• Breaking News

    Saturday, October 2, 2021

    Stocks - September is over, let's all throw a party!

    Stocks - September is over, let's all throw a party!


    September is over, let's all throw a party!

    Posted: 02 Oct 2021 09:40 AM PDT

    September, the worst month of the year for investing is over, so let's all throw a party. Some analysts consider that the negative effect on markets in September is attributable to seasonal behavioral bias as investors change their portfolios at the end of summer to cash in their profits.

    Another reason could be that most mutual funds cash in their holdings to harvest tax losses. Another particular theory points to the fact the summer months usually have lightly traded volumes, as a good number of investors usually take vacation time and refrain from actively trading their portfolios during this downtime.

    Once the fall season begins and these vacationing investors return to work, they exit positions they had been planning on selling. When this occurs, the market experiences increased selling pressure and, thus, an overall decline.

    But September is over, which can only mean green October bright November and lime December

    submitted by /u/gorays21
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    Tesla delivers 241,300 cars in Q3 2021

    Posted: 02 Oct 2021 10:23 AM PDT

    Tesla has bucked the wider trend of declining sales brought on by the global chip shortage in the third quarter this year, as it sold 241,300 cars — a total of 102,000 more vehicles than the same quarter last year. It's the most Tesla has ever sold in a quarter (and for some added perspective, the company sold 367,500 in all of 2019).

    The company managed to deliver more vehicles once again despite the fact that major automakers saw huge drops this past quarter. General Motors, the largest automaker in the US, said Friday morning that it only sold 446,997 vehicles in the third quarter — a 33 percent drop from the same period last year.

    Tesla has avoided similar problems in part because it has been sourcing different semiconductors and rewriting software on the fly to make those chips work in place of the ones not currently available. Beyond that, the company continues to see strong sales in China, where it started making and selling vehicles in early 2020. The Model Y SUV has also become a popular option in the United States, and Tesla just started selling them in Europe, too.

    Edit: If Tesla increases production by another 73% by Q3 2022 they will be producing 416,000 vehicles a quarter. If GM sells only 6.5% less vehicles Q3 of next year than Tesla and GM will have the same production numbers. Something to keep in mind.

    https://www.theverge.com/2021/10/2/22704830/tesla-sold-241300-cars-third-quarter

    submitted by /u/redmars1234
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    What I'm seeing with supply chain disruptions: Sep '21 edition

    Posted: 02 Oct 2021 10:25 AM PDT

    See my prior post for a primer on how I monitor supply-chain disruptions: How to monitor the supply chain disruptions : stocks (reddit.com)

    1. What respondents are saying (ISM Manufacturing Index)

    • "Many electronic components and assemblies shortages showing up (due to) port issues, lack of containers and other issues. Problematic, but nothing completely shut down yet. Watching COVID-19 restrictions country by country."
    • "In the U.S., labor availability is the most significant supply challenge for our company, with raw materials just behind. Plastic resin, polyurethanes, small-volume steel purchases and electronics are the biggest material challenges."
    • "Ocean freight delays creating disruptions in many areas. Southeast Asia supply continues to be challenged due to COVID-19 outbreaks."
    • "Customer demand continues to swell as we prepare for the fourth quarter, and overall growth has been extremely good for the year. Supply chain concerns are growing beyond electronics and chips into most other commodities. Lead times are extending, shipping lanes are slowing, and we will not see an end to this in 2021."
    • "Our company's entire supply chain continues to have significant challenges getting manpower, which is impacting production of parts and ability to meet daily build schedules. Additionally, the logistics problems — especially port delays and a shortage of shipping containers — are significantly impacting inbound and outbound shipments. Raw materials costs still are at record highs, and we have raised customer pricing, with additional increases in the near future due to labor costs going up. Huge customer orders are nine months out (due to) backorders. Seeing this domestically and internationally."

    2. Supplier Deliveries (ISM Manufacturing Index)

    • It's at 73.4, up 3.9pp from last month.
    • That's not good because anything above 50 means it's difficult for suppliers to meet customer demands and a m/m increase means deliveries slowed even further compared to the previous month
    • The index continues to reflect suppliers' difficulties in meeting demand due to:
      • ongoing supplier hiring challenges
      • extended raw materials lead times at all tiers
      • increasing levels of input material shortages
      • stubbornly high prices
      • inconsistent transportation availability,"

    3. Customer' Inventories (ISM Manufacturing Index)

    • It's at 31.7, up 1.5pp from last month.
    • There was a m/m improvement, but the bottom-line is that's not good because anything below 50 means inventories for customers are too low.
    • This is the 14th consecutive month where the index has been at historically low levels

    4. Backlog of Orders (ISM Manufacturing Index)

    • It's at 64.8, down 3.4pp from last month.
    • Still not a good situation because anything above 50 means a backlog, which reflects production for manufacturers not keeping up with orders from customers hence why they're in the backlog.
    • But, there was a m/m improvement meaning backlogs expanded at a lower rate in September vs August & production was able to keep up with continuing strong new order levels

    5. # of container ships at anchor in Los Angles & Long Beach

    6. Freightos Baltic Index (FBX): Global Container Freight Index

    • Was $10.5K - $11.0K during Sep '21, up from ~$10.0K levels during Aug '21
    • Fewer ships available validated by # of container ships at anchor in California (mentioned above) means price of shipping of shipping is going up. Higher shipping costs makes it difficult for manufacturers to make goods and customers get the inventory they need to meet demand.

