Did You Own Any Of The Worst ETF's of 2017

Matt Thalman - INO.com Contributor - ETFs


2017 was a good year for investors as the S&P 500 increased 19.42%, but unfortunately, not all investors saw their investments grow in value during the year. Investors who had purchased some different Exchange Traded Funds saw their investments nearly disappear during what will be referred to as an “up” year for investors and the stock market.

What is not surprising though is that seven of the nine most prominent ETF losers of 2017 had something to do with investing in the Volatility Index. The worst performer was the ProShares Ultra VIX Short-Term Futures ETF (UVXY), falling 93.96%. This fund provides 2X exposure to short-term, first and second month, VIX futures. The UVXY is a fund essentially will offer investors a way to make money if the VIX itself increases. Furthermore, because this fund is leveraged 2X, if the VIX increases by 10%, UVXY investors will make 20%. But, due to the fund's exposure, it has high carrying costs, meaning investors who hold the fund for more than one day will lose money due to those roll costs.

Therefore, the UVXY needs both the market to be volatile regularly for investors to make any money, even over a small period of time. In 2018 its unlikely UVXY will lose as much as it did in 2017 because the end of 2016 was highly volatile following the election of President Trump. Continue reading "Did You Own Any Of The Worst ETF's of 2017"

Stocks Erase Early Losses After Senate Vote

Hello traders everywhere. Stocks are trading higher after erasing slight losses from earlier in the session, as the Senate reached a deal that would resume full government operations.

The S&P 500 is hitting record highs, rising 0.5%, with energy and telecommunications as the best-performing sectors.

The NASDAQ is also hitting all-time highs, advancing 0.7%, with shares of Netflix Inc. (NASDAQ:NFLX) hitting a record ahead of their earnings today.

The Dow has gained over 70 points to establish a new intra-day record, with The Boeing Company (NYSE:BA) leading the way.

MarketClub's Mid-day Market Report

Members of the Senate are expected to advance a stopgap bill to keep the government open through Feb. 8. Democratic Sen. Mark Warner said the party has the assurance it needs on the budget and immigration issues.

On Saturday, the U.S. government shut down after a bill that would have kept the government funded through mid-February was voted against in the Senate. The shutdown continued for a third day on Monday after the Senate on Sunday failed to reach an agreement to break an impasse before the work week began in Washington.

Key levels to watch this week: Continue reading "Stocks Erase Early Losses After Senate Vote"

Gold Update: Santa Claus Rally You Hoped For

Aibek Burabayev - INO.com Contributor - Metals


Two weeks before Christmas I posted the Gold & Silver update, where I asked you about your hopes for the traditional precious metals Santa Claus Rally at the end of 2017. The apparent answer those days was “No” as there was a severe weakness in the market and the price of the top metals was hitting another low. Let’s see in the poll results below what you were hoping would happen.

Chart 1. December 2017 poll results

Santa Claus Rally Poll
Poll courtesy of INO.com

And to no one's surprise, most of you expressed hope for a Santa Claus Rally. Bingo! A Christmas miracle came into the market the next day after the post was published to push the price of the top metals to the upside erasing almost all of the previous losses.

In the updated monthly chart below I would like to add a technical touch to this fairy tale. Continue reading "Gold Update: Santa Claus Rally You Hoped For"

Weekly Futures Recap With Mike Seery

We've asked Michael Seery of SEERYFUTURES.COM to give our INO readers a weekly recap of the Futures market. He has been Senior Analyst for close to 15 years and has extensive knowledge of all of the commodity and option markets.

Michael frequently appears on multiple business networks including Bloomberg news, Fox Business, CNBC Worldwide, CNN Business, and Bloomberg TV. He is also a guest on First Business, which is a national and internationally syndicated business show.

