Beat the Market

Market opened strong today as Boeing lifted Dow Jones. However, most of the gains vanished afterwards, especially after FOMC @ 2 pm . There were no surprises as FED keeps rates on hold, and next rate hike will probably in March. Indices manage to finish in green. One thing I would like to mention --- in a downward day, buying waves usually start @ 1:30 pm (after lunch) and 3:00 pm , which indicate the buying power of institutions. There were two waves yesterday and one wave today. On News Today: Director of the Centers for Disease Control and Prevention (CDC) Dr. Brenda Fitzgerald has resigned over financial conflicts of interest. Yesterday, Politico reported that Dr. Fitzgerald purchased shares in a tobacco company a month into her term, as well as biotech company stocks. Winners BA +4.9% after reporting Q4 EPS of $4.80 beats by $1.91; Revenue of $25.4B (+9.1% Y/Y) beats by $710M. Backlog remains robust at $488B, including a record 5,864 commercial aircraft. Outlook for 201...

The main reasons of selloff today are probably: (a) fear of high interest rate ; (b) profit taking.  FED is holding regular meeting today and tomorrow. We will learn more tomorrow noon. Street in general is expecting 3 interest hikes in 2018. The new chairman Jerome Powell is considered dovish. However, FED is under the pressure to hike 4 times as treasury yields keep going higher (2.73% now, was below 2.1% 5 months ago). A hawkish may trigger more selloff. Crude oil prices sank for 2nd straight session amid today's broad selloff: March WTI -1.5% to settle at $64.5/bbl and March Brent -0.6% at $69. The biggest news today : Amazon/Berkshire/JPMorgan team up to form a healthcare venture , which provides health insurance to their own employees. This shocks health insurers: Cigna (CI -7.1%), UnitedHealth (UNH -4.8%), Aetna (AET, -2.9%), Anthem (ANTM -5.2%), Express Scripts (ESRX -2.8%), Humana (HUM -2.9%), and drug retailers such as CVS (-5.6%), Walgreens Boots Alliance (WBA,...

Market is broadly lower today, especially in Energy and Telecom Sectors. In my post yesterday, I have warned about the possible selling pressure from pension fund portfolio adjustments. Dollar recovers a little ( UUP +0.3% ). Crude -1.06% to $65.44. Gold -0.81% to $1,341.10. 10 year treasury jumps to 2.7% , highest since April 2014. YTD it has raised from 2.4% to 2.7%. As FED cuts its balance sheet, treasury will probably go higher, which increases borrowing cost all across the economy. Winners Dr Pepper Snapple Group ( DPS +22.4% ) announces a merger with Keurig Green Mountain. Dr Pepper Snapple shareholders will receive $103.75 per share in a special cash dividend and retain 13% of the combined company. MOMO +4.6% , it has gained 9.4% after I called it break out last Thursday. GILD +4% , it also has a great run recently. Biotech Sector ( IBB +0.4% ) is doing well in today's selloff. Hot Tech names, e.g. NFLX +3.6%, AMZN +1.1%, NVDA +1.5% , still attract investors....

Weekend News Trump is expected to propose increasing defense spending to $716B in FY 2019 (beginning October 2018) in his budget request to be released next month. The proposed budget would be a 13% increase over 2017, when the U.S. spent $634B on defense, and a 7%-plus gain over the $668B in the 2018 budget, which still has not passed through Congress. The Trump administration has signed a $24M contract with Boeing to replace two food chilling systems aboard Air Force One. No joking, $12M per refrigerator! They must be made in gold. BA declined to comment. Following sexual misconduct allegations, Steve Wynn has resigned as finance chairman of the Republican National Committee (RNC). WYNN -10% last Friday. On-demand music services like Apple, Amazon, Google, Pandora and Spotify will need to pay more to songwriters and publishers after a Copyright Royalty Board decision. The new ruling hikes rates to at least a 15.1% from a previous 10.5% over a five-year term from 2018-2022...