    Key takeaway: Backlogs and customer inventories improved for some, but it's still a negative situation. Port congestion has gotten worse and in response shipping costs has gone higher as well. Managers are still saying the same stuff: port issues, materials shortages, lack of labor, and high costs are making the job harder and making it difficult to meet high customer demands heading into the holidays.

    submitted by /u/ricke813
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    Making a short/medium term bull case based on technical analysis!

    Posted: 02 Oct 2021 07:04 AM PDT

    Hello traders!

    I am a swing trader by default and use technical analysis for all my decisions. Swing trading means my horizon is between days and weeks/a few months.

    What I want to do with this post is to make a case for a short-/medium term bottom purely based on TA.

    I understand that there are many investors out there that think TA is complete and utter garbage but my performance to date in 2 portfolios is 33 and 36% while the S&P 500 is "only' up 16% for the year. Please don't down vote me purely based on your hate for TA.

    So why would someone use TA? There was an article posted by a community member that insider trading is alive and well. The news are full of "old" news that someone else already knew before. The goal of TA is to find turning points based on those signals caused by insider trading.

    Remember: The market price reflects the true value based on every investors current knowledge.

    But lets move on to the bull case!

    Disclaimer: r/stocks does not allow me to add charts to this post so if you really have any questions message me please. I don't want to get banned! My goal is to educate as many investors as possible. If someone can let me know how to copy paste charts in here I would highly appreciate it.

    My favorite chart is the daily candlestick chart. I toggle between daily, 4h and weekly charts to get the best setup. I use 20, 50 and 200 moving averages, Bollinger Bands, Slow Stoch, MACD, RSI and momentum. Yes they are all almost the same but each of them gives me unique insight.

    Let's start with the VIX: It is a measure of fear and expected market volatility. VIX spiked 3-19-20 and a bottom was made 3-23-2020. We had 3 double spikes so far (1 week apart). One was 3-14-21. NDX 100 bottomed 3-15-21. We had another one in May that matched a bottom and we had one 3 days ago and NDX 100 might have bottomed then

    MACD: MACD reading were extremely low in March, May and last week for the NDX100. As long as we trade above the 200 day average those low readings support a short-/medium term bottom. The hammer candle Friday together with the low MACD reading made a bottom very likely.

    Russell 2000: I love the Russell 2000 because it gives you a less distorted picture of the US stock market because it is not only driven by a handful of tech companies. Russell 2000 went sideways for most of 2021 because we strayed to far from the 200 day average. We finally touched the 200 day average and last week we made a nice hammer candle in the weekly chart. This weeks weekly candle was undecided. In the daily chart we regained the 20, 50, 200 day average and a months long uptrend line. This should bode well for higher stock prices.

    Europe: FEZ touched the 200 day average and is very likely to bounce from here. German Index is in a huge bullflag pattern.

    I can comment on Asia separately but the correction there seems to have stopped.

    Summary: I think based on TA we are set up for a nice year end rally. How far we can go I have no clue but 10% should be possible. Then we have to reassess. This is just a short-/medium term prognosis.

    Happy to discuss. Please only serious discussions. Not: TA is bullshit etc. If you do it right it is working.

    Have a great weekend and Happy Trades!

    submitted by /u/Chart-trader
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    When to exit a position?

    Posted: 02 Oct 2021 10:00 AM PDT

    I made some hasty decisions back in the spring mania and ended up in some long positions that are now down 35-50%. Each have long term potential that I believe in, but after a few months of waiting I'm unsure whether they'll appreciate back to their frothy peaks anytime soon.

    When do you know to get out of a name? How do you establish acceptable loss?

    submitted by /u/Bitter_Instruction51
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    Connection between ETFs and Futures for those trading stocks

    Posted: 02 Oct 2021 08:35 AM PDT

    I understand the connection between futures and ETFs (e.g. SPY and /ES) but I've noticed that many look at /ES yet trade SPY. Why not just look at SPY, is it b/c /ES is out in front as an indicator of SPY?

    submitted by /u/shrickness
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    Luby’s(LUB) liquidation question.

    Posted: 02 Oct 2021 05:29 AM PDT

    The most recent number that I could find out the liquidation estimate at $4.13 but it's currently trading at about $4.65. Are people betting on the stock itself or on the possibility that the per-share liquidation price will jump again and they'll make money that way once the company wraps things up?I'm new at this and this is one thing that confused me.

    submitted by /u/Shatterstar23
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    How do etfs and spy work when you short it?

    Posted: 02 Oct 2021 06:15 AM PDT

    For example if i short spy for billions, does each individual companies share price within it get shorted?

    For example if I shorted spy for $5billy and tank it by a percentage, what happens if a company gets added to spy? Does it immediately feel the effects of those shorts and drop the price?

    submitted by /u/Helpthehelper1
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    institutional ownership in weedstocks

    Posted: 02 Oct 2021 10:48 AM PDT

    Company Price (USD) Marketcap (M) Float (M) Inst Holdings (% float) Buys Holds Sells Price Target (USD) % Upside
    MSOS
    CRLBF 8.95 3269 119.3 9.19 16 1 0 17.82 99.11
    AYRWF 26.08 1350.3 47.5 9.13 8 1 0 54.35 108.40
    GTBIF 27.57 6292.4 173.7 8.59 18 0 0 47.92 73.81
    TCNNF 27.73 3569.3 65.2 7.1 18 0 0 70.06 152.65
    CURLF 12.01 8450.4 515.2 0.72 16 0 0 22.16 84.51
    VRNOF 10.85 3326.7 120.4 0.43 7 0 0 33.72 210.78
    LPS
    VFF 8.35 714.6 74.2 33.33 7 1 0 18.03 115.93
    CRON 5.64 2105.3 203.5 30.25 2 8 3 7.1 25.89
    CGC 13.41 5274.8 248 27.1 3 12 3 20.73 54.59
    ACB 7.08 1402.7 195.9 19.48 0 10 7 6.42 -9.32
    TLRY 11.15 5133.8 441.2 14.15 5 14 2 16.17 45.02
    HEXO 1.82 518 270.2 10.79 3 5 3 3.82 109.89
    submitted by /u/mfairview
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    Up 12.000% on a low volume stock, now what?

