- Gunman kills two, wounds seven in Louisiana theater before killing himself (Reuters)
- Health insurer Anthem to buy Cigna in $54.2 billion deal (Reuters)
- Murder, Poisoning, Raids: It’s Election Season in Russia (BBG)
- