Market 2017-12-08 (Crude, Tech, and more)

The Market goes north broadly across all Sectors today, lead by healthcare. Biotech finally shines today, IBB +2.1%.

Crude +1.22% to $57.38. Gold -0.24% to $1,250.10.

Regarding crude price, thanks to our stupid president, anti-US conflicts are allover Middle East. However, in US, the total rig count increased by 2 to 931, rising for the 5th consecutive week. The oil rig count rose by 2 to 751, while the gas rig count held steady at 180. The increasing shale oil production has offset the OPEC cut. I am not expecting crude price to go much higher. It is expected that shale oil will peak around 2024, still long way to go. COP has limited the average cost below $50/barrel for all new projects.

This week, BAC, HON, UAL all announced to add billions for share buyback. More cash-rich companies are expected to join. This is actually not good for the overall economy, hinting they don't have better usage to invest the extra cash which they will save from the Tax Reform.

Last weekend, I posted an article about the companies benefiting from Tax Reform (click HERE). Some 'honest' companies are paying 35% or higher tax (many in Retailer and Restaurant Sectors). In my long list, you may have hard time to find Tech names. Today, let's have a look how much they (FAANG) are paying. In the most recently ERs, FB 10%, AMZN 18%, AAPL 25.5%, NFLX 6% (although they paid 20% in Q1), GOOG 16%. This is exactly what is behind the recent massive Sector Rotation and weakness in Tech. Some other tickers: NVDA 6.5%, WDC 4.1%, MU 2.2%, INTC 24%, AMAT 5.4%, LRCX 14%, IBM 11%, CSCO 19%, ORCL 14.5%...

Winners (many, I only list a few)

QD +15.8%, it is definitely manipulated. XRF +17.4%, YRD +5.7%.

Biotech: VRX +11.7%, ALXN +7.2%, TEVA +7.1%, WRTX +3.5%, CELG +3.3%....

WDC +4%, have reached agreement with Toshiba to settle a dispute next week

Retailers: FL +4.1%, LB +4%, SIG +3.7%, BBY +3.7%.


Losers

TELL -18%, share offering

NAND prices -1.47% in the past week. The six-week average is -0.55%. PC DRAM prices -1.14% in the week. The six-week average is +1.03%. MU gave up all the early gain today. AMAT -1.7%, LRCX -1.4%.


My Trades Today

Sold FB @ $182. I will buy back FB if it falls to below $176.

Sold 2/3 position in QD @ $13.5 (average cost $13) amid the uncertainty of regulations.

Bought SQ @ $38.

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