    Posted: 01 Oct 2021 10:22 PM PDT

    Hello, I own shares in a company that went public earlier this year, about 5x the average daily volume. I earned the shares as an early employee of the company through a warrant program, and I'm now up +12,000.00%. I am no longer employed at the company, and don't need the money right away, but the company and its stock price aren't doing great.

    I'm not very experienced in the stock market, only have a few diverse index funds and some AAPL/MSFT shares.

    How can I turn this situation to my advantage?

    Thanks!

    submitted by /u/napale
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    Stock screener with column for ‘Price vs. 52 Week High’?

    Posted: 02 Oct 2021 08:51 AM PDT

    I want to screen stocks based on what percentage the price is of 52 wk high. The formula is : (Current Price - 52 week High) / 52 Week High. Is there a stock screener that supports adding a column for this and sorting by this value?

    submitted by /u/memeoic
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    FedEx - is this scenario profitable or not?

    Posted: 02 Oct 2021 05:22 AM PDT

    I would say that the so called supply chain crisis would make the service more expensive and, well managed, should reflect in the revenues/profits. But there is always the other side of the coin when, if the price keeps falling down, this situation will fit just fine.

    https://www.theguardian.com/business/2021/oct/02/supply-chain-world-economy-energy-labour-transport-covid

    submitted by /u/RomeoinA
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    Energy crisis plays?

    Posted: 02 Oct 2021 10:25 AM PDT

    I'm a pretty novice investor I won't lie. I've been investing for around a year and a half, I've been trying to follow trends and undoubtedly the biggest trend I've been seeing is the energy scarcity in Europe atm. Where could I research good strategies to capitalize on this? What are your thoughts on the energy issues in Europe?

    submitted by /u/laferrari2jambajuice
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    Rising bond yields: what they mean and how to play this

    Posted: 01 Oct 2021 04:45 PM PDT

    TL;DR: Rising bond yields means investors should rotate from growth to value. Avoid ARK ETFs at all costs, they have underperformed for a reason. We have yet to see capitulation.

    I'm sure you've all seen the headlines over the past week or so about rising bond yields, and I'm honestly surprised that the majority of investors I've talked to don't know how this affects their stock allocations. They read about the rising bond yields and how that hurts growth stocks, but the articles never dive into exactly why this happens. I felt compelled to write this post because I found out my mother put the majority of her 401K into QQQ, ARKK, and ARKG back in July. The recent downwards move in these names has her spooked, and on the phone she mentioned she has no idea why these ETFs (ARKK and ARKG in particular) are going down more than the rest of the market.

    To preface this post, this is not financial advice and I'm not a financial advisor. But I have been investing my own money for the better part of the past two decades and have seen long term success. I've learned a lot from my friends who work in the industry over the years so hopefully I can shed some light on how institutions, the ones driving the market, operate. I commonly rotate my investments based on what I've learned and macroeconomic variables in order to achieve a more optimal strategic positioning in the market.

    Now, onto rising bond yields. This site lets you see the yields for notes of various maturities: https://tradingeconomics.com/united-states/government-bond-yield. All of the bond yields have risen this past week, but the one of particular concern is the yield on the 2 YR treasury note. It hasn't been this high since March 2020, and analysts are projecting it will rise even higher.

    This move was fueled by fears of more persistent inflation, the upcoming taper that will begin after the November Fed meeting, and the prospect of rate hikes coming sooner than originally anticipated. The Fed isn't alone either. Central Banks all around the world have signaled plans to tighten monetary policy: the BoE for example https://www.ft.com/content/80de9d5d-42c5-47f0-bc86-a46d05291691, Brazil (except no one really cares about Brazil) https://www.centralbanking.com/central-banks/monetary-policy/monetary-policy-decisions/7863731/brazil-accelerates-tightening-cycle-with-100bp-rate-hike, and countries in the Eurozone https://www.reuters.com/article/eurozone-bonds/update-3-euro-zone-yields-continue-to-climb-after-german-election-idUSL1N2QT0JH.

    Fed officials at the most recent meeting moved up their expectations for a rate hike in 2022 and increased the number of rate hikes expected in 2023 (https://www.washingtonpost.com/us-policy/2021/09/22/fed-powell-taper-rate-hike/). If inflation continues to persist, which is likely due to strong demand-pull and supply-side constraints like the disruptions we're seeing in Southeast Asia due to Covid, then we'll see these rate hike expectations move forward even more. A higher federal funds rate results in higher bond yields.

    The market digested this information from last week and it is now being priced into the market. So why do growth stocks get hammered more than the rest of the market when bond yields rise? Even today, for October 1st, the NASDAQ rose 0.65% while the S&P 500 rose a whopping 1.23%.

    The reason is because of how companies are fundamentally valued. After all, the market isn't a casino, even though it can seem like it at times. Shout out to GME and AMC. So what does a company's stock price really represent?

    Fundamentally, a company's stock price represents the present value of its future cash flows. This valuation method is commonly used in the industry and is known as a discounted cash flow (read https://www.investopedia.com/terms/d/dcf.asp if you want to expand on this even more but I'll summarize). Basically, how do you calculate the present value of future cash flows? You take those future cash flows and you discount them by the risk free rate, often represented by bond yields. The reason we do this discounting is because that future cash flow is worth less BECAUSE it happens in the future. That money, if available in the present, could have generated the risk free rate each year.

