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    Stocks - r/Stocks Daily Discussion Monday - Nov 02, 2020

    November 02, 2020

    Stocks - r/Stocks Daily Discussion Monday - Nov 02, 2020

    r/Stocks Daily Discussion Monday - Nov 02, 2020

    Posted: 02 Nov 2020 12:08 AM PST

    These daily discussions run from Monday to Friday including during our themed posts.

    Some helpful links:

    If you have a basic question, for example "what is EPS," then google "investopedia EPS" and click the investopedia article on it; do this for everything until you have a more in depth question or just want to share what you learned.

    Please discuss your portfolios in the Rate My Portfolio sticky..

    See our past daily discussions here. Also links for: Technicals Tuesday, Options Trading Thursday, and Fundamentals Friday.

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    Apple announces event for Nov. 10 where new Macs with Apple chips expected

    Posted: 02 Nov 2020 10:02 AM PST

    Apple announced on Monday an event for Nov. 10 where it's expected to announce new Macs.

    Apple said earlier this year that it planned to release Mac computers with its own Apple-designed chips based on ARM, instead of Intel processors. Apple's iPhones and iPads have long used Apple-designed processors, which the company says helps extend battery life and provide faster performance.

    Apple could launch a iMac desktop with a new design and laptops using Apple chips, according to a research note from TF Securities analyst Ming-Chi Kuo published earlier this year.

    Mac sales have been a highlight for Apple during the pandemic. In the quarter ending in June, Apple reported $9 billion in Mac sales, which was up 28% year-over-year.

    Source

    submitted by /u/Brothanogood
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    NIO Manufacturing TL;DR (with currencies translated to USD)

    Posted: 01 Nov 2020 08:43 PM PST

    Hey all,

    Read through the 10-K filings and figured I would highlight the risk catalysts and manufacturing agreements NIO is currently involved with to give you a better idea of their output forecast and so you can research yourself as to whether or not they can be sustainable:

    We have entered into an arrangement with Jianghuai Automobile Group Co., Ltd., or JAC, for manufacturing the ES8 for five years. In April 2019 and March 2020, we entered manufacturing cooperation agreements with JAC for the manufacture of the ES6 and the EC6, respectively.

    The ES8 and ES6 are manufactured in partnership with JAC at its Hefei manufacturing plant. JAC is a major state-owned automobile manufacturer in China and it constructed such Hefei manufacturing plant for the production of the ES8 (with a modified production line for the ES6) and potentially other future vehicles with us.

    we pay JAC for each vehicle produced on a per-vehicle basis monthly for the first three years.

    In addition, for the first 36 months after the start of production, which commenced on April 10, 2018, to the extent the Hefei manufacturing plant incurs any operating losses, we have agreed to compensate JAC for such operating losses. Cooperation after the first 36 months will be subject to further negotiation between the parties. As of December 31, 2019, we had paid JAC a total of $90,310,656.80, including $49,772,468.20 as compensation for losses incurred in 2018 and 2019 and $40,538,188.60 for manufacturing and processing fees.

    Risk catalysts mentioned:

    Beginning July 1, 2018, the tariff on imported passenger vehicles (other than those originating in the United States of America) was reduced to 15%. As a result, our pricing advantage could be diminished.

    (In English: The trade war between the West and China is killing any chances of NIO achieving market share in places outside of China.)

    Pursuant to the 2018 Negative List, the limits on foreign ownership of auto manufacturers were lifted in 2018 for NEVs and will be lifted by 2022 for ICE vehicles. As a result, foreign EV competitors could build wholly-owned facilities in China without the need for a domestic joint venture partner. For example, Tesla has started constructing a factory in Shanghai without a joint venture partner. These changes could increase our competition and reduce our pricing advantage.

    (In English: China is incentivizing FDI (Foreign Domestic Investment), which is leading to competition from corps like Tesla who are much more established and have the funds to outpace NIO.)

    We believe that our sales performance of ES8 and ES6 in 2019 was negatively affected by the reduction in the subsidy standard. The current 2020 subsidy standard, effective from April 23, 2020, (i) reduces the base subsidy amount in general by 10% for each NEV, (ii) sets subsidies for 2 million vehicles as the upper limit of annual subsidy scale; and (iii) provides that national subsidy shall only apply to an NEV with the sale price under $44,826.60 or equipped with battery swapping module. Further, the 2021 and the 2022 subsidy standard are expected to be reduced by 20% and 30% respectively as compared to the standard of the immediate preceding year.

    (In English: Less government incentive = lower operating margin = less revenue growth.)

    Our servicing will primarily be carried out through third parties certified by us. Although such servicing partners may have experience in servicing other vehicles, we and such partners have very limited experience in servicing our vehicles. Servicing electric vehicles is different from servicing ICE vehicles and requires specialized skills, including high voltage training and servicing techniques

    (In English: NIO cannot afford to achieve vertical integration yet and relies heavily on outsourcing to other, much smaller companies to get certain jobs done. Their supplier network is likely to be inefficient at times and falter under macroeconomic headwinds like government intervention (think trade war and tax credits) and covid-19 and this makes NIO's operations all the more compromised.)

    Some outside data to look at:

    China Total Vehicle Sales: 1997 - 2020

    Overall seems incredibly cyclical but in an upward trend over the next 5 years. Long term investors shouldn't worry about demand.

    China GDP Annual Growth Rate: 1989 - 2020

    China believe it or not is still considered a developing country which is defined by its high GDP growth rate and low standard of living. It averages 6% a year but due to covid fell harshly. Right now it is sitting at 4% but is expected to return to 6% within the next two years.

    China Consumer Confidence Index: 1991 - 2020

    Consumer confidence forecasts are predicted to rise as the world recovers from covid-19. This in turn can translate to increased spending and economic stimulation (aka more potential demand and orders for NIO vehicles.)

    China Car Production: 2005-2020

    China is set to return to the 25 Million vehicle production milestone it often flirted with over the past decade. Should it overcome the impact on manufacturing from covid and the trade war, it may very well achieve even higher historical output although that is a very optimistic outlook given the current geopolitical situation.