Disclosure : I am long on CELG, with PT $120 in a year, and $180 in 3 years. Brief Background From 2010, stock price returns +276% , higher than Nasdaq +242% , or Dow Jones +154% . Most of the revenue has come from its blockbuster drug Revlimid (for multiple myeloma, approved at the end of 2005).  The company has three other drugs running at annual revenue rates of over $1B: Abraxane, Pomalyst , and Otezla. Total revenue in 2017 was $13B . Fact Check Current Price ： $105 5 2-Week Range : $94.55 - 147.17. PT ranges from $97 to $166, average $126 . Ratings: 18 Strong Buy, 1 Overweight, 12 Hold, 1 Sell Total liquid: $12B at the end of 2017, compared to $8B at the end of 2016. Shares Buyback: In 2017, CELG purchased $3.9B of shares, $0.8B remaining under existing program by the end of 2017. 2018 Guidance:  Total Revenue: $14.4B - $14.8B (12% growth); non-GAAP EPS: $8.70 - 8.90 (18% growth). 2020 Target: Revenue $19-20B, non-GAAP EPS > $12.5 DATA of Re...

Indices crash their records as market carries strong momentum in this first earning season after Tax Reform. Tech and Healthcare lead; Utilities lag. YTD, Nasdaq +8.7%, DJI +7.7%,  S&P 500 +7.4%. Crude +0.92% to $66.11. Gold -1.06% to $1,348.50. Last weekend, I have predicted  the near-term uptrend of crude price. The price next week will be determined by US dollar. UUP -0.2% today. On news today: Chinese smartphone market -4% YoY to 459M. As comparison, it was +11% from 2015 to 2016. Oppo -16%, Vivo -7%; Huawei +9%. It is especially alarming that the overall shipment was -14% in 17Q4. This could be bad news for Apple and Samsung. Winners Tech INTC +10.6% , breaks out to all time high after strong earnings, lifting the whole Semiconductors. TER +6.5%, NVDA +3%. WDC also manages to recover the selloff yesterday AH to finish +1.8% . VWM +9% as rumor that it may merge with Dell. Chinese Tech shine again BABA +3.5%, JD +6.6%, BIDU +2.4%, SOHU...

It is a choppy day in Market. It turns out that S&P and Nasdaq finish with little change. However, there are lots of big moves on individual stocks. Let's first start with Headline news. New home sales tumbled 9.3% in December. Cold Weather might play a big role here. The median price of new home hits a record $335.4k , +2.6% YoY . On Wednesday, it reported that sales of existing homes fell 3.6% as well. For 2017, existing home sales totaled 5.51M ( +1.1% YoY ), most since 2006. Nevertheless, homebuilders are sharply down today ITB -2.1%, XHB -1%. Mortgage rates surged to their highest levels in 10 months. The 30-year fixed-rate mortgage averaged 4.15% for the week ending Jan. 25, spiking from 4.04%, and the 15-year rate averaged 3.62% , surging from last week's 3.49%; last year at this time, they were 4.19% and 3.40% respectively. Trump wants to see a strong dollar. Treasury Secretary's Mnuchin today says the short-term position of the dollar was "not a ...

Indices are mixed today. Nasdaq manages to recover half of the intraday loss, finishing -0.6%. Mortgage applications jump 4.5% last week as buyers rush to lock low interest rates. Refi up 1%. Treasury Secretary Steven Mnuchin says" weak dollar is good for US economy ". This is short-sighted and irresponsible, which may trigger trade wars. Moreover, treasury yields will jump if Foreign investors lose confidence in green bills, thus increasing borrowing cost and causing recession. One example is the weak Japanese Yen in recent years. The economy has been trapped no matter how hard its government tries to stimulate. The case in US could be worse. The weak dollar ( UUP -1% ) boosts commodities: Crude +2.28% to $65.94. Gold +1.53% to $1,357.20. Once again, pay attention to inflation. Winner Financial sector is strong today, GS +2.1%, MS +0.6%, WFC +1.5%, JPM +1.3%, C +1.2%, BAC +0.5%...AIG +3.2% GWW +18.5% after reporting EPS of $2.94 beat by $0.74, Revenue of $2.63...

Market shows strength again, led by Tech ( QQQ +0.8% ) and Utilities . Yes, fix-income bounces back ( XLU +1%, IYR +1.3% ). Crude +1.89% to $64.77. Gold +0.66% to $1,340.70. Axios publishes what it says is a draft copy (6 pages) of the Trump administration's infrastructure plan ; it contains no specific dollar amounts for any of the initiatives. According to the leaked document, half of appropriations would go toward an incentives program giving federal grants to state, local or private entities; grant awards can cover up to 20% of the total cost of the infrastructure plan. 10% of the plan's funds would go to "Transformative Projects Program," in which the federal government would pay for as much as 80% of capital construction costs, 30% of demonstration trials and 50% of post-demonstration planning costs. The impact is unclear at this point. Winners NFLX (+10%) share price jumps to new-high as market-cap passes $100B. Bears point out the quick cash-burn, $2B ...

Wall Street is having party again. Stock indices trade higher after senators reached deal to fund the government until 2/8. This will mark the 4th time of short-term extension since last Oct --- really lame, stupid and annoying. IMF says US economy to grow nearly 3 percent in 2018 because of tax cuts. Market is also boosted by biotech M&A --- two big deals worth more than $20B . IBB +3.1% . If you have followed me closely, I have mentioned Biotech M&A on 1/5 with a long list of candidates ( LINK ), also called that Biotech reversed the trend to bullish on 1/9 ( LINK ). Since then, IBB has gained +6.6% . Crude +0.68% to $63.74. Gold +0.09% to $1,334.30. Bitcoin dives again. European Union will follow South Korea and China on cryptocurrency regulation to prevent money laundering, terrorism financing on virtual currency platforms and also plans to set limits on cryptocurrency trading. The Friday-Saturday rally looks more like dead-cat bounce now. Winners BIVV (+61.9%) ...

US Government shutdown enters 2nd day with little progress to end it. We may start to feel the pains in stock market next week if the shutdown continues. While broader markets have shown modest weakness during shutdowns, with the S&P 500 falling an average of 0.6% over the period of closure, many corporate names can be affected by fallout. For example, defense companies like Lockheed Martin (LMT), Boeing (BA) and Raytheon (RTN) are warning about contract costs and contingency plans amid uncertainty over the military budget. Saudi Energy Minister urged global oil producing nations to extend their cooperation beyond 2018 at a compliance meeting between OPEC and non-OPEC members today. At the meantime, Turkish jets and ground forces pounded positions of a Syrian Kurdish force allied with the U.S. in the fight against Islamic State. This is not helping to ease the tension in Middle East. Crude price could hang around current level or even advance higher in near-term. There w...

It is very important to plan your retirement  as early as possible.  Why? It is because the money you put into investment will grow fast. If you put $1k into your retirement account at age 20, it will grow into $15k when you reach age 60, assuming 7% annual return rate. As comparison, if you put $1k at age 30, it will only grow into only $7.6k, about half of the former case! One popular topic these days is to get retired early, for instance, at the age 50. Assuming the average yearly expense (including medical cost) is $100k and you live to age 90, you need at least $4M by age 50. Of course if you plan to get retired at age 60, then the retirement fund will be smaller ( $3M ). There is a new phrase " Million Dollar Poor "  ---- $1M may only support you from age 70 to 80 --- retire @ age 70 and decease @ age 80. In this article, I would like to introduce the possible stable income sources for retirement. (This is a brief introduction, for more details, p...