    Let's look at an example to see how discounting works. Let us assume stock A is expected to produce cash flow of $100 in 2022, $200 in 2023, and $500 in 2024 and the risk free rate is 1%.

    We get: Discounted Cash Flow until 2024 = $100/1.01 + $200/(1.01)^2 + $500/(1.01)^3 = $780

    But what happens if the risk free rate increases to 2%?

    Then we get: Discounted Cash Flow until 2024 = $100/1.02 + $200/(1.02)^2 + $500/(1.02)^3 = $761

    The key takeaway from this is that rising bond yields mean future cash flows will be worth less at present. The reason growth stocks get so hammered on moves in bond yields is because the majority of their cash flow comes in the future, and that's why they can be valued so richly when bond yields are at record lows (like through all of 2020 and the beginning of 2021). Take Nikola, for example, it currently has no free cash flow but it's valued because it promises future free cash flow. Quantumscape, TuSimple, and so many more names fall into this category.

    Growth stocks have fallen out of favor for this reason and is why ARKK, ARKG, and all of the other ARK ETFs have already dropped over 20% from their all time highs. The concentration of growth stocks in the NASDAQ is also the reason for its underperformance this past week.

    Reddit forums always scream, "don't fight the FED," and they're right. For times like these, it's best to rotate out of growth and into value names. The Fed TELLS you what they're going to do and this past Fed meeting was the most hawkish Fed meeting I've listened to in a long time. I'm not claiming that markets will crash, far from it, I'm simply claiming that growth stocks are not where you want to be.

    This is going to hit a capitulation point when bond yields rise even more. This Twitter post shows the underperformance of ARKK's investments: https://twitter.com/TheMarketDog/status/1443154120047828994/photo/2. The only reason ARK is even alive is because of Tesla, and rising bond yields will eventually catch up to Tesla too, which is currently valued at 400x PE. You might be thinking now is a good time to pick up these names at a discount, but that would be ill-advised. If you're planning to hold for the next decade and through a potential 50-90% drawdown, then go ahead.

    There's a reason Michael Burry has been shorting ARKK (https://www.yahoo.com/now/ark-innovation-etf-sell-big-210000360.html) and one of the largest positions in his fund is a Tesla short (https://www.cnbc.com/2021/05/17/michael-burry-of-the-big-short-reveals-a-530-million-bet-against-tesla.html) specifically because he foresees an unfavorable environment for growth stocks.

    If you've been wondering why SPACs have been dying, this is why.

    If you've been wondering why your growth stocks have been dying, this is why.

    If you've been debating whether or not to sell your ARK ETFs, this is why. Cathie Wood is simply a marketing genius who got lucky off moonshot plays in Bitcoin and Tesla, and then leveraged that success to convince the public to drive in-flows into her ARK ETFs over the past years. Those inflows helped propel a bunch of growth names higher, but ARK will eventually be a victim of its own success as outflows force selling into already declining stock prices. This reddit post is from February of 2021 when ARKK died because of, you guessed it, rising bond yields: https://www.reddit.com/r/stocks/comments/lv1sjx/investors_beware_arkk_is_a_liquidity_disaster/. Looking at the 2 YR yield, this time might be significantly worse. This is why I told my mother to move everything over to $VTI and a selection of value names: $ADNT, $GM, $F, $KRE, $HEES, $HRI, etc.

    The ONLY stock in ARKK with a reasonable PE multiple is COIN. Every other name has a multiple in either the high-flying hundreds, or the stock is simply a money burning piece of shit experiencing slowing growth. GL investors - stay safe out there. If you've been holding ARKK, it's okay to take a loss. When investing, and over the long run, losses are bound to happen. My biggest losses all came from holding onto the hope that my stock would recover, even though I knew deep down it wouldn't.

    In case you were living under a rock this week: https://www.wsj.com/articles/bond-yield-surge-challenges-investor-confidence-in-big-tech-companies-11632907865

    submitted by /u/UpDownSidewaysAction
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    VSH growth thoughts?

    Posted: 02 Oct 2021 07:58 AM PDT

    This stock has very good financials, returns, great P/E ratio, good pricing and is just a great value tech stock. Producing many tech parts and semiconductors. They have been acquiring many other businesses over the years. I'm not sure why it hasn't taken off already. Only thing I haven't seen is any exciting future plans for continued growth. Also I saw some insider sells over the last couple years but other than that anyone know what's holding this stock back? I was looking for a high value small/medium cap that hasn't take off yet to do some swing trades in or hold.

    submitted by /u/Upper-Razzmatazz176
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    How to invest on Nordic GM from non-nordic Europe Countries?

    Posted: 02 Oct 2021 06:16 AM PDT

    Hello,

    I would like to invest in some stocks that are listed only on Nordic GM.

    I'm from European country but not related to Nordic countries in any way.

    I checked two brokers in my country, Revolut, Etoro and Degiro and non of them allowed me to invest in any Nordic GM stock.

    Can you please guys help me?

    submitted by /u/mokzog
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    TAK - to buy or not to buy?

    Posted: 02 Oct 2021 03:05 AM PDT

    Hey everyone, hope you're having a good weekend!

    I've been observing and researching Takeda Pharmaceuticals for about a month, but still cannot decided whether they are a good choice to add to Pharmaceuticals Pie.

    As of now, I have AZN, AZN.L, GILD and SNY, and am planning to grow my pharma list. Takeda seems like a good choice, with decent earnings, EPS and dividend rate.