    My personal outlook:

    I'm getting a lot of comments assuming that I'm bearish on NIO. Overall I'm neutral but hopeful that there is more to come once they move past their growth phase. Here is what I think they need to focus on to achieve Tesla levels of growth:

    • Achieve vertical integration to lower cost of goods sold as much as possible

    • Focus primarily on R&D investments (management has been doing that!)

    • Don't focus on international expansion. That can wait until after they've established a steady footing financially and have achieved a significant market share in China. Right now international expansion is too expensive and risky given they are still in a growth phase and cannot be 100% confident in the numbers from the factory or the sentiment from customers.

    • Make sure Tesla does not succeed in China. It currently has a factory and is working on fighting NIO for market share. If Tesla wins NIO will remain a smaller competitor and not achieve nearly as much growth as people are hoping for. I see a lot of people banking on them monopolizing the EV market in China. That is a naive assumption at this time and it is still anyone's guess as to who will come out on top once the dust has settled.

    • Pray for tax incentives. Tesla did so well in the states because the fed and state authorities gave tons and tons of tax credits for renewable energy investments and made it very attractive to buy electric vehicles. Right now China is on track to reduce these incentives which as I mentioned above will hurt NIO's bottom line. If green energy credits can be expanded upon within China it will make NIO's products much more attractive and the production of them financially feasible for NIO given their current state.

    We will see how all of this plays out over the coming week as several important make-or-break announcements will be coming out regarding the company that can very well decide if it is the next Tesla or not.

    submitted by /u/Sir_Meowstro
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    Amazon shipping costs rose more than $5 billion in the third quarter

    Posted: 02 Nov 2020 08:36 AM PST

    https://www.marketwatch.com/story/amazon-shipping-costs-rose-more-than-5-billion-in-the-third-quarter-11604325802

    "With consumer shopping behavior shifting online at an accelerating pace, structural competitive advantages around fulfillment and scale, and a reasonable ~1.7X multiple on e-commerce GMV driving most of our valuation, we still find Amazon shares very compelling and think much of this strength will persist beyond the current pandemic," analysts wrote.

    "Solid outperformance in core retail, increased retention in Prime and robust unit growth, all attest to Amazon's accelerated pace of share gains of the consumer wallet amid the pandemic," wrote Truist Securities analysts.

    "Amazon can deliver substantial earnings over the long term by growing spending more slowly than revenues," analysts said. "Amazon Web Services, Fulfillment by Amazon, and ads should drive steady margin growth, with Prime driving overall retail revenue growth."

    submitted by /u/coolcomfort123
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    One Share Driving My Mom (and Me) Crazy

    Posted: 02 Nov 2020 03:58 AM PST

    My father worked at IBM for 30 years back in the day, and somehow acquired only one share of stock along the way. He died a few years ago, and my mother keeps receiving quarterly checks for less than $2.00. She can't deposit them because they're in his name, and the process to get the share transferred to her name costs more than the share is worth because she needs to replace the lost certificate first. She's stuck in one-share-limbo because it doesn't seem worth the time or the money to transfer the share, but every three months she gets re-annoyed and we end up having yet another conversation about whether or not she should go through the process.

    What would you do?

    submitted by /u/FifiandColumbo
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    Forget NIO, what about NIU?

    Posted: 02 Nov 2020 11:12 AM PST

    Everyone is all over the place on NIO, but what do you guys think about NIU Technologies?

    It is a chinese EV scooter manufacturer (currently leading the EV market in China). Fundamentals look very good, they seem to be successfully expanding in Europe, and realize big growth numbers Year on Year.

    submitted by /u/Pristine_Spinach8718
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    Morning Market Synopsis - Monday, Nov. 2, 2020

    Posted: 02 Nov 2020 07:29 AM PST

    US equities higher: Dow +1.95%, S&P 500 +1.70%, Nasdaq +1.20%, Russell 2000 +1.66%

    • US equities seeing good gains in Monday morning trading after selling off sharply last week, suffering their biggest decline since the depths of the coronavirus crisis in March. Not much sector dispersion. Materials, industrials, financials the standouts. Treasuries mostly stronger after yields backed up last week despite the equity selloff. Dollar a bit firmer on the major crosses. Gold up 0.5%. WTI crude up 0.8%, reversing some early weakness, after falling more than 10% last week.
    • Nothing specific behind the bounce. Headlines remain fairly cautious with the focus on worsening coronavirus trends and additional lockdown measures in Europe though some thoughts these were concerns were largely priced in last week. Election uncertainty another theme as while Biden maintains a steady lead in the national polls into tomorrow's election, the battleground states are tighter, a surge of mail-in ballots threatens to delay some key results, legal challenges are looming and Trump may reportedly look to declare victory on Tuesday night if it looks like he's "ahead". Senate control another big issue given it will play key role in size and scope of another stimulus package.
    • Coronavirus and election largely overshadowing the other notable headlines. October ISM manufacturing beat, highest since Aug-18 with new orders a highlight. Quiet earnings day but results continue to largely surprise to the upside. According to FactSet, 86% of reporters have surpassed EPS expectations and in aggregate, companies are beating earnings by more than 19%. October global manufacturing PMIs tended to beat expectations with most showing sequential improvement from September. This week's FOMC meeting should be a non-event though WSJ discussed how Fed will likely be thinking about shifting the composition of Treasury purchases if more stimulus is needed down the road.
    • EL-US beat with Skincare and boost from China travel retail in focus. CLX-US beat with all four segments posting double-digit growth and company raised guidance. ON-US beat and guided above but some focus on higher opex, internal inventory reduction and elevated expectations. DNKN-US going private for nearly $8.8B. NLSN-US announced sale of global connect business for $2.7B and raised guidance. NCLH-US said voyage suspension will be extended through December. USFD-US missed and didn't offer guidance. GNW-US said China's Oceanwide has made progress on deal financing. EIGI-US to be taken private in $3B deal.

