Showing posts from August, 2019

Two Retail stocks for next months: KR and ROST

1. The Kroger Co. KR , $23.92. This stock is especially important in these days of Trade War escalation, using it as a hedge, due Kroger operates retail food and drug stores manufacturing its own products, so, unlike other retail stores, have little exposition to China . Last week, I emphasize that retailers could fuel a next market bullish rally , due great July Retail Sales report. Kroger is near 20% down this year, however, the company reports decent Q1 earnings, showing that its CEO Mac Mullen probably finds a way to reverse after an ugly 2018 (-26%) a bad year for all the retail sector. An early August' upgrade from Pivotal Research fuels the stock from the $21 level, "a cheap price enough for a buy" as they said. And also last week announces a test concept with Walgreens WBA , expanding its Express store-within-a-store pilot in Tennessee. Seems interesting. Technically, the stock is finally breaking the resistance line of its downtrend channel that beg

Markets: quick review of the last, choppy, week

Market Pulse. U.S. equities were on track to finish higher for the week until China unveiled a new round of retaliatory tariffs and President Trump vowed to respond, unnerving markets. In this new episode of escalating trade tensions, China announced that it would impose tariffs ranging from 5% to 10% on $75 billion of U.S.goods in two batches, effective on September 1st and December 15th, including a 25% tariff on U.S. cars. The S&P500 SPX  finished Friday down 2.59%, concluding the volatile week down 1.4%. The index is now down 4.5% for the month of August and 6.0% lower from the record high it reached in July. The Dow Jones Industrial Average fell 2.4% on the day and finished down 1.0% for the week. At the annual central bank summit in Jackson Hole, Fed Chairman Powell left the door open for another rate cut when the committee meets next month, acknowledging the risks to global growth from trade uncertainty. An inverted yield curve (when long-term rates are b

Trade War escalation today: some notes

The most awaited news on Wall Street today, the Powell's speech in Jackson Hole , was almost forgotten by investors and traders, due he didn't tell nothing new, but most because today the Trade War reached its peak of intensity . A round trip of attacks via tweets that ended with both countries, U.S and China, raising their tariffs , and with Trump ordering companies in his country not to have commercial relations with China and start looking for other countries (as if it were easy to find a similar market!). Wall Street plunges with all this news in a strong sell-off: the SP500 SPX closes -2.59% at 2,847.11 Some notes: - Whoever says that the world is not headed for a global recession, lies. It is unavoidable. - It is no longer interesting to look at the inverted yield curve in the US on a daily basis, hoping to read that the risk of recession decreases: the Trade War is getting worse and has no solution in the short term. - The economy deceleration is global a

JPMorgan: stocks could outperformance into month-end

JPMorgan's Marko Kolanovic said investors are questioning how much of recent equity moves can be attributed to increased recession risk vs. technical flows in this environment of poor liquidity . JPM 's analysts have reasoned that more than half of the recent move in interest rates and inversion of the yield curve was caused by technical drivers (convexity hedging of mortgages, bank portfolios, and variable annuities in poor liquidity conditions) and less than half of the move can be explained by fundamentals such as the growth, inflation, and monetary policy outlook . "This is an important data point for equity investors, as moves in rates (e.g. yield curve inversion) significantly impact investment sentiment," Marko wrote, "by looking at various systematic flows in equity markets, we find similar results – i.e. that more than half of equity moves were driven by systematic rather than fundamental trading."Looking at systematic equity flows durin