Market has another strong week, despite the possible government shutdown starting this midnight. Dow Jones manages to stay above 26,000 . Dollar continues its slide. UUP YTD -1.7%, after 9.2% drop last year. Weak dollar may boost exports and corporate earnings. However, it could accelerate inflation and hurt US economy in a long run. Crude -0.58% to $63.58. Gold +0.41% to $1,332.60. Amazon (+0.1%) will increase the monthly price of Amazon Prime from $10.99 to $12.99, an 18% increase. Although Wall Street praises such move in early hours, I believe this may turn low-incomers away to Walmart. Share price erased almost all the early gains to finish flat. Big price moves are mainly affected by earnings and ratings. Winners Financial Sector is strong, RF +2.9%,  Q4 EPS of $0.27 beats by 1 cent. Revenue of $1.47B (+5.8% Y/Y) beats by $30M.  MS +2.9%, GS +2.1%, C +1.2%, FRC +4.6%. NVDA +2.5% to finish above $230 , after BofA raises its PT to $275 from $251. A...

The market is taking a breath today while all three indices have mild pullback. There is still no sign of budget bill as the deadline to avoid Government Shutdown is tomorrow . "Investors are positioned for an upside acceleration in equities that has become increasingly difficult to support given the weakness in credit ,” says Goldman strategist John Marshall. Therefore he suggests to buy puts to hedge. Crude -0.33% to $63.76. Gold -0.94% to $1,326.60. China 2017 GDP growth 6.9% , better than expected. A new Gallup poll shows that China is considered as "World Leader" (31%). The votes for US slide from 48% in 2016 to 30% after Trump took the office. I believe Chinese Tech stocks are still very attractive even after the recent rally. Winners WYN +4.8% , as the company announces that it acquired La Quinta's ( LQ +3.7% ) hotel franchise and hotel management businesses for $1.95B in cash. GNC +51.6% , huge short-squeeze, as the company reports same store sa...

WOW, I wasn't expecting the rally revives so quickly and violently after a mild pullback yesterday, although I believe the market is running higher in near term. Crude +0.24% to $63.88. Gold -0.69% to $1,327.90. Cryptocurrencies struggle again. Seriously, it is NOT healthy to trade those. The price is volatile and changing 24x7 --- no sleep-time, no weekends. It is nerve-racking and mental torture. Winners BA +4.8% , leading Dow Jones to pass 26,000 again. The bull-run which started late 2016 is incredible for such size company ($200B as today). PE is stretched to 30 now. MOMO +11.2%. YY +3.4% jumps after an upgrade to Buy from Neutral at Nomura with PT of $161 (from $80). IBM +2.7% , received double-upgrade from Barclays from Underweight to Overweight with PT from $133 to $192 . Moreover, IBM and Maersk have launched a company using blockchain tech to track international cargo. IBM is actually leading in blockchain technologies, which gives the company huge potentia...

Down Jones reached 26,000 briefly before the whole market turned to bleeding mode. Government shutdown is due this Friday if no budget deal is reached. The deadline has extended twice. Meanwhile, the new round of earnings keeps coming as Citibank started this morning. I believe the pullback will attract more fresh money into the market given the unbeaten sentiments. Here is an investment idea I wrote during the weekend " Investing in Artificial Intelligence ". Commodities: Crude -0.64% to $63.89. Gold +0.31% to $1,339.00.  Cryptocurrency has a bloodbath today. Bitcoin, Ethereum, Litecoin and Ripple all fall off cliff. RIOT -16.5%, OSTK -11%, KODK -7.6%, SQ -4.7%.... Winners BA -0.2% : Baird raised its PT to $433 from $380. Citibank also lifted its PT to $380 from $305, keeping a Buy rating. CAT -0.6% . These two were leading Dow Jones in the morning. Citibank (C +0.4%) , Q4 EPS of $1.28 beats by $0.09. Revenue of $17.26B (+1.5% Y/Y) beats by $40M. $3B charge ...