    Notable Gainers:

    • +62.1% EIGI-US (Endurance International): Agreed to be acquired by Clearlake Capital Group L.P. for $9.50 per share in cash in a deal valued at ~$3B, including debt; represents a 63.5% premium to prior close and 79% premium to price before media speculation about a deal.
    • +13.9% CWH-US (Camping World): Q3 EPS, EBITDA beat; revenue ahead with all segments better than consensus; raised FY20 EBITDA guidance ahead of Street, announced $100M repurchase program; management highlighted demand momentum continuing from Q2, margin growth from expense controls.
    • +7.3% NLSN-US (Nielsen Holdings): Announced sale of global connect business to Advent for $2.7B; to license Nielsen name to Advent for 20 years, use proceeds to reduce debt; Q3 EPS, EBITDA, revenue ahead; raised FY20 EPS, EBITDA, FCF guidance.
    • +6.3% DNKN-US (Dunkin' Brands): Agreed to be taken private by Inspire Brands for $106.50 per share in cash in a deal valued at $11.3B, including debt; represents a 6.8% premium to prior close though NYT reported on 25-Oct the two sides were close to a deal at $106.50 a share.
    • +6.3% CLX-US (Clorox): Big fiscal Q1 EPS beat with 27% organic growth vs 18% consensus; all four segments ahead with organic growth of at least 17%; Health and Wellness and Household the standouts; raised FY revenue growth and EPS guidance; still sees deceleration in back half of the fiscal year; takeaways highlighted leverage to coronavirus-driven at-home trends.
    • +3.1% EL-US (Estée Lauder): FQ1 earnings beat strongly with revenue a bit ahead and FQ2 guidance mixed; analysts noted gross margin expansion, strength in Skincare while Makeup remained weak but showed improvement, boost from China travel retail; increased dividend.
    • +2.7% GNW-US (Genworth Financial): Announced that China's Oceanwide has made significant progress on deal financing and hopes to finalize in time to close the transaction by 30-Nov without the need for an additional extension.

    Notable Decliners:

    • -6.6% NCLH-US (Norwegian Cruise Line Holdings): Announced that voyage suspension will be extended through December for its three cruise brands; will continue to work with global government and health authorities to protect guests, crew and communities visited.
    • -4% OLLI-US (Ollie's Bargain Outlet): Downgraded to underweight from overweight at Wells Fargo; noted challenges as Covid-related tailwinds slow, sees opportunity for large close-out buying event narrowing, 2021 consensus appears optimistic.
    • -3.5% ON-US (ON Semiconductor): Q3 revenue and EPS better; auto a bright spot; Q4 guidance also ahead; opex and opex guidance flagged as disappointments; also some discussion about dampened momentum from internal inventory reduction efforts and headwinds from trade tensions; some takeaways also noted magnitude of the beat may have underwhelmed against elevated expectations.
    • -2.8% USFD-US (US Foods): Q3 earnings and revenue missed; noted declines in both net sales and case volume though said trends improved throughout the Q; margins hit by changes to customer mix and lower logistics income; offered no guidance.
    • -1% HZNP-US (Horizon Therapeutics): Q3 earnings and revenue better though GM a touch light; highlighted continued Tepezza outperformance; said fewer in-person ophthalmology appointments depressing demand; raised FY guidance ranges; announced investments in expanded field organization.

    09:29:25 AM CST on 02 Nov '20

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    Here is a Market Recap for today Monday, November 2, 2020. Please enjoy!

    Posted: 02 Nov 2020 01:05 PM PST

    PsychoMarket Recap - Monday, November 2, 2020

    Stocks opened today's session higher before paring some gains ahead of an extremely busy week, with market participants closely monitoring the results of the US presidential election, a meeting of the Federal Reserve, and the October jobs report, and rising coronavirus numbers in the US and Europe.

    After an extremely choppy day, the Nasdaq (QQQ) finished 0.22% up, the S&P 500 (SPY) finished 1.11% up, and the Dow Jones (DIA) performed the best, finishing 1.56% up.

    On Tuesday is the US presidential election between incumbent Donald Trump and Democrat Joe Biden. Needless to say, given the political divide, the coronavirus pandemic, and social unrest that exists in the United States right now, the outcome of this election will be extremely significant. According to a study done by Edward Jones, since 1932, the stock market has dipped 64% percent of the time the day after a presidential election. This likely reflects anxiety about the future if a large cohort of the population is unhappy with the election result. Regardless of the election result, it's likely a large section of the population will be unhappy. Moreover, given the surge of early and mail-in ballots due to the pandemic, the possibility exists that the outcome may not be clear after Tuesday. This scenario would certainly cause a massive spike in volatility and uncertainty in the markets. According to the US Elections Project at the University of Florida, as of Friday of last week, around 85 million individuals have cast their ballots, over half of the total turnout in 2016. If this pace picks up, this election could have the highest voter participation rate in over 100 years.

    Regardless of the outcome, the election will have a number of consequences for Corporate America. For example, a change in the political control in either the Senate or the White House (which are Republican-controlled right now) could potentially alter corporate tax rates, increase or decrease regulation in some industries, affect trade relations with other countries, and changes in capital gains tax, which is important for market participants. Moreover, the outcome of the election will likely influence the timing and size of much-needed additional fiscal stimulus

    The Federal Open Market Committee (FOMC) is set to hold the first of its two-day rate-setting meeting the day after Election Day, with the twelve FOMC meeting Wednesday and monetary policy statement and press conference from Federal Reserve Chair Jerome Powell on Thursday. Going off previous meetings, the Fed is virtually guaranteed to keep interest rates, near zero. After their last meeting in September, the Fed signaled that it would maintain interest rates are current levels until "at least 2023". Throughout these meetings, FOMC members, including Powell, have increasingly escalated their calls for further fiscal stimulus to complement the Fed's monetary support. In early October, Powell said, "too little support would lead to a weak recovery, creating unnecessary hardships for households and businesses."