Gold Futures

Gold futures settled last Friday in New York at 1,334 an ounce while currently trading at 1,334 unchanged for the trading week as the volatility certainly has increased as gold prices have rallied about $100 from their December 12th low of 1,238 as this remains in a bullish trend. I do not have any recommendations in the precious metals, but if you are long a futures contract, I would place the stop loss under the two-week low at 1,308 as the chart structure will also improve in next week's trade. The main reason for the recent rally is the fact that the U.S. dollar has hit a three year low which is definitely a fundamental bullish indicator towards gold and the precious metals as a whole. The next major level of resistance is the September 8th high of 1,365. I think prices will try to touch that level in the coming weeks ahead as it looks to me that the dollar will continue its bearish trend, therefore, supporting gold despite the fact that the U.S. stock market seems to hit an all-time high every day which used to be negative towards gold. But 2018 is a different story as the commodity markets will start to catch up to the high stock prices in my opinion as the U.S economy is growing for the 1st time in nearly ten years. Gold futures are trading above their 20 and 100-day moving average as clearly the trend is higher, but I will look at other markets with a better risk/reward scenario at present.
TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: INCREASING

Continue reading "Weekly Futures Recap With Mike Seery"

Disney: Fox Acquisition, Streaming, and Tax Reform

Noah Kiedrowski - INO.com Contributor - Biotech


Introduction

FY2018 is off to an excellent start for The Walt Disney Company (NYSE:DIS) with a confluence of growth catalysts via streaming, studio strength, Fox acquisition and tax reform legislation. Disney has been establishing a firm footing in the streaming space via Hulu (30% stake and will likely be expanded to a majority 60% stake after the Fox acquisition), BAMTech, Sling, ESPN streaming service and a Disney branded service coming in 2019. The studio segment is off to a great start with record-breaking movie releases such as Thor: Ragnarok and Star Wars: The Last Jedi surpassing $850 and $900 million in worldwide box office receipts, respectively. Disney is evolving to address the deteriorating Media Networks business segment with major streaming initiatives. Disney has one of its biggest movie slates for FY2018 with Blank Panther, The Avengers: Infinity War and Solo: A Star Wars Story around the corner. Disney also announced that it is acquiring 21st Century Fox’s assets to further drive growth for $52 billion. This acquisition brings in noteworthy studio assets such as more Marvel properties (X-Men, Fantastic 4 and Suicide Squad) and Avatar along with TV content, regional sports and a 60% majority stake in Hulu. Disney currently pays a 33% effective tax rate and now with tax reform signed into law; this rate will be dramatically reduced a third to 21%. Disney can deploy more cash into growth initiatives and return value to shareholders via increased dividends and share buybacks with the increased cash flow. Disney offers a compelling long-term investment opportunity considering the growth, Fox acquisition, pipeline, Media Networks remediation plan, diversity of its portfolio, tax reform, share repurchase program and dividend growth.

Transformative Fox Acquisition

Disney shelled out $52 billion to acquire many of Fox’s assets to drive future growth in regional sports, movies, TV programming and foreign market penetration. This is a transformative acquisition as Disney will take control of the movie studio and significant TV production assets and gain exposure to international markets through Fox’s networks via a 39% ownership of Sky (Figures 1, 2 and 3). In addition to the movie studio, TV production and international assets such as Star and Sky, Disney will also add entertainment networks such as FX and National Geographic. Bob Iger stated that the deal should close in 12-18 months and highlighted the chance to expand Fox's Avatar franchise particularly considering new theme park lands. In addition to expanding the Marvel Universe via X-Men, Fantastic Four, and Deadpool, Disney will obtain Fox's distribution rights to the first Star Wars film. The deal will be accretive to EPS for the second fiscal year after closing, says Disney CFO Christine McCarthy, and Disney expects roughly $2B in cost synergies by 2021. Taking a majority stake in Hulu will further accelerate Disney’s streaming capabilities and compete directly with Netflix (NFLX). Taking majority control of Hulu is going to be beneficial and result in "flowing more content in Hulu's direction," and managing Hulu "becomes a little more clear, a little more effective." Turning to sports, combining Fox’s sports content with Disney’s ESPN will be synergistic and a "perfect complement" to ESPN's offerings, which are national in nature and will benefit from regional focus, Iger says. Continue reading "Disney: Fox Acquisition, Streaming, and Tax Reform"