by Ian Harvey
October 07, 2019
The Past Week…..
Stock market expectations for last week were fairly accurate, with plenty of volatility thrown into the mix!
The Dow and S&P 500 fell for a third straight week. That is their longest weekly losing streak since August.
The Dow Jones Industrial Average dropped 0.9% this week while the S&P 500 slid about 0.3%. Overall, the two averages posted their first three-week losing streak since August.
Wall Street’s poor performance for the week comes after a disappointing U.S. manufacturing data report sparked fears of a recession. The report itself pointed to trade as a key source of weakness for the manufacturing sector, making next week’s trade talks the key focus for traders.
EARNINGS PREDICTIONS RESULTS FOR WEEK BEGINNING SEPTEMBER 09
|DATE||TRADE||EXITING BEFORE EARNINGS||GAIN/LOSS AFTER EARNINGS|
|September 24, 2019||KMX OCT 18 2019 87.500 CALL||61% P.P||65% P.P|
|September 24, 2019||BB OCT 18 2019 7.500 CALL||9% P.P||-98%|
|September 24, 2019||NKE OCT 18 2019 90.000 CALL||63% P.P.||208% P.P.|
|September 26, 2019||ACN OCT 18 2019 190.000 PUT||36% P.P.||31% P.P.|
|September 26, 2019||RAD OCT 18 2019 7.000 CALL||47% P.P.||245% P.P.|
|September 26, 2019||MU OCT 18 2019 50.000 CALL||18% P.P.||-70%|
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Stock Market Expectations for the Week Ahead…..
Stock market expectations are that stocks will try to regain their momentum as China and the U.S. hold long-awaited trade negotiations in Washington.
Chinese and U.S. negotiators are expected to meet next Thursday and Friday.
Also, other headwinds coming out of Washington, D.C., to deal with, are a trade agreement with Canada and Mexico that would replace NAFTA and the Federal Reserve.
The probability of a third Fed rate cut increased last week amid weaker-than-forecast services and jobs-growth data. Market expectations for an October rate cut rose to around 80% from about 50% in the previous week.
An interesting view comes from Loretta Mester, president and CEO of the Federal Reserve Bank of Cleveland saying “The economy is still holding up well thanks to the strength of consumers.”
“Consumers continue to maintain the economy’s strength against slowing pressures, as evidenced by Friday’s jobs report showing the unemployment rate at 3.5%.”
Stock Market Calendar for the Week Ahead
Besides political headlines, the Federal Reserve will release the minutes from its September meeting on Wednesday. The Fed cut rates last month by 25 basis points for the second time this year, citing “the implications of global developments for the economic outlook” among other factors.
Stock Market Expectations for Earnings
Besides some of those companies mentioned above, which will be part of our stock market expectations considerations for members of “Earnings Predictions;” there are several that will be recommended to other members of - “Armchair Traders,” “Cut-to-the-Chase” and “Mentorship” - such as mentioned below…..
Action to Take Based on the Stock Market Expectations…..
Stock market expectations going forward show that we are in historic times. And historic times often produce record results.
We're now 10½ years, and more than 342% into this bull market.
The longest bull market on record was 12.3 years for a 582% return.
These historic times will lead to a record breaking bull market in both length and magnitude. The current economic backdrop is more than enough to accomplish that.
And if trade talks go well this week; expect the stock market to soar.
One of the major reasons that stock market expectations are not being met, and a setback has been in place for the past three weeks, is that investors are trading scared! The fourth quarter is obviously on traders’ minds, and there is an element of worry that a repeat of last year’s fourth quarter will enter the picture.
Trade and tariff fears are peaking and the Federal Reserve is looking like a bullish driver.
Therefore, it seems to be that the way is forward and upward!
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