    What are your opinions on TAK and investing in it guys gals and non binary pals?

    submitted by /u/Vanderpool0312
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    Are day/swing traders considered "partners" of a company?

    Posted: 02 Oct 2021 12:12 PM PDT

    So I was having this debate with my a friend, he told me why do you invest in x company, are you supporting their business? I told them I just trade the market and have nothing to do with their fundamentals, but he wasn't buying it.

    Basically, we understand that owning a share of a company makes you a partner of that company even if that means you only own .0001% of the company and your vote doesn't matter, you are still a partner and therefore everything the company means you are part of it. So if a company falls in debt, or beats earnings, or sends out dividends then you are part of it.

    A day/swing trader doesn't necessarily apply to the above do they? How can you be a partner of a company for less than a day or a couple of days? I know day/swing traders add liquidity to markets, but in terms of actually being "partner" or "owner" of the company they are trading it, it doesn't apply to them right?

    Really the only reason I'm asking, is cos lets say a company sells cigarettes, and morally you don't support cigarettes and don't want anything to do with it. You are just trading in it for a couple of hours to a few days because that company has volume, not really investing long term, do you have anything to do with the fact that the company sells cigarettes as a trader or your role is only in regards to supply and demand and liquidity?

    Traders make their money based off the charts not based off the actual company fundamentals, how they operate, how they fund their business, etc... Correct? A trader spots trend in market and takes advantage of financial system to make a living, they aren't really contributing to a real product/service.

    On the other hand an investor, will fuel a company with money he invests, therefore contributing to that company's product/service? Does that apply to a trader too?

    Summary:

    If company does shady business, as a trader, do you fall under the label of a "partner" and "supporter" of that shady business even if you aren't investing long term?

    submitted by /u/mateyman
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    Wall Street Week Ahead for the trading week beginning October 4th, 2021

    Posted: 01 Oct 2021 04:20 PM PDT

    Good Friday evening to all of you here on r/stocks. I hope everyone on this sub made out pretty nicely in the market this past week, and is ready for the new trading week ahead.

    Here is everything you need to know to get you ready for the trading week beginning October 4th, 2021.

    October may have a bad reputation, but stocks are entering a normally positive period - (Source)


    October may have a bad reputation, but the fourth quarter has mostly been a positive time for stocks.


    Despite worries about central bank tightening, the debt ceiling, Chinese developer Evergrande and Covid-19, many strategists expect stocks to eclipse recent highs after a rocky period in October.


    The S&P 500 has averaged outsized gains of 3.9% in the fourth quarter and was up four out of every five years since World War II, according to CFRA. The next best quarter is the first, with an average gain of 2.3%. The worst is the third, up just 0.6%.


    "Q4 2021 will likely record a higher-than-average return. However, investors will need to hang on tight during the typically tumultuous ride in October, which saw 36% higher volatility when compared with the average for the other 11 months," notes CFRA chief investment strategist Sam Stovall.


    The S&P 500 eked out a small gain for the third quarter, but was down nearly 5% for the month of September, with a bad ending as the S&P 500 dropped 1.2% on Thursday.


    The indexes kicked off the first trading session in October on a positive note, however. With the S&P 500 adding 1.1% and the Nasdaq closing 0.8% higher on Friday. The Dow Jones Industrial Average added 482.54 points.


    https://i.imgur.com/FEg9jmU.png


    Bespoke Investment Group analyzed the behavior of the S&P 500 in years when it was up solidly year-to-date heading into the fourth quarter. In those years, the market typically gained in the quarter, but there were weaker than normal returns in October and the quarter itself, when September was a negative month.


    "The S&P 500 has been down in September 50 times since 1928, and in those years, it has actually averaged a decline of 0.41% in October and a gain of just 0.75% in Q4," Bespoke noted. When September's performance was positive, the S&P gained a much stronger 1.6% average in October and an average 5% in the fourth quarter, according to the firm.


    Bespoke found that while October is remembered for stock market crashes, like those in 1929 and 1987, the market is usually positive. The Dow, for instance, gained 60% of the time in October over the past 50 years, averaging an increase of 0.5%. It was negative most of the time in September, with an average loss of 0.9%.


    Jobs, jobs, jobs

    One of the first hurdles markets face in the new quarter is Friday's employment report, potentially one of the final triggers for the Federal Reserve's decision on when to taper its $120 billion-a-month bond buying program.


    Economists expect about 475,000 jobs were added in September, according to an early consensus figure from FactSet. Just 235,000 payrolls were added in August, about 500,000 less than expected.


    "The only way I could see them delaying the tapering is if we get a very weak number, something closer to zero," said Ethan Harris, head of global economic research at Bank of America. "Anything that looks like 100,000, 200,000, they just go ahead" with the taper.


    Harris said the biggest concern for the economy remains Covid, though new cases are slowing.


    "The big question is when does the Covid story start to fade a bit, allowing activity to come back," he said. He expects the pandemic will continue to be a big factor in the labor market in September.


    "We think fear of getting Covid on the job was a big factor in August and will be a factor in September as well," he said. "By October, the early hints are people are starting to feel more comfortable and you should get some beginnings of a reacceleration of job growth."


    The market got some positive news on that front on Friday with Merck's promising data for its Covid antiviral pill.


    Central banks tightening

    A big event in the fourth quarter could be the beginning of the unwind of the Federal Reserve's easy policies.


    The central bank last week signaled it is nearly ready to take that first step away from the policies used during the pandemic to maintain financial market liquidity and help the economy.