    On Friday, the Department of Labor is set to release the October job report, a crucial piece of data to understand the state of the labor market and gauge the pace of recovery. According to Bloomberg consensus data, non-farm payrolls are expected to increase by around 600,000. While this estimate would the sixth month of net payroll gains, it would also be the four, straight month of deceleration, indicating the pace of recovery is slowing. The unemployment rate is also predicted to tick lower, from 7.9% to 7.6%. However, worryingly, there appears to be a trend towards long-term unemployment for many Americans. The number of individuals filing continuing claims, people filing for unemployment benefits who have already filed an initial claim, has continued to increase the past several weeks. This means that people who lost their job due to the pandemic are having an increasing harder time finding new employment quickly.

    The US just set a new record for the highest seven-day average of daily new cases: 81,336 as of Sunday. That's the first time the number has ever topped 80,000, according to data from Johns Hopkins University. new cases are far exceeding new testing. Over the past week, new cases have increased 18%, according to Johns Hopkins. But the number of new tests performed has increased only 4.29%, according to the Covid Tracking Project.

    Last week, Europe recorded around 1.5 million new cases of coronavirus, a new record, according to data from Johns Hopkins. Trends are worrying across the continent now, including in countries such as Greece and the Czech Republic, where infection rates had been low until recently. Measures are tightening up everywhere. England, in response to the surge, announced a nationwide lockdown for at least the next four weeks.

    Highlights

    • Apple (AAPL) announced on Monday an event for Nov. 10 where it's expected to announce new Macs that are powered by their own chips powered by ARM processors, instead of the Intel chips it had been using. Could impact Nvidia (NVDA) stock, which owns ARM chips, and Intel, who has not been doing very well lately, judging from last earnings report and stock price action (INTC).
    • Images for the updated Tesla Cybertruck could come next Musk, according to CEO Elon Musk.
    • Chinese electric vehicle maker NIO announced its October deliveries, and the number has shares on the move, again. NIO delivered 5,055 vehicles in October, doubling from a year ago. The result is doubly impressive because NIO very recently raised its manufacturing capacity to 5,000 vehicles a month. The company is selling all the cars it can make. This stock is an absolute monster and is one we love at PsychoTrader!
    • Alibaba (BABA), is doubling its Singles' Day offerings this year, running the massive online sales event across two periods rather than one. Alibaba says it expanded the shopping window for Singles' Day to provide more relief for merchants that have been hit hard by the pandemic. Single's day is a counter to Valentine's Day that celebrates being single. Normally it's held on Nov 11. This is the world's largest shopping festival. According to Fortune Magazine, BABA shipped $38.4 billion in gross merchandise value on Singles' Day last year. Amazon's Prime Day, by comparison, sold around $6 billion in goods last year.
    • Asian shares were mostly higher on Monday buoyed by further signs of recovery in China's manufacturing sector. The Caixin manufacturing PMI, a major indicator for China's manufacturing sector, rose in October, showing that domestic demand is holding up, reports said over the weekend.
    • Allegiant Travel (ALGT) upgraded by Morgan Stanley (MS) to $175 OVERWEIGHT. Stock currently around $131
    • Alibaba (BABA) target raised by Keycorp from $330 to $350 OVERWEIGHT. Stock currently around $310
    • ChampionX (CHX) target raised by Barclays from $16 to $19 OUTPERFORM. Notable because stock currently around $9
    • Carvana (CVNA) target raised by Morgan Stanley (MS) from $215 to $225. Stock currently around $190.
    • Floor & Decor (FND) target raised by Raymond James from $75 to $100. Stock currently around $75.
    • Alphabet (GOOG, $GOOGL) target rasied by Argus from $1620 to $1850 at BUY. Stock currently around $1650.
    • Cloudfare (NET) target raised by two notable institutions. Stock currently around $53.
      • Royal Bank of Canada frm $50 to $55 OUTPERFROM
      • Oppenheimer from $55 to $65 OUTPERFORM
    • Peleton (PTON) target raised by Needham from $110 to $125 at BUY. Stock currently around $115.
    • Paypal (PYPL) target raised by Morgan Stanley (MS) from $210 to $229 at OUTPERFORM. Stock currently around $192.
    • Solaredge (SEDG) with massive target increase by Roth Capital from $191 to $300 at BUY. Stock currently around $266.
    • Vipshop (VIPS) target raised by Keycorp from $22 to $24 at OUTPERFORM. Stock currently around $21. This is one we have been looking at for a while

    "Strive not to be a success, but rather to be of value." –Albert Einstein

    submitted by /u/psychotrader00
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    I Put Everything I Have Into Amazon Today.

    Posted: 02 Nov 2020 09:59 AM PST

    Just as the title says all my money is in Amazon now. I'm 21, in college, and managed to save 16k so I bought 5 shares of Amazon while it's below 3k. I know it's not much, but it's still a big move for me. Was this a a bad idea? Or would you do the same with the amount of money I have at my age?

    submitted by /u/mattm72
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    Anyone anticipating a tech sell-off tomorrow?

    Posted: 02 Nov 2020 08:33 AM PST

    Looking at the charts, this seems to have already started in the past hour, but I'm interested in hearing some viewpoints on how everyone's approaching tomorrow's election. It's seeming more likely that the rest of the week will be a total clusterf*** where no winner is determined.

    submitted by /u/arigoldjr
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    Cloudflare ($NET) releasing earnings on 11/5, thoughts?

    Posted: 02 Nov 2020 08:11 AM PST

    Expected earnings are between $102.5 and $103.5 million.

    They have 3 million+ paying/non-paying customers, 96,000 of which are paying, with 637 large customers ($100,000+/year).

    They're pretty diverse in terms of customer base so don't expect a Fastly fiasco (losing Tik-Tik), however, they have exposure to small and medium sized businesses which may have affected their revenue this quarter.

    Personally, I'm expecting an earnings beat due to WFH and many stores going virtual, plus their new security offerings.

