The Payments Space

Courtesy of Benzinga.

Wall Street Weighs In: Two Analyst's Favorite Stocks In The Payments Space

A pair of Wall Street powerhouses have weighed in on their 2018 outlooks for payment stocks. Analysts from both firms are bullish on their top payment names heading into what could be a big year for investors. 

Bank Of America Weighs In

On Friday, Bank of America analyst Jason Kupferberg said Visa Inc (NYSE: V), Mastercard Inc (NYSE: MA) and Paypal Holdings Inc (NASDAQ: PYPL) are the gold standards in electronic payments.

“We like the scarcity value of PYPL – $88B market cap, pure-play on online/digital payments, 18-20 percent organic revenue growth, stable/improving margins, balance sheet optionality,” Kupferberg said. He also said he prefers Visa over Mastercard based on the stock’s relative valuation.

In the processors space, Kupferberg said Automatic Data Processing (NASDAQ: ADP) is a top pick.

Goldman’s Take

On Monday, Goldman Sachs analyst James Schneider jumped in with his top payment stock picks. Stock valuations, software assets and business-to-business payments will be among the leading themes for payments investors in 2018, he said. 

ADP is Goldman’s top contrarian payment stock pick for 2018 thanks to the Street’s relatively low expectations for margin expansion, the analyst said. Schneider echoed Bank of America’s love for large cap stock picks Visa and Mastercard.

“We see MA benefiting from its early lead in B2B,” he said, adding that both companies could find tailwinds from Europe and emerging markets in the coming year.

Ratings And Targets

Bank of America has the following ratings and price targets for payment stocks:

  • Buy rating and $170 target for Mastercard.
  • Buy rating and $88 target for Paypal.
  • Buy rating and $126 target for Visa.
  • Buy rating and $131 target for ADP.

Goldman Sachs has the following ratings and price targets for the stocks mentioned:

  • Buy rating and $128 target for Visa.
  • Buy rating and $176 target for Mastercard.
  • Buy rating and $89 target for Paypal.
  • Buy rating and $135 target for ADP.

Related Links:

PayPal’s Pay With Venmo Could Positively Surprise Next Year, KeyBanc Says

Cash In On Square’s Run, Analyst Says

Posted-In: Bank of America Goldman Sachs James SchneiderAnalyst Color Long Ideas Price Target Analyst Ratings Trading Ideas Best of Benzinga

Vetr Recommends Walgreens As A Strong Buy

Courtesy of Benzinga.

The Vetr crowd on Monday upgraded its rating on Walgreens Boots Alliance, Inc. (NASDAQ: WBA) from 4 stars (Buy), issued eight days ago, to 4.5 stars (Strong Buy).

After gaining 8.7 percent through November, share price in Walgreens has traded in range throughout December. The stock finished Monday’s session up sligtly at $71.88.

See how crowdsourced ratings could help you time the market.

Currently, the Vetr crowd’s average price target on Walgreens is up at $77.91, which is still below the average analyst price target of $91.58. Less than 2 percent of Vetr users are holding WBA in their watch-lists.

Latest Ratings for WBA

Date Firm Action From To
Dec 2017 Deutsche Bank Initiates Coverage On Hold
Nov 2017 Citigroup Maintains Buy
Nov 2017 Leerink Swann Downgrades Outperform Market Perform

View More Analyst Ratings for WBA

View the Latest Analyst Ratings

Posted-In: VetrUpgrades Price Target Crowdsourcing Analyst Ratings General

Why One Android Defector Still Isn’t An iPhone Convert

Courtesy of Benzinga.

Why One Android Defector Still Isn't An iPhone Convert

Where is the back button? The multimenu buttons and swipe text functionality? The “Close All” app option, the ease of customizing app folders, the quick connectivity for Bluetooth and Wi-Fi?

Loup Ventures intern Alex Schwappach recently upgraded from his two-year-old Samsung Galaxy S6 to the iPhone 8 Plus, but he isn’t yet an Apple Inc. (NASDAQ: AAPL) convert.

Schwappach, one of the 64 percent of Americans who own an Apple device, isn’t convinced of iPhone superiority and sees advantages to his old Galaxy, whose screen size and battery life are objectively obsolete.

“I can see myself going back to Android,” he said in a Monday note. “I switched because I was curious and wanted to experience an iPhone even though my Samsung phone was working fine. I’m not loyal to the Apple brand and will continue to be curious, so I’ll consider buying the next great phone that comes out.”

What’s Going Right With Apple

Nonetheless, Schwappach said he’s sold on a number of exclusive iPhone features.

There’s the iMessage, the Home button, 3D touch and the ring-and-silent switch. There’s the simplicity in preprogrammed apps, capacity to FaceTime and integration with other devices in the company ecosystem. The “intuitive” iOS and data protection were also considered upgrades.

