Stock Market Lifted By Positive Economic Data

Posted on by The INO.com Team

Hello traders everywhere. The S&P 500 and NASDAQ are on the rise for a third straight day, wiping out last weeks losses. The S&P 500 reached a four-month high as it held above the key 2,800 level that it has struggled to breach in recent weeks. Crude oil rose toward $58 a barrel in New York.

Economic Data

The Commerce Department announced today that the nondefense durable goods orders posted their largest increase in six months in January, rising 0.8%. Overall durable goods orders also rose 0.4% while economists polled by Refinitiv expected a decline of 0.5%. The economic data overshadowed a weaker-than-expected print on the producer price index. Continue reading "Stock Market Lifted By Positive Economic Data" →

Palladium Pushed Platinum To Record Low

Posted on by Aibek Burabayev

A year ago I wrote about the platinum/palladium ratio as it was on the edge, and there were two possible options, to restore the historically normal supremacy of platinum (target 1.93 oz) or to prolong the triumph of palladium (target 0.56 oz.).

This month the Platinum/Palladium ratio hit a new record low of 0.55 oz. amid the rocket move to the upside in the palladium market; the latter became the most precious metal beating gold. Let’s take a look at the big picture below.

Chart 1. Platinum/Palladium Ratio Monthly: New Record Low

platinum/palladium ratio
Chart courtesy of tradingview.com

The chart above starts with a robust growth to the upside from 3 to 5 oz. and this move had set the “normal” range for the fluctuations of the ratio within the next two decades. It was interrupted only once in 1997 when the ratio fell out of the range and quickly dropped to establish a previous record low of 0.56 oz. in 2001 amid rumors that Russia would ban palladium export. It was a textbook example of a “sell rumors - buy facts” market behavior, the ratio was down on rumors and then when the reality didn’t confirm it the ratio quickly returned to the normal range making a beautiful V-shape pattern. Then the ratio had spent another decade in that range. Continue reading "Palladium Pushed Platinum To Record Low" →

Micro and Macro Investing Using ETFs

Posted on by Matt Thalman

Most people wouldn’t think that investors could use Exchange Traded Funds to invest from both a macro standpoint and from a micro point of view, but due to the increasing number of ETFs now available to investors, this is possible.

First off, what is micro or macro investing?

Macro investing is when you take high-level data points and base your investment strategy on that information. A few examples of high-level data points would be gross domestic product, unemployment stats, US Home Sales stats, current interest rates, consumer confidence, business confidence, the purchasing manager's index, and so on. These data points highlight certain aspects of the economy from the ten-thousand-foot level. The macro picture will tell you how an economy is doing from a very general aspect.

The opposite side of that is micro investing or taking information from much smaller sample sizes and making investment decisions based on that information. A microdata point could be something as small as Apple’s (AAPL) revenue from their most recent earnings report or Amazon.com’s (AMZN) number of Prime Members subscribers. This very small, very direct and specific information will not tell you how the overall US economy is doing, but it would give you a better idea about how Apple or Amazon are faring as opposed to just knowing that the US GDP grew by 3.0% last quarter.

So how would you take macro investment data and put it to use with ETFs? Continue reading "Micro and Macro Investing Using ETFs" →

Weekly Futures Recap With Mike Seery

Posted on by The INO.com Team

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 in the April contract is currently up $13 an ounce at 1,298 after settling last Friday at 1,299 unchanged even though prices settled right at session highs today. Gold prices are trading above their 20-day but still below their 100-day moving average, and if you look at the daily chart, it basically mirrors exactly what silver has been doing as prices also topped out on February 20th at 1,349 as prices have now hit a two month low this week. The volatility in gold is starting to expand as I'm currently sitting on the sidelines waiting for better chart structure to develop, but I do think the downside is limited as there is a lot of uncertainty worldwide as Europe is also lowering its growth forecasts as that could send money flows back into the gold. The U.S. dollar hit a 2-year high this week, and that is why you witnessed around a $60 sell off or 4% from recent highs as I think gold prices have held up relatively well despite that fact so look to play this to the upside in my opinion.
TREND: MIXED
CHART STRUCTURE: IMPROVING
VOLATILITY: INCREASING
Continue reading "Weekly Futures Recap With Mike Seery" →

CVS - Earnings Implosion And Opaque Near-Term

Posted on by Noah Kiedrowski

The pharmaceutical supply chain cohort is simply unable to obtain firm footing in the backdrop consolidation within the sector, legislative backdrop, drug pricing pressures, rising insurance costs and a market that has lost patience with these stocks. All of these factors culminate into sub-par growth with a level of uncertainty as this sector continues to face headwinds from multiple directions. Many of the stocks that comprised this cohort presented compelling valuations in a very frothy market. CVS Health (CVS) was one stock that stood out as compelling value sitting, near multi-year lows in December of 2018. During the market rebound in January and February, CVS began to appreciate to new highs moving from $63 in mid-January to $70 in mid-February or an 11% move to the upside. Upon the release of its Q4 earnings, the narrative quickly changed as the transition to growth and Aneta integration is proving to be much slower than investors had anticipated, yielding an opaque situation near term for the stock. CVS has a healthy balance sheet and growing its dividend while seizing partnerships and acquisitions to propel growth into the future. It’s no secret that these companies have been faced with several headwinds that have negatively impacted the growth and the changing marketplace conditions have plagued these stocks. Regardless, until growth is restored and Aneta is fully integrated to yield a fully functional bumper-to-bumper healthcare colossus, the stock remains range bound. However, the long-term picture looks rewarding for value investors as growth initiatives and acquisitions bear fruit.

Market Challenges

The political backdrop has been a major headwind for the entire pharmaceutical supply chain (i.e., drug manufacturers, pharmaceutical wholesalers, and pharmacies/pharmacy benefit managers). Exacerbating the political climate, the drug pricing debate continues to rage on throughout political and social media circles weighing on the sector. This backdrop erodes pricing power and margins of drugs that ultimately move from drug manufacturers to patients with insurers and other middlemen playing roles in the supply chain web. Continue reading "CVS - Earnings Implosion And Opaque Near-Term" →