Market 2017-09-29, and Q3 Review

What is going on today?

Nasdaq out-performs S&P500 and Dow Jones today. All finished green.

KBH popped, boosting market confidence; TSN flied. I used to like SAFM better, which looks expensive now.

ROKU is strong after IPO (+70%). However, I think the hype is overdone. It reminds me GoPro (GPRO), which jumped to almost $100 following IPO in 2014. Now it is traded @ $11.

As I said yesterday, GILD recovered all the early loss (-2% in the morning) and finished green today.

GOOG is heading to $1000 again despite the recent headwinds, $959 (+1%).

Apple (AAPL, +0.55%) is looking to leverage ARM processors in the MacBook and MacBook Pro to reduce a dependence on Intel, according to Nikkei Asian Review sources. This is bad news for INTC. But Intel also got some good news recently. Tesla is replacing Nvidia with Intel for infotainment components. The components will appear in Tesla’s Model 3 and newer vehicles.

My Trades Today

Sold 20% CPTA @ $9.6 to reduce weight (bought @ $9, 7% profit). Sold 15% MAT @ $15.4 to reduce weight (bought @ $14.4, 7% profit).

Now holding 20% cash in my active trading account, or 10% overall.

Q3 Review

In September, three indexes go up around 2%, keeping the constant pace to north following the election. YTD, Nasdaq +20.6%, Dow Jones +13.3%, S&P500 +12.5%. My portfolio performance is slightly better than Dow Jones.

Q2 GDP 3.1%, above 3.0% expected. Corporations are reporting nice earnings growth, which is partially benefited from Dollar weakness in Q2. Q3 GDP will probably take a hit by both hurricanes and strong dollar.

• Earnings Growth: For Q3 2017, the estimated earnings growth rate for the S&P 500 is 4.2%. Eight sectors are expected to report earnings growth for the quarter, led by the Energy sector.

• Earnings Guidance: For Q3 2017, 76 S&P 500 companies have issued negative EPS guidance and 42 S&P 500 companies have issued positive EPS guidance. Be cautious as the new earning season starts.

• Valuation: The forward 12-month P/E ratio for the S&P 500 is 17.7. This P/E ratio is above the 5-year average (15.6) and above the 10-year average (14.1).

• Earnings Scorecard: For Q3 2017 (with 16 companies in the S&P 500 reporting actual results for the quarter), 13 companies have reported positive EPS surprises and 13 companies have reported positive sales surprises. Good sign.

A few charts you may study, which I borrowed from a report. Have a nice weekend!






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