    The Fed is widely expected to announce in November that it will start to slow its bond purchases, and Fed Chairman Jerome Powell said he expects it to finish by the middle of next year.


    Other central banks around the world are also making the same noises or actually moving to raise interest rates. Bond market pros now expect a trend toward higher interest rates.


    Just in the past week, rates shot higher, with the 10-year Treasury yield rising from about 1.31% while the Fed was meeting Sept. 22 to as high as 1.56% just a week later. On Friday, the yield eased back a bit to just under 1.50%.


    https://i.imgur.com/9dO7jZc.png


    The move toward tapering so far has not had much impact on markets, though strategists say it could if yields shoot higher. The bond buying program, or quantitative easing, was also credited with providing market liquidity, which has been fuel for stock market gains.


    "The Fed is trying very hard to telegraph what they are doing well in advance and take the shock out of what they're doing. Bond yields have gone up a bit but not in a way that's troubling for the economy," said Harris. "The real risk from the Fed comes when they start talking about hiking interest rates. ... That's a story for next year."


    Rising yields would become more risky for stocks if they were to continue to move up rapidly. Tony Crescenzi, PIMCO executive vice president, said he expects the benchmark 10-year Treasury yield to trade in a range of 1.50% to 2% this year.


    Crescenzi said the move higher in yields has to do with more persistent inflation expectations and the Fed's persistent move toward less easy policy. "It's still marching forward with its plan to taper and eventually tighten," he said. "The taper doesn't set a date for tightening, but the clock starts ticking once the taper begins."


    The jump in rates rattled stocks in the past week, particularly tech stocks. The S&P 500 was lower by 2.2% for the week and the Nasdaq shed 3.2%.


    Surprising earnings

    Earnings have been a big catalyst for the stock market, with huge upside surprises boosting sentiment this year. But some strategists warn that if companies sound too cautious when they report third-quarter profits in the next couple of weeks, that could be a forewarning for the market.


    Julian Emanuel, head of equity and derivative strategy at BTIG, said rising earnings estimates for this year and next year have been a tailwind. "Those in our view have now plateaued and potentially peaked," he said. "If the market perceived they peaked rather than plateaued on a near to medium-term basis, then we have a problem for the stock market."


    Investors are also watching the supply chain issues that are disrupting many companies' ability to get parts and even products. They are already impacting earnings and pressuring margins. Some have already warned about the problem, and more are expected to detail the issues during earnings calls.


    Congress averted a government shutdown, but political feuding is likely to hang over the markets in the fourth quarter. The bigger task facing lawmakers will be to raise the debt ceiling, which could become worrisome for markets if the government reaches the limit before action is taken.


    As the fourth quarter moves ahead, the fate of the proposed $3.5 trillion infrastructure plan, which is opposed by Republicans and some Democrats, remains up in the air. Bank of America's Harris said he expects it to be cut back to about $1.5 trillion.


    Other issues

    Chinese property developer Evergrande's failure to make its debt payments temporarily spooked the market in September. Its problems are not solved even as investors expect that a financial meltdown will be averted.


    Evergrande's progress will remain an important story for the markets in the fourth quarter, as the company struggles under its $300 billion debt burden.


    This past week saw the following moves in the S&P:

    (CLICK HERE FOR THE FULL S&P TREE MAP FOR THE PAST WEEK!)

    S&P Sectors for this past week:

    (CLICK HERE FOR THE S&P SECTORS FOR THE PAST WEEK!)

    Major Indices for this past week:

    (CLICK HERE FOR THE MAJOR INDICES FOR THE PAST WEEK!)

    Major Futures Markets as of Friday's close:

    (CLICK HERE FOR THE MAJOR FUTURES INDICES AS OF FRIDAY!)

    Economic Calendar for the Week Ahead:

    (CLICK HERE FOR THE FULL ECONOMIC CALENDAR FOR THE WEEK AHEAD!)

    Percentage Changes for the Major Indices, WTD, MTD, QTD, YTD as of Friday's close:

    (CLICK HERE FOR THE CHART!)

    S&P Sectors for the Past Week:

    (CLICK HERE FOR THE CHART!)

    Major Indices Pullback/Correction Levels as of Friday's close:

    (CLICK HERE FOR THE CHART!)

    Major Indices Rally Levels as of Friday's close:

    (CLICK HERE FOR THE CHART!)

    Most Anticipated Earnings Releases for this week:

    ([CLICK HERE FOR THE CHART!]())

    (T.B.A. THIS WEEKEND.)

    Here are the upcoming IPO's for this week:

    (CLICK HERE FOR THE CHART!)

    Friday's Stock Analyst Upgrades & Downgrades:

    (CLICK HERE FOR THE CHART LINK #1!)
    (CLICK HERE FOR THE CHART LINK #2!)
    (CLICK HERE FOR THE CHART LINK #3!)

    Mega Caps Underperforming as Energy Explodes

    In November of last year, we took a look at the performance spread between the equal and market cap weighted versions of the S&P 500. The chart below provides an update through the end of September where positive readings indicate outperformance of the equal-weight S&P 500 and negative readings indicate outperformance of the market cap weighted index. In March 2020, as the market was plunging from the February peak and bottoming towards the end of the month, mega-caps such as Apple (APPL), Microsoft (MSFT), Alphabet (GOOGL), Amazon (AMZN), and Facebook (FB) significantly outperformed the broader market, resulting in a 5.68 percentage point spread between the return of the equally weighted and market cap weighted S&P 500. Whereas the equal-weighted index declined 18.19% in March 2020, the market cap weighted index dropped 'just' 12.51%. In a reversal of these trends, the equal-weighted index outperformed between the months of September 2020 and March 2021, rallying 30.84% while its market cap weighted counterpart gained 18.14%. Over these months, there was a maximum monthly spread of 3.37 percentage points in favor of the equal-weighted index, which occurred last December. In recent months, mega-caps briefly took back the reins before the trend reversed in September when the equal-weighted index outperformed by 0.82 percentage points.

