DOW On Track For 5th Straight Losing Week

Hello traders everywhere. As we head into afternoon trading on the verge of the holiday weekend there isn't much to rejoice about in the stock market. The DOW is on track to post it's fifth straight weekly loss standing at roughly -.80% on the week. Not to be outdone the S&P 500 and NASDAQ will post their third straight week of losses losing -1.7% and -2.1% respectively.

The mounting losses are all due to the ongoing trade war/negotiations with China. Stocks are in the green after President Trump said that the ongoing trade war could be over quickly, he told reporters on Thursday afternoon he expected the U.S.-China trade war to end swiftly. He also noted a trade deal with China could lift tough restrictions on the Chinese telecom giant Huawei.

5th Straight Losing Week

Crude oil prices are down more than -7% this week as trade worries spilled over to other markets. The increased tension in the U.S.-China trade war, which has investors increasingly worried about the state of the global economy and, by extension, the outlook for global oil demand growth for the rest of the year. Oil prices were battered by the clouded outlook on the global economy and oil demand, on top of Wednesday's bearish EIA inventory report, which showed a crude oil inventory build of 4.7 million barrels in the week to May 17. Continue reading "DOW On Track For 5th Straight Losing Week"

Iran Sanctions And OPEC's Deliberations Have Failed To Lift Oil Prices

OPEC+ members met over the weekend to discuss the oil market and the possible actions they may take at the next OPEC meetings scheduled for June 25th and 26th. OPEC’s press release reported:

Following its 14th Meeting, which took place on 19 May 2019, in Jeddah, the Kingdom of Saudi Arabia, the Joint Ministerial Monitoring Committee (JMMC) has reaffirmed its commitment to achieving a balanced market and working towards oil market stability on a sustainable basis with solid fundamentals.”

After the meeting, ministers spoke with reporters. According to reporting by CNBC:

Saudi Arabia’s influential oil minister, Khalid al-Falih, warned that global crude stockpiles are rising, threatening to swamp the world in oil and cause prices to collapse. Overall, the market is in a delicate situation. On the one hand, there is a lot of concern — and we acknowledge it — about disruptions and sanctions and supply interruptions. But on the other hand, we see inventories rising. We see plentiful supply around the world, which means we think, all in all, we should be in a comfortable situation in the weeks and months to come.” Continue reading "Iran Sanctions And OPEC's Deliberations Have Failed To Lift Oil Prices"

Semiconductor Sector Drags Market Lower

Hello traders everywhere. Semiconductor stocks fell after the ruling that Qualcomm used its dominant position to exact excessive licensing fees, a decision that could shake up the broader smartphone industry. Qualcomm (QCOM) fell -12%, while other chip stocks also dropped which in-turn has pulled the overall market as we head into afternoon trading.

Today's declines followed a Tuesday rebound for chip stocks after the White House granted temporary exemptions to an export blacklist against Huawei Technologies, potentially easing U.S.-China tensions as the two sides seek to get trade talks back on track. Some analysts expect trade-related swings to continue until investors get more clarity on escalating tariff threats by both sides.

Semiconductor

On the trade war front, Treasury Secretary Steven Mnuchin told CNBC's Ylan Mui that a trip to Beijing to retake trade negotiations has not been scheduled yet. This lowered hope of a speedy resolution to the U.S.- China trade war.

President Donald Trump followed through with his threat to increase tariffs on $200 billion in Chinese goods from 10% to 25% earlier this month. China immediately responded by upping the tariffs on $60 billion of U.S. goods to as high as 25%.

Key Levels To Watch This Week:

Continue reading "Semiconductor Sector Drags Market Lower"

Socially Responsible ETFs May Focus On More Than You Thought

With what seems like a never-ending flow of new Exchange Traded Fund options for investors to dump money into, one of the more popular, besides indexing, themes are the ‘socially responsible’ exchange traded funds. These funds focus on companies which are seen to be socially responsible. That could and often does mean many things, but for the most part, it represents companies which rate high on environmental, social, and corporate governance scales.

Firm meeting the environmental, social, and governance (ESG) criteria are also believed to have higher rates of return for investors because these companies are less likely to deal with government-imposed fines or just plain old bad publicity. But socially responsible ETF investing just doesn’t end with the ESG firms; it often excludes all companies that fall into the ‘sin stock’ categories. These would include, alcohol, tobacco, gambling, adult entertainment, weapons, and obviously now the marijuana companies. One ETF, which we will get to in just a moment even goes as far as focusing on companies which employ women in high-level leadership positions.

So, before you decide that socially responsible is just for ‘tree huggers’ and isn’t for you, take a look at a few of the ETFs I have highlighted below, and maybe one of them will strike a chord with you.

The first ETF on my list is the iShares MSCI KLD 400 Social ETF (DSI) which is one of the oldest ESG ETFs with an inception date of November 4th, 2006. Due to its long history, it is also one of the largest ESG funds with $1.4 billion in assets under management. However, DSI is in the middle of the range in terms of costs, as the fund carries an expense ratio of 0.25%. DSI tracks a market-cap-weighted index of 400 companies which are considered to have the highest positive environmental, social, and governance characteristics by MSCI. With that being said, Facebook (FB) is the second largest holding in the fund and with the companies ‘data’ scandals in its recent past, some would say the fund has too many holdings which don’t fully represent ‘true’ ESG principles. And because the fund is market-cap weighted, its top ten holdings represent 27% of the fund. So, with all that being said, DSI is an ESG fund, but not for the die-hards. So, if you on the fence about ESG investing, this is a good option to consider. Continue reading "Socially Responsible ETFs May Focus On More Than You Thought"

Bitcoin Duplicates Gold Chart

“It's not gods who make pots” as investors move the market, pushing the buttons and sending the orders to the marketplace. It’s clear that they tend to behave one way or another, and that’s why patterns exist and appear from time to time as “there is no new thing under the sun.” It doesn’t matter what the instrument is it, let it be a very old commodity or a new digital asset, it is people who “worship” it, make it valuable and move the price of it.

Bitcoin caught the hype again recently after a disastrous 2018 when it was just falling all way down. I would like to share with you an interesting similarity in the chart structure of “perpetual” gold and Bitcoin aka “new gold” to find out if this rally is a part of something bigger.

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Let’s start from the monthly gold chart as it is a model for the Bitcoin chart. Continue reading "Bitcoin Duplicates Gold Chart"