“I’m not sold on the iPhone yet, but my next phone decision will likely be based on which phone has the best AR and VR experience,” Schwappach said, noting that the most accommodating device will “win his loyalty.”

What This Means For Apple

The nomadic consumer minimally boosted Apple’s 43-percent U.S. market share, a claim placing it second behind Samsung (54 percent). But Schwappach’s even temporary defection from the Android base compounds that of a growing number of converts chipping away at Samsung’s control. Just last year, Samsung claimed 60 percent of the U.S. market.

His consumer

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Earnings Scheduled For December 11, 2017

Courtesy of Benzinga.

Earnings Scheduled For December 11, 2017

Companies Reporting After The Bell

  • Quanex Building Products Corporation (NYSE: NX) is estimated to post quarterly earnings at $0.29 per share on revenue of $232.47 million.
  • KMG Chemicals, Inc. (NYSE: KMG) is projected to post quarterly earnings at $0.63 per share on revenue of $106.60 million.
  • Peregrine Pharmaceuticals, Inc. (NASDAQ: PPHM) is estimated to post quarterly loss at $0.12 per share on revenue of $13.54 million.
  • Investors Real Estate Trust (NASDAQ: IRET) is expected to post quarterly loss at $0.11 per share on revenue of $53.69 million.

Posted-In: Earnings scheduleEarnings News Pre-Market Outlook Markets

After $150 Billion Buying Binge, ‘Tokyo Whale’ Seen Paring Back ETF Purchases In 2018

Courtesy of ZeroHedge. View original post here.

A few months ago, we noted that the Bank of Japan had decided to throw every textbook out of the window and crank their plunge-protection to '11'after reports surfaced that they owned a staggering 75% of Japan's ETFs.

The BOJ first started their buying spree in December 2010 – when they held no ETFs at all – and have since accumulated some $150 billion in aggregate holdings.  The buying was all as part of unprecedented "economic stimulus" which has undoubtedly contributed to the Nikkei 225 Stock Average surging roughly 125% since December 2010.

Here's a quick graphical recap of the program courtesy of Bloomberg…

…and another look which shows the central bank owns three quarters of ETFs by market value…

…all of which has resulted in the following bubble stock market appreciation…

Not surprisingly, since the program started, everyone from the head of the country’s stock exchange to the chairman of the Japanese Bankers Association has questioned the ETF program’s size and whether it artificially depresses volatility.

Now, with the Nikkei surging to 25 year highs, analysts are increasingly saying it's time for the BOJ to put this specific component of their many controversial bubble-blowing policies to rest.  Per Bloomberg:

Sometime next year, the BOJ will cut its annual buying target for domestic exchange-traded funds by as much as a third from the current 6 trillion yen ($53 billion), says Toru Ibayashi, head of Japanese equities at UBS Wealth Management in Tokyo. Soichiro Monji of Daiwa SB Investments Ltd. expects a similar reduction, but by the end of March.

“Four trillion yen,” UBS’s Ibayashi predicted. “And everybody will understand.”

"Fear of deflation was behind the 6 trillion yen target,” Daiwa SB’s Monji said in an interview. “We’re no longer in that kind of environment. Risks are now skewed toward the upside, rather than the downside. It’s hard for the central bank to justify its buying spree.”

“Given the circumstances at this point in time, it is difficult for the BOJ to keep buying ETFs at six trillion yen per year,” Ibayashi

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A Gift From The Oldies

Courtesy of ZeroHedge. View original post here.

By Chris at

I bumped into a friendly bloke at my local gym last week. Jim is his name.

Jim tells me he just started because, and I quote, "my doctor says I'm going to die unless I do something".

Now, I assure you it doesn't take a doctor to figure this out.

One glance in Jim's direction and you can tell that underneath all that weight there's a big struggling heart in there… just ready to explode. He was surprisingly frank and tells me it's so bad that he can only do little bits of exercise because if he pushes it too hard, there is a very serious risk that his ticker just says, "You know what… f*ck it," and gives up.

Jim's 52, which is really a ripe old age and about normal life expectancy — if we lived in the 1700's. But we don't.

I feel for Jim, told him so, and naturally we all hope that he can bring himself back from the brink. But the fact is many people aren't like Jim. As mentioned in a previous article on pensions, they're living longer and stronger.

Years ago it seemed that when you hit 65 you’d retire, receive a gold watch, and proceed to spend your pension money on a rocking chair and pot plants. Ten years later you’d be in a box and, since pot plants are cheap, the cost of keeping you alive wasn’t prohibitive.

Not anymore. Today things are different. My wife belongs to a running club and there are a bunch of octogenarians there who put us both to shame. Nope, today you retire and spend your pension on kickboxing classes and second wives, with no plan of dying anytime soon.

Now, this second group (our kickboxing oldies) pose a grave problem.