    I'm long NET with options expiring Dec 2020, Jan 2021, Jan 2022, and Jan 2023. I'm gonna hodl through elections + earnings. How bout you?

    https://finance.yahoo.com/news/whats-store-cloudflare-net-earnings-135701644.html

    submitted by /u/Unbiasedtruth2016
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    Favorite Solar Stock(s)?

    Posted: 01 Nov 2020 03:46 PM PST

    Hey there, I was wondering what everyone's preference is on individual solar stocks? I especially like the P/E ratio of CSIQ, but have been keeping an eye on others such as FSLR, JKS, and RUN. Thoughts?

    submitted by /u/CybrDunce
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    Solar Stocks - JKS Vs CSIQ

    Posted: 02 Nov 2020 10:55 AM PST

    Can anyone provide any insights on Canadian Solar (CSIQ) Vs JinkoSolar (JKS)?

    CSIQ has great exposure to different regions around the world, consistently beats earnings estimates, P/E 8.5, 4.25 EPS, current ratio over 1, and great solar cell technology. JKS is also another great play, they've have some big contracts closing in Europe and as a Chinese stock, has good exposure to a massive market.

    I think these are both good plays in the Solar sector but why is JKS outperforming CSIQ so much? From my (really really ) limited knowledge, it seems that CSIQ is more undervalued than JKS but JKS has gone on an absolute tear the past two months. Which company has a better outlook? Really looking for some diverse opinions.

    submitted by /u/Hey_Tha
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    Looking for Non-Tech Growth Stock recommendations for diversifying my portfolio

    Posted: 02 Nov 2020 01:48 PM PST

    I'm quite heavy in tech, and if tomorrow is deep in the red I'd like to take advantage of non-tech stocks to diversify my portfolio. I am interested in non-tech growth stocks that are little to no risk (too-big-to-fail) companies, and stocks that are of the buy and hold forever type. Any recommendations are much appreciated.

    submitted by /u/NRJL1983
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    Stock market news, updates & predictions , Should you Buy or Sell Now? [2-11-2020]

    Posted: 02 Nov 2020 06:15 AM PST

    So Friday we saw the stock market down again as the dow fell almost 0,6% percent while the s&p fell over 1% and the nasdaq was crushed being down almost 2and a half percent as This last week we saw the dow fell 6,5% the s&p 5,6% and the nasdaq 5,5% as all 3 ended the month of october down more than 2,3%

    One good thing for the US economy is that the retail stores sales has recovered and consumers are still spending excess cash especially with the holidays and black Friday up next. I believe that as much as Tuesday is important for the economy, the events that will come later in the week as the FED holds two important meatings and the latest jobs report comes in at the end of the week far outweight that

    As you can see the New York Federal bank economic index is still rising, that sugests a V-Shaped recovery is continuing in the US. This index takes into consideration lots of important data from the economy.

    The unemployment in the US has been decling but that rate has sharply slowed down in the last months as it's still more than double the 3,5% at the start of the year as the latest number from September was almost 8% rate of unemployment.

    As you can see the most affected people are still the middle and low wage under 60k/year. As the high wage jobs unemployment rate is barely down 0,5% since January.

    So the fear in the stock market saw a huge pop in the last week as the VIX (the volatility index) rose from 27,55 more than 10 points to close at over 38 this last week. This next week is probably the last with such high volatility as the upcoming big events will pass and more certainty will be in front of us . The volatility was so high as we retested the June highs and have seen a pullback 3 times after hiting those levels.

    Despite strong earnings last week from all big tech companies (Alphabet,Amazon,Apple, facebook and Microsoft) the companies stocks dropped amid the broader stock market sell-off with the exception of Google which posted terrific numbers to crush analysts expectation.

    Apple is down almost 19% since the highs of September and has lost 450 billion dollars in market cap since then.

    This dropped in the company has been caused by a broader stock market sell off as well as missed iphone revenues. I do believe that iphone revenues will see a huge spike in the next coming quarters as apple customers as myself will finally upgrade from older iphone to this next generation iphone which is the first to have 5G technology as well as other great improvements in capability as well as camera.

    A couple analysts have recently changed they're target to between 132-140 which is over 20$ from where it sit's today. That is quite good upside for the company.

    As you can see they are barely down 2,7% year over year in product revenue despite not having the new iphone launch included in this financials, and overall the company still saw a 1% increase in revenue due to the huge spike in services revenue that I believe will continue especially with the Apple One bundle just being launched at the end of last week. The Total Gross margin also increase slightly but I expect this to be just a small drawback in the short-term.

    Also I believe that Amazon was dragged down because of the next quarter predictions of huge costs while they only forecasted a operating income of 1 to 4 point 5 billion dollars which is below what was anticipated despite amazon web services continuing to be the largest player in cloud spending. With a 32% share of total market and a revenue of 11,6 billion dollars which Is up 29% year over year, while Azure from Microsoft comes in second and google cloud in third. There is still a lot of room to grow for all of this companies as there is still over 37% of the market provided by other companies. Also this is a great company to own for the long term as digitazation and online commerce will continue to grow, some are estimating that by 2030 amazon could have annual revenues of 1 trillion dollars $ while using conservative projections of compound annual growth for e-commerce of 10%, for the cloud services of 15% and for ad revenue of 20%, amazon could hit that mark by then. But I believe this is possible even faster than that.

    Facebook is the one company that I will have to analyze more in this group. They will be hit with privacy issues do to the regulatory risk and Apple's announced privacy changes. But I still do believe this to be a great company as they also own Instagram, and I really like how that part of the company is innovating and growing.

    While google seems to be back on track as the company was the laggard in the group. They have become less reliant on the search ad revenue as growth in Youtube ads and Google cloud will push the company to renewed growth in the future.

    Alibaba will see two big events this week as they will kick off the singles day event next week, extending the event with 3 more days rather than the usual 24-hour event, in which they will also double the products on offer. Also another big event will be the IPO of ant Group in which Alibaba will still have a big stake. I believe they are a great company the forward revenue growth estimates of 31% are higher than other tech companies like amazon, google and Microsoft while the P/E for the company is the most attractive of the group also.

