by Ian Harvey
October 14, 2019
The Past Week…..
Stocks rallied Friday. It was a case of worry and negativity doing a 180 degree turnaround to settle into an extreme rally situation.
Bullish momentum accelerated into the close on Friday after President Donald Trump confirmed, speaking alongside Chinese Vice Premier Liu He in the Oval Office, that the two countries have reached a "very substantial phase one deal," with phase two to follow "almost immediately."
As a result, the major equity benchmarks bounced out of negative week-to-date territory to close firmly higher.
Details on the trade talks can be found in these two articles.....
The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite were up by more than 1% for the week.
EARNINGS PREDICTIONS RESULTS FOR WEEK BEGINNING OCTOBER 07, 2019
|DATE||TRADE||EXITING BEFORE EARNINGS||GAIN/LOSS AFTER EARNINGS|
|October 08, 2019||AZZ OCT 18 2019 45.000 CALL||140% P.P||-80%|
|October 08, 2019||DPZ OCT 18 2019 240.000 PUT||35% P.P||105% P.P|
|October 08, 2019||LEVI OCT 18 2019 19.000 PUT||170% P.P||250% P.P|
|October 10, 2019||DAL OCT 18 2019 55.000 CALL||71% P.P||-36%|
|October 11, 2019||FAST OCT 18 2019 32.500 CALL||84% P.P||979% P.P|
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Stock Market Expectations for the Week Ahead…..
Stock market expectations may be different compared to last week where investors were waiting for the end result based on the US-China trade talks.
As to further stock market expectations, with earnings kicking off in the week ahead, will give some insight as to how much the trade war has affected the bottom line on companies.
Monday is Columbus Day in the U.S., with the bond market closed, though regular exchanges will remain open. A handful of housing reports are also on the docket, as well as a fresh dose of manufacturing numbers.
Stocks that are trade sensitive and are set to win the most from the trade talk resolution, and which will delay tariff hikes scheduled to kick in this week, would be Apple, Nike and Caterpillar and also contains many retail names such as Best Buy, Kohl’s and Honeywell, as well as Floor & Décor, Advance Auto Parts and Restoration Hardware.
Other tariff affected companies that should benefit are chipmakers Qorvo, Qualcomm, Micron Technology, Nvidia, Broadcom and Intel. As well, Casino operators Wynn Resorts and Las Vegas Sands that relies heavily on their revenue in China.
Stock Market Calendar for the Week Ahead
Besides earnings, some important economic reports are being released, including retail sales on Wednesday and industrial production Thursday.
Stock Market Expectations for Earnings
Major banks and financial companies will begin reporting Tuesday. But by the end of the week, a smattering of industrial, tech, transportation and consumer names will also have reported. United Airlines reports Tuesday, and CSX reports Wednesday.
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 should bring plenty of continuing good news moving forward, and if the economy holds off a recession, that means there will be plenty of dry powder on the sidelines to fuel another acceleration on Wall Street, due to the big move to money markets in previous weeks.
Investors, facing a constant drumbeat of headline risk, have headed out of higher risk investments, such as the stock market, as a way protect cash until the storms clear.
There’s been enough headlines, whether you’re talking politics, trade concerns or whether or not we’re heading into recession for the money to go into those markets; but this is likely to change if all goes according to plan based on the outcome of the trade talks.
Stocks, in fact, have been on a roller coaster for the past year, tumbling at signs of a break in the U.S.-China talks then rallying on any ray of hope. The Dow Jones Industrial Average surged more than 400 points Friday on some positive sentiments out of the White House that this week’s trade talks could yield fruit.
Trade and tariff fears are peaking and the Federal Reserve is looking like a bullish driver.
However, as an investor, you need to take into consideration your own economics, your risk tolerance, time horizon and financial goals before reconfiguring your investment portfolios. This is an appropriate time where you shouldn’t be overly bearish, or overly bullish; moderation is the name of the game at this stage!
Overall though, it appears that the way ahead points to the stock market moving upwards!
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earnings predictions for the week ahead, and profitable trades provided to
members in real time, join us at Stock Options Made Easy today!