You see, unlike Jim, these folks, who’ve spent their life exercising, go on and on and on.

70 is spring chicken young for them, and many make it well into their 80's and 90's when inevitably they need nappies, nursing care, accommodation, and mushy food to eat.

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These Are The 30 Biggest Risks Facing Markets In 2018

Courtesy of ZeroHedge. View original post here.

Once upon a time, Wall Street analysts had just two things to worry about: interest rate risk and corporate profits – virtually everything else was derived from these.  Unfortuantely, we now live in the new normal, where central banks step in every time there is even a whiff of an imminent market correction (as BofA explained last week), and the result is that nobody know what is and what isn't priced into the market any more, simply because the market in the conventional sense of a future discounting mechanism no longer exists (as Citi explained earlier this summer).

Which is why, paradoxically, even as the VIX slides to record lows, the number of things to worry about on Wall Street grows longer and longer. In fact, according to Deutsche Bank's Torsten Slok, there are no less than 30 material risks investors should beware in the coming year, ranging from a U.S. equity correction to a reversal of Brexit to Irish presidential elections, to a "Bitcoin crash," rising inflation, danger from North Korea and results from special counsel Robert Mueller's probe.

The risks should be thought of “not only as potential VIX-boosters but also as potential sources of faster or slower growth than what we have in our baseline forecast,” Slok explained in his note, which also shows that even without a major risk materializing, the GDP rebound of 2017 is unlikely to persist.

As for the recent surges and drops in Bitcoin, "you wonder where prices will even be by the end of 2017," Slok said during an appearance on CNBC's Trading Nation broadcast.

Predicting that price swings of the cryptocurrency will remain an issue in 2018, Slok said questions about Bitcoin regulation, transparency and disclosure issues remain unanswered. "It's mainly because it is something that I think financial markets so far have been discounting as a small issue," Slok said. "We do worry a bit that it could become more systemic, in particular, if the current trends continue into 2018."

But the Deutsche Banker's biggest worry is understandably a spike in inflation in the coming months. Low national unemployment, growth projections for the nation's gross domestic product, and other financial measures signal a potential

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California Is Running Out Of Prisoners To Fight Its Deadly Wildfires

Courtesy of ZeroHedge. View original post here.

While many on the left have celebrated California’s push to legalize marijuana as a victory for a progressive, harm-reduction approach to combating addiction and crime, the pullback in the number of low-level prisoners entering the state’s penal system is leaving the California Department of Forestry and Fire Protection.

Court mandates to reduce overcrowding in the state’s prisons – combined with the legalization of marijuana, the most commonly used drug in America (aside from alcohol, of course) – have led to a sharp drop in the number of prisoners housed at state facilities in recent years. Interestingly, one byproduct of this trend is it’s creating headaches for the state officials who are responsible for coordinating the emergency wildfire response just as California Gov. Jerry Brown is warning that the severe fires witnessed this year – the most destructive in the state’s history – could become the new status quo.

To wit, since 2008, the number of prisoner-firemen has fallen 13%.

As the Atlantic reports, California has relied on inmates to help combat its annual wildfires since World War II, when a paucity of able-bodied men due to the war effort forced the state to turn to the penal system for help. More than 1,700 convicted felons fought on the front lines of the destructive wildfires that raged across Northern California in October.

While communities from Sonoma to Mendocino evacuated in the firestorm’s path, these inmates worked shifts of up to 72 straight hours to contain the blaze and protect the property residents left behind, clearing brush and other potential fuel and digging containment lines often just feet away from the flames. Hundreds more are on the fire line now, combatting the inferno spreading across Southern California.

But over the course of the last decade, their ranks have begun to thin. As drought and heat have fueled some of the worst fires in California’s history, the state has faced a court mandate to reduce overcrowding in its prisons. State officials, caught between an increasing risk of wildfires and a decreasing number of prisoners eligible to fight them, have striven to safeguard the valuable labor inmates provide by scrambling to recruit more of them to join the force. Still, these

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Zero Hedge

Enemy Of The People?

Courtesy of ZeroHedge. View original post here.

Via The Zman blog,

There has never been a time when normal people did not know the media was biased and biased in a predictable direction. For every non-liberal in the media, there were at least ten liberals. The ratio was probably higher, but then, as now, some lefties liked to pretend they were independents or some third option.

The media used to invest a lot of time denying they had a bias and an agenda, but the only people who believed them were on the Left, which had the odd effect of confirming they had a bias and an agenda.


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Phil's Favorites

A 2019 Earnings Recession?


A 2019 Earnings Recession?

Courtesy of 

Shout to Leigh!

On the new Talk Your Book – Josh Brown is joined by Leigh Drogen of Estimize, one of the leading providers of crowdsourced financial and economic data to talk about the trend in corporate profits that could potentially lead to an earnings recession later this year.