    Ford just announced that late next year they will introduce a lower priced competitor for Tesla AutoPilot and GM's super cruise, this is great news for the company as they seem to be improving the company continuasly.

    Some important earnings coming this week are :

    Paypal on Monday, which I believe is the greatest fin-tech company, on

    Wednesday Qualcomm will announce that will be a great insight to see what Apple's iphone 12 is doing as Qualcomm is the biggest supplier for apple and on Thursday Alibaba (with ant group ipo) coming also on the same day this stock could see a surge in value.

    submitted by /u/0toHeroInvesting
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    Market and Options Summary for November 2nd, 2020

    Posted: 02 Nov 2020 01:51 PM PST

    Daily Synopsis

    • The S&P 500 increased +1.12% today while the NASDaq had a small gain of (+0.23%). The Russell 2000 rose by (+1.78%). The Dow ended in positive territory at (+1.56%)
    • The best performing sector was Energy(+3.41%) while Communication Services(-0.05%)was the worst performer.
    • At the other end, the information technology (+0.3%), consumer discretionary (+0.3%), and communication services (+0.1%) sectors struggled to keep pace due to renewed selling pressure in their mega-cap components, which were also among the weakest performers last week.
    • Note, the session high for the S&P 500 was set in the first hour of trading. The lack of follow-through buying suggested that the market retained a wait-and-see mindset for the presidential election tomorrow. News that Massachusetts announced a stay-at-home order might have also tempered gains in the cyclical stocks.
    • In earnings news, Clorox (CLX 216.03, +8.78, +4.2%) was a clear winner as the company continued to benefit from strong demand caused by the pandemic. In addition to beating revenue estimates, the company guided FY21 revenue above consensus.
    • U.S. Treasuries finished mixed and little changed. The 2-yr yield increased one basis point to 0.16%, and the 10-yr yield declined one basis point to 0.85%. The U.S. Dollar Index finished little changed at 94.06. ## Index Summary S&P 500 : (+1.12%); NasDaq : (+0.23%); \ Russell 2000 : (+1.78%); Dow : (+1.56%); \ Vix : 38.02 (-2.34%); [+14.39%]; {+26.51%} ## Sectors Summary Three highest sectors for today were - \ Energy: (+3.41%); Materials: (+3.32%); Industrials: (+2.7%) \ Three lowest sectors for today were -\ Communication Services: (-0.05%); Information Technology: (+0.25%); Consumer Discretionary: (+0.71%) ## Commodities/Futures (1-day %), [5-day %], {10-day %} \ Currency - \ USD Index : 94.042 (+0.03%); [+0.71%]; {+1.19%}\ BC : 13735 (+0.22%); [+4.48%]; {+4.64%} \ Precious Metals -\ Gold : 1879.9 (+0.87%); [+1.07%]; {-0.25%}\ Silver : 23.646 (+2.13%); [+3.54%]; {-2.09%}\ Farming - \ Soybeans : 1056.25 (-0.43%); [-0.52%]; {-2.05%}
      Corn : 398.5 (-0.63%); [-1.37%]; {-4.86%} \ ** Coffee :106.85 (-1.73%); [0.0%]; {-1.59%} \ _Industrials -_ \ **Crude : 35.79 (+3.21%); [-1.2%]; {-9.1%} \ ** Nat Gas :3.354 (-3.58%); [+7.94%]; {+7.55%} \ **Copper : 3.0475 (+1.25%); [+0.93%]; {-2.05%} ## Dark Pool Summary - Highest Dark Pool buys by rank -
    • DNKN 14 buys totaling 4,965,083 shares. Average Price : 106.01, Cost : $526,346,518
    • WFC 3 buys totaling 19,741,200 shares. Average Price : 21.73, Cost : $428,913,104
    • CVNA 3 buys totaling 530,400 shares. Average Price : 183.5, Cost : $97,328,400
    • TSLA 1 buys totaling 200,160 shares. Average Price : 395.0, Cost : $79,063,200
    • MSFT 1 buys totaling 370,970 shares. Average Price : 201.42, Cost : $74,722,632 ## Options Fast Facts - CBOE Put/Call Ratio - 0.77\ Highest Multiple Over Daily Average- PAGP with 15x the ADV of 1943. There were 28364 calls and 149 puts. \ Ticker with Most Contracts -WFC with 351225 contracts traded today with an AVD of 143857. There were 258177 calls and 93048 puts.\ Largest Put / Call Ratio - BKLN with a 1360 P/C ratio. There were 23120puts and 17 calls. \ Largest Call / Put Ratio - HCC with a2103 C/P ratio. There were 16824 calls and 8 puts. *Stocks must be >$6, Highest Multiple must have >1k ADV, Largest ratios must have an option volume >10k
    submitted by /u/NoeticOptions
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    The Future of Investing

    Posted: 02 Nov 2020 09:55 AM PST

    Hello r/stocks.

    This message was originally ritten for WSB, but I think its potentially more valuable in this sub.

    I think I speak for all of us when I say I love a good picture of people's stock portfolio going from $200 to $500k(rags to riches) as much as I love a $10 mil to $40 (eat the rich!). But I think we can all agree that this community has the power to be much more than that. In a time when politics is turbulent, friends are distant, and families only exist on a screen, a lot of us can agree that the world is not moving in a direction we like. But that path does not have to continue. We can change it.

    We have the power to invest our money as a collective unit and shift the economic trajectory of the world for the better.

    This is the state of affairs as I see it.

    The Problem:

    Investor side

    Investing is more accessible than it has ever been, but that accessibility has also led to instability. WSB amongst other investor "strategies" has made "get rich or die trying" the narrative of the NYSE. The stock market and Robinhood are just another dopamine slot machine with a knob to be turned a la Instagram, Facebook, Youtube, Netflix, Amazon, any company that monetizes your attention. The capital swings steered by WSB and other new investors have shown an ability to shift the market enough for industries to notice, but we have yet to encourage companies to make changes towards a common goal.