    (CLICK HERE FOR THE CHART!)

    With the month of September behind us, the table below lists the 18 stocks in the S&P 500 that finished the month up over 10%, and less than a quarter of the stocks in the index (22%) finished the month higher. Overall, the average performance of stocks in the index was a decline of 3.7 percentage points. While short-term performance has been weak, on a YTD basis, 81.42% of S&P 500 stocks are up on the year, and the overall average gain is 18.90%. Of the stocks that have rallied 10%+ in September, more than half are from the Energy sector and another three come from the Financials sector.

    (CLICK HERE FOR THE CHART!)

    Q3 Asset Class Performance

    Q3 and the month of September are now in the books, and it was not a great period for US equities. As shown in our asset class performance matrix below, the sole portion of the US equity market that was higher in September was Energy stocks. Every other sector, theme, and major index was lower on the month. As for global equities, performance was more mixed with declines ranging from 11.73% for Brazil (EWZ) to a 3.55% gain for Russia, though, most country ETFs were lower on the month.

    Commodities had a good month particularly in the energy space with crude oil (USO) gaining 9.41% and Natural Gas (UNG) rising an astounding 31.59%. That lifted the total gain in Q3 to 54.13% while it has returned almost 120% year to date; the best performer for both time periods. Precious metals, namely silver (SLV), on the other hand, was hit particularly hard. As for c/ryptos, Ethereum (ETHE) was another top performer YTD and in Q3, but September pared those gains. ETHE fell 13.62% in September while B/itcoin (GBTC) also fell by double-digit percentages.

    (CLICK HERE FOR THE CHART!)

    Could There Be An October Crash?

    "October: This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February." Mark Twain

    Well, it was bound to end eventually, but the S&P 500 Index will finish September in the red, ending an incredible seven month win streak. As we noted last month, these long win streaks actually tend to be quite bullish for future returns, with the S&P 500 higher six months later 13 out of 14 times. Yes, stocks were down some in September, but this still bodes well for the near-term.

    (CLICK HERE FOR THE CHART!)

    Speaking of the near term, here comes October. As Marc Twain explained many years ago, October has long been a source of anxiety for stock investors. "October is known for some spectacular crashes and many expect bad things to happen again this year. 1929, 1987, and 2008 all come to mind when we think about this month," explained LPL Financial Chief Market Strategist Ryan Detrick. "But the truth is this month is simply misunderstood, as historically it is about an average month."

    As the LPL Chart of the Day shows, since 1950, October ranks as the 7th best month, while the past 10 and 20 years it ranks as the 4th best month. In a post-election year it comes in 5th. So October clearly isn't one of the best months of the year, but by no means is it the worst either.

    (CLICK HERE FOR THE CHART!)

    Now, let's be very clear though, October is known for volatility. No month has seen more 1% moves (up or down) than October, with some of the largest 1-day moves (both up and down) taking place this month. Heck, the S&P 500 hasn't had a 5% pullback all year (the average year sees about three) and the last one was nearly a full year ago, one of the longest such streaks ever. Not to mention the S&P 500 has now gone an incredible 317 trading days in a row above its 200-day moving average, one of the longest streaks ever. What we are getting at is a 5-7% pullback could potentially come at any time given we haven't had one in so long.

    (CLICK HERE FOR THE CHART!)

    Here are some other interesting statistics to think about regarding the S&P 500 in October. * It has been 21 years (2000) since October didn't close at least up or down 1%. Several percent moves up or down are quite common for this month in other words. * For six years in a row October has alternated between higher and lower. Given 2020 it was in the red, it could be time for a bounce in 2021. (More on this below) * The last two times the S&P 500 was up more than 15% year-to-date heading into October, stocks gained each time (2013 and 2019). * The author's birthday is on October 28, one of the historically most bullish days of the year. Coincidence? It turns out stocks don't like politics much. The S&P 500 performs much better in odd numbered years than even years. Remember, even numbered years have elections and midterms in November. Some pre-election jitters makes sense to us, which could bode well for 2021.

    (CLICK HERE FOR THE CHART!)

    Don't forget the fourth quarter is historically the best for stocks, with the third quarter the worst. Stocks rise 3.8% on average during the fourth quarter, but the past seven times the S&P 500 was up 15% year-to-date heading into the home stretch of the year, the fourth quarter was higher every single time, up a very impressive 5.8%. In other words, should there be any October scares, investors may want to use the weakness as an opportunity to add to core positions.

    (CLICK HERE FOR THE CHART!)

    Four Charts That Signal the Reopening Trade May Be Back

    Stocks have come a long way since the S&P 500 bear market low way back on March 23, 2020, but despite the general strength of the bull market we've seen two very different types of trades leading markets at different times. They include a "work-from-home" trade characterized by strength among large caps and growth-style oriented stocks, strong performance by U.S. stocks in particular, and well contained interest rates. At other times, we've seen a "reopening trade," where mid- and small-cap stocks have performed well, cyclically-oriented value-style stocks have led, interest rates have pressed higher, and performance across geographical regions has been more even. For most of the last six months the work-from-home trade has dominated, but we're seeing some signs of potential rotation toward a reopening theme once again.