What is the thing that Leigh is seeing in the data that Wall Street isn’t yet picking up on? What segment of the stock market is most at risk? Why is the crowd smarter than the narrow consensus of Wall Street analysts?

Check out Estimize ...

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D.E. Shaw Investment Calls For Leadership Change At EQT

By ActivistInsight. Originally published at ValueWalk.

Elliott Management has offered to acquire QEP Resources for approximately $2.1 billion, contending the oil and gas explorer’s turnaround efforts have done little to lift the company’s share price. The company responded and said that a thorough review of the proposition is imperative in order to properly act in the best interests of shareholders, “taking into account the company’s other alternatives and current market conditions.” The news came only a month after Travelport Worldwide agreed to sell itself to Siris Capital Group and Elliott’s private equity arm Evergreen Coast Capital for $4.4 billion in cash and two months after Athenahealth was bought by Veritas and Evergreen for $5.7 bi...

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Kimble Charting Solutions

Gold & Silver Testing Important Breakout Levels!

Courtesy of Chris Kimble.

Gold and Silver from a long-term perspective have created a series of lower highs over the past 8-years. Will 2019 bring a change to this trend? A big test is in play!

Gold since the lows in 2016 has created a series of higher lows, while Silver may have created a double bottom.

Gold & Silver are currently facing break attempts a (1) and (2). These falling resistance lines have disappointed metals bulls for the past few years.

The direction of Gold and Silver weeks and months from now should be highly influenced by what each does as they are attempting to break above important resistance levels.

To become a member of Kimbl...

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Insider Scoop

UBS Says Disney's Streaming Ambition Gives It A 'New Hope'

Courtesy of Benzinga.

Related DIS Despite Some Risks, Analysts Still Expecting Double Digit Growth From Communications Services In Q4 ... more from Insider

Digital Currencies

Russia Prepares To Buy Up To $10 Billion In Bitcoin To Evade US Sanctions

Courtesy of Zero Hedge

While the market has been increasingly focused on the rising headwinds in the global economy in general, and China's economic slowdown in particular, while the media is obsessing over daily revelations that Trump may or may not have colluded with Russia to get elected, a far more critical, if underreported, shift has been taking place over the past year.

As we reported in June, whether due to concerns over draconian western sanctions and asset confiscations following the poisoning of former Russian military officer Sergei Skripal, or simply because it wanted to diversify away from the dollar, Russia liquidated virtually all of its Treasury holdings in the late spri...

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Chart School

Weekly Market Recap Jan 13, 2019

Courtesy of Blain.

In last week’s recap we asked:  “Has the Fed solved all the market’s problems in 1 speech?”

Thus far the market says yes!  As Guns n Roses preached – all we need is a little “patience”.  Four up days followed by a nominal down day Friday had the market following it’s normal pattern the past nearly 30 years – jumping whenever the Federal Reserve hints (or essentially says outright) it is here for the markets.   And in case you missed it the prior Friday, Chairman Powell came back out Thursday to reiterate the news – so…so… so… patient!

Fed Chairman Jerome Powell reinforced that message Thursday during a discussion at the Economic Club of Washington where he said that the central bank will be “fle...

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Members' Corner

Why Trump Can't Learn


Bill Eddy (lawyer, therapist, author) predicted Trump's failure based on his personality, which was evident years ago. This article, written in 2017, references a prescient article Bill wrote before Trump became president, in July, 2016, 5 Reasons Trump Can’t Learn. ~ Ilene 

Why Trump Can’t Learn

Donald Trump by Gage Skidmore (...

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Opening Pandora's Box: Gene editing and its consequences

Reminder: We are available to chat with Members, comments are found below each post.


Opening Pandora's Box: Gene editing and its consequences

Bacteriophage viruses infecting bacterial cells , Bacterial viruses. from

Courtesy of John Bergeron, McGill University

Today, the scientific community is aghast at the prospect of gene editing to create “designer” humans. Gene editing may be of greater consequence than climate change, or even the consequences of unleashing the energy of the atom.


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Mapping The Market

Trump: "I Won't Be Here" When It Blows Up

By Jean-Luc

Maybe we should simply try him for treason right now:

Trump on Coming Debt Crisis: ‘I Won’t Be Here’ When It Blows Up

The president thinks the balancing of the nation’s books is going to, ultimately, be a future president’s problem.

By Asawin Suebsaeng and Lachlan Markay, Daily Beast

The friction came to a head in early 2017 when senior officials offered Trump charts and graphics laying out the numbers and showing a “hockey stick” spike in the nationa...

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Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.


This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...

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Free eBook - "My Top Strategies for 2017"



Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:


·       How 2017 Will Affect Oil, the US Dollar and the European Union


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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

Learn more About Phil >>

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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

Market Shadows >>