    Stock market Side

    The stock market currently functions to incentivize rapid growth rather than sustainable business plans and continue to improve upon themselves with time. From the massive explosions in the valuations of Apple and Tesla to the massive IPO and inevitable bust of companies like Uber, Peloton, and Fitbit, modern investment strategy seems to follow companies that we think other people think will do well. This pushes companies to tout false narratives of growth and unchecked consumption of resources by these companies (energy, water, labor, land, etc.

    The Political Side (US)

    If you are from the US, you are likely tired of hearing that this election is "the most important election of our generation". This is not about who anyone wants to win, it is about the amount of influence we have over these candidates. Regardless of who the next President is, the state of the economy, and by (some) extension, the stock market will shape the way they view, regulate, and interact with the market

    Resolution

    The solution to these problems seems apparent to me and I hope you see it too. Now, more than ever, we should be trying to utilize this powerful capital and steer politics with our wallets. Companies are in a position to pivot and respond to markets, politicians are listening to the people, and we have enough combined capital to have SOME effect on the market. This does not mean putting all your money in FAANG or TSLA because they keep climbing. It means doing research, diversifying into stable ETFs, and investing based upon your expectation 10-20 years from now. I can not tell you what that future is, but I think we can all agree it is different from the present.

    Call to action

    This is where everyone can play a part in this. My hope for this post is that it is a space for healthy conversations about what the future of our planet can look like and what investments can help put us there. I do not expect everyone to have the same view for the future, but I do hope that we can all better understand how our views and our investments can align. As people post recommendations of their worldviews and the ETFs that fit into that, I encourage others to weigh in on the pros and cons of that ETF or that market as a whole. Next, I expect participants to vote when a good point is made. THIS IS KEY. A vote does not mean you agree or disagree with someone's point, it means that their statement adds another data point to the discussion and others should consider it. Downvotes should be used to combat misleading, false, and damaging content, not content that does not support our views.

    With that, I hope we can all start investing in the future, for the future, regardless of what that future looks like to each of us.

    Disclosure

    For the sake of transparency I should state that my investments are as follows:

    • 22% S&P
    • 38% Big Tech (Includes RSUs)
    • 21% BioTech and Pandemic related (includes ESPP)
    • 4% Alt food
    • 15% Alt Energy

    I hope to change this to a more future-oriented portfolio

    submitted by /u/Fasolakid
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    Top Market News - Monday, Nov. 2, 2020

    Posted: 02 Nov 2020 01:06 PM PST

    Value groups led gainers with growth groups lagging:

    • IOCs, drillers, refiners led energy higher. Materials were up with chemicals, containerboard, precious metals miners strongest. Industrials finished ahead as machinery, building materials and E&Cs were among the gainers though airlines weaker. Financials were higher with asset managers, insurance and consumer finance among the bright spots. Healthcare gained with hospitals and managed care better though biotech worse. Consumer staples outperformed on strength in beverages, food, and HPC spaces. Tech lagged on softness in semis, software, AAPL-US. Consumer discretionary underperformed on AMZN-US and department store losses along with mixed restaurant and cruiseline performance. Communication services underperforming with large media names lower (CMCSA-US, CHTR-US) and weakness in interactive names.

    Pennsylvania, mail-in ballots dominating election headlines ahead of Tuesday:

    • Biden's persistent lead in national polling taking a back seat to state data. NY Times/Siena College survey showed Biden 3 points ahead in Florida, 6 points ahead in Pennsylvania and Arizona, and 11 points ahead in Wisconsin (The Hill). Washington Post/ABC News poll showed Biden with a 7-point lead in Pennsylvania and Trump with a 2-point lead in Florida, while today's Reuters/Ipsos and Quinnipiac polls showed Biden with narrow edge in Florida. Final NBC/Marist poll shows a 5 point Biden lead in PA (and a tie in AZ). Multiple reports touched on the heightened importance of Pennsylvania (Washington Post, NY Times). Mail-in ballots another big issue as millions still have not been received in battleground states (WSJ) and could take days after election to count (WSJ). While Trump denied Axios report he would prematurely declare victory on election night, he signaled legal challenges to prevent ballots from being counted after election day (The Hill).

    US coronavirus cases hit nearly 100K, Fauci warns country poorly positioned ahead of winter:

    • US reported more than 89K coronavirus cases on Saturday, a decline from Friday's record high 99.3K infections. CNBC noted cases growing by 5% or more 43 states as of Friday while seven-day average of new cases surged almost 25% over the last week to a record high of more than 78K. Seven-day average of hospitalizations also hit a record high in 18 states with the Midwest a particular area of concern. Colder weather, school and business reopenings, indoor gatherings of friends and families and general coronavirus fatigue all blamed. Health officials continue to sound the alarm with Dr. Fauci saying US could not possibly be positioned more poorly going into the winter and that an abrupt change was needed in the US public health response (Washington Post). Fauci's comments were criticized by the White House and President Trump on Sunday suggested he may fire him after the election (CNBC).

    ISM manufacturing index highest in over two years:

    • ISM Manufacturing Index for October of 59.3 beat 56 estimate, up from prior month 55.4. New orders index up 7.7 at 67.9, production index up 2 at 63, employment index up 3.6 at 53.2, new export orders index up 1.4 at 55.7. Strongest reading since Sep-18 with manufacturers becoming more proficient at expanding output in light of Covid-related precautions. Elsewhere, October IHS Markit final manufacturing PMI of 53.4 slightly above flash reading of 53.3 and prior month 53.2. New orders and output accelerated though employment grew more slowly and export orders contracted for the first time since July. Business confidence remained historically subdued but picked up from September. Equipment makers stronger while consumer goods makers weaker. September construction spending of 0.3% m/m weaker than 1% expected and 0.8% prior reading.