    "It's increasingly looking like the Delta-related surge in COVID-19 cases, while still dangerous, has passed its peak, and there are signals that markets may be anticipating the next stage of economic reopening," said LPL Chief Market Strategist Ryan Detrick. "After a mid-summer head fake, we're seeing signs that this time the rotation might stick."

    It all starts with interest rates. The 10-year Treasury yield started to stabilize in early August, and since then we've seen steady movement higher as elevated inflation looks increasingly sticky in the near term, and markets start to anticipate global central bankers slowly winding down extraordinarily supportive monetary policy. The full transition to neutral policy will likely take years, and central banks will remain supportive for some time, but the change in direction does matter. Seeing the 10-year yield move higher despite stock losses on Tuesday may be a telling sign.

    (CLICK HERE FOR THE CHART!)

    A higher 10-year Treasury yield has supported financial sector stocks, which are the largest sector in the Russell 1000 Value Index. The breakout in relative strength compared to the August peak may signal a more sustainable change in direction this time.

    (CLICK HERE FOR THE CHART!)

    It's still too early to call a reversal by value-style stocks overall, but financial sector strength helps. Rising interest rates also tend to increase the value of near-term earnings over less visible long-term earnings growth, which may also give value stocks an edge. While there are some signs of a reversal higher in the value trade, what we've seen so far isn't persuasive in isolation. But added to the broader market signals, we see potential for further relative strength, particularly for cyclical value sectors.

    (CLICK HERE FOR THE CHART!)

    The relative strength of small caps looks more robust, breaking out to the upside after treading water for several months. Small caps went through a stretch of extraordinarily strong performance between September 2020 and March 2021, and it's not completely surprising that they gave back a good share of those gains after coming so far so fast, but we still think the economic environment is likely to be supportive for small- and mid-caps compared to large.

    (CLICK HERE FOR THE CHART!)

    We've been anticipating a rotation back to the reopening trade for some time. If you look at the charts there's really been relative stability between the two themes since mid-July, but the last few weeks have provided solid signals of a potential reversal. With the latest surge in COVID-19 cases likely past peak, vaccination rates slowly rising, and economic surprises starting to come back into balance after a series of disappointments, it's no surprise to see the shift toward the reopening theme.

    But there are some potential economic negatives that support this trade as well, such as high commodity prices, higher interest rates, and growing risk of stickier inflation. Nevertheless, we think the fundamental backdrop for equities remains positive on the whole, and we continue to recommend modest overweights to equities while leaning into cyclically-oriented value sectors and tilting away from large caps.


    STOCK MARKET VIDEO: Stock Market Analysis Video for Week Ending October 1st, 2021

    ([CLICK HERE FOR THE YOUTUBE VIDEO!]())

    (VIDEO NOT YET POSTED.)

    STOCK MARKET VIDEO: ShadowTrader Video Weekly 10.3.21

    ([CLICK HERE FOR THE YOUTUBE VIDEO!]())

    (VIDEO NOT YET POSTED.)


    Here are the most notable companies (tickers) reporting earnings in this upcoming trading week ahead-


    • (T.B.A. THIS WEEKEND.)

    ([CLICK HERE FOR NEXT WEEK'S MOST NOTABLE EARNINGS RELEASES!]())

    (T.B.A. THIS WEEKEND.)

    ([CLICK HERE FOR NEXT WEEK'S HIGHEST VOLATILITY EARNINGS RELEASES!]())

    (T.B.A. THIS WEEKEND.)


    Below are some of the notable companies coming out with earnings releases this upcoming trading week ahead which includes the date/time of release & consensus estimates courtesy of Earnings Whispers:


    Monday 10.4.21 Before Market Open:

    ([CLICK HERE FOR MONDAY'S PRE-MARKET EARNINGS TIME & ESTIMATES!]())

    (NONE.)

    Monday 10.4.21 After Market Close:

    (CLICK HERE FOR MONDAY'S AFTER-MARKET EARNINGS TIME & ESTIMATES!)

    Tuesday 10.5.21 Before Market Open:

    (CLICK HERE FOR TUESDAY'S PRE-MARKET EARNINGS TIME & ESTIMATES!)

    Tuesday 10.5.21 After Market Close:

    (CLICK HERE FOR TUESDAY'S AFTER-MARKET EARNINGS TIME & ESTIMATES!)

    Wednesday 10.6.21 Before Market Open:

    (CLICK HERE FOR WEDNESDAY'S PRE-MARKET EARNINGS TIME & ESTIMATES!)

    Wednesday 10.6.21 After Market Close:

    (CLICK HERE FOR WEDNESDAY'S AFTER-MARKET EARNINGS TIME & ESTIMATES!)

    Thursday 10.7.21 Before Market Open:

    (CLICK HERE FOR THURSDAY'S PRE-MARKET EARNINGS TIME & ESTIMATES!)

    Thursday 10.7.21 After Market Close:

    (CLICK HERE FOR THURSDAY'S AFTER-MARKET EARNINGS TIME & ESTIMATES!)

    Friday 10.8.21 Before Market Open:

    (CLICK HERE FOR FRIDAY'S PRE-MARKET EARNINGS TIME & ESTIMATES!)

    Friday 10.8.21 After Market Close:

    ([CLICK HERE FOR FRIDAY'S AFTER-MARKET EARNINGS TIME & ESTIMATES!]())

    (NONE.)


    (T.B.A. THIS WEEKEND.)

    T.B.A. THIS WEEKEND.) T.B.A. THIS WEEKEND.).

    (CLICK HERE FOR THE CHART!)


    DISCUSS!

    What are you all watching for in this upcoming trading week?


    I hope you all have a wonderful weekend and a great trading week ahead r/stocks. :)

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