    UK latest European country to go back to lockdowns, NY state to require negative test for visitors:

    • Fresh coronavirus mitigation measures continue to dominate the headlines with most of the focus on Europe. UK announced a second national lockdown that will begin on Thursday and last until 2-Dec. Pubs, bars, restaurants and non-essential retail across the nation will close, while people must stay at home unless they have a reason to leave (BBC). Greece (Reuters), Belgium (Bloomberg) and Austria (Reuters) among the other countries that have also followed France and Germany in implementing new lockdown measures. In the US, NY state announced that it will require visitors from most of the country to test negative for the coronavirus and quarantine for three days after entry before taking a second test on the fourth day (Bloomberg). Governor of New Jersey warned that he won't rule out another lockdown to stem the rise in coronavirus cases (The Hill)

    Global PMIs largely see sequential improvement in October:

    • China official manufacturing PMI slipped to 51.4 in October from 51.5 in September but slightly better than the 51.3 consensus and representing the eighth straight month of expansion. In addition, Caixin manufacturing PMI improved to 53.6 from 52.8, better than the 52.8 consensus. Marked sixth straight month of expansion and highest reading in nearly a decade. Japan manufacturing PMI improved to 48.7 in final October reading from 48.0 flash and 47.7 in prior month though remained in contraction for a record 18th straight month. Eurozone manufacturing PMI revised up to 54.8 in final October reading, up from 54.4 flash and 53.7 in September and the best reading in 274 months. Germany a particular standout with fastest expansion in 31 months though press reports also highlighted risk from resurgence in coronavirus cases and accompanying lockdowns.

    Big beat rates, high bar, unchanged themes and virus and election complications:

    • Nearly 65% of the S&P 500 has now reported Q3 results. According to FactSet, more than 86% have surpassed consensus earnings estimates, well above the 73% one- and five-year averages. In aggregate, companies are reporting earnings over 19% above expectations, much better than the 8.0% and 5.6% one- and five-year average positive surprise rates. Companies leveraged to at-home trends (work, learn, watch, eat) have reported some of the best results. Cloud, auto and housing exposure have provided a tailwind while Q3 has also seen a rebound in digital ad spending. Travel, cross-border and urban exposure have remained big headwinds. Post-earnings price action has been influenced a number of factors, including a high bar/expectations, sustainability and more macro-leaning influences such as worsening coronavirus trends and election uncertainty.

    Fed focus likely to shift to asset purchase composition:

    • WSJ previewed this week's Fed meeting. Noted while Fed not expected to announce any changes, it could review plans to provide additional support. Most obvious move for the Fed would be to shift the composition of asset purchases toward longer-dated Treasuries. Pointed out that the Fed is buying $120B a month of Treasury and MBS, more than the $85B pace at which it purchased assets in QE3 between 2012 and 2014. However, while QE3 was focused on long-term securities, Fed is currently buying equal amounts of short-, medium- and long-term debt. However, article also discussed thoughts that shifting the composition of purchases may not do much at this point given long-term yields are already depressed. Perceived lack of urgency to adjust QE program played into some concerns about "peak Fed" coming out of the September FOMC meeting.
    submitted by /u/spacej3di
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    What do you all think of Morgan Stanley?

    Posted: 02 Nov 2020 07:46 AM PST

    I have a position in Morgan Stanley. I know financials have been depressed this year, but all the fundamentals I can see for Morgan Stanley seem really positive. Their earnings are good and I like their recent Eaton Vance acquisition.

    But for all the positivity, the stock has been dragging and holds around or even just below $50/share. What do you all think of Morgan Stanley over the next 5 years?

    submitted by /u/Didntlikedefaultname
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    I made simple spreadsheet for averaging down. I'm using it myself for about a month updating all the way and would be glad to have some feedback on how it can be improved.

    Posted: 02 Nov 2020 09:07 AM PST

    I made simple spreadsheet for averaging down that helped me and might also be useful for someone on this sub. I'm using it myself and would be glad to have some feedback how it can be improved.

    Had to copy text from the title for otherwise the automod deleted this post for being low-effort.

    Averaging spreadsheet. Just copy to Google Docs and replace the data with your's.

    submitted by /u/imgoodenuf
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    Royal Caribbean cancels December 2020 cruises while preparing to restart

    Posted: 02 Nov 2020 02:26 PM PST

    What’s the catch with TLT

    Posted: 02 Nov 2020 10:25 AM PST

    Ticker TLT is a treasury bond ETF that went up in March and has since been holding. Has been on a steady uptrend for a very long time, and holding between 160-170 between March-present. Now why in the fuck would the premiums be so high. ATM is around 220 and 20 delta is about 75. Now before you say, oh the volume is low, oh no. It's not, it's high and the bid ask spread is fairly tight. Is this just a gold mine or is supposed to drop super bad or be super volatile. The put call cost ratio is about the same, so it doesn't seem like it should just plummet. I can't figure it out.

    submitted by /u/YaBoiBryson27
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    Altria - Multi Billion Opportunity Yielding 10%

    Posted: 02 Nov 2020 06:56 AM PST

    I'm not sure how Altria is yielding 10% and investors haven't snatched this up? Does anyone know what I am missing?

    The stock has been destroyed -> cashflow and revenue are solid and people are still smoking. Decline in smoking rates is very slow. Altria has investments in JUUL, Cronos, AbInbev...all the sin stocks. Sure some ESG funds can't invest but at a 10% dividend yield in this ultra low environment and near all time low share price - I'm not sure what I am missing. Do you?

    submitted by /u/ibankerMA
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    Election VIXY Play?

    Posted: 02 Nov 2020 08:06 AM PST

    Hello,

    With the election tomorrow, does the potential for civil unrest and a disputed election make a potential short term investment into VIXY an ok idea?

    I realize its a gamble not an investment strategy, essentially built around the assumption that one of the candidates will not concede and will start a chain of uncertainty.

    But what do people think? I am a new investor so I wanted to get some opinions.

    submitted by /u/_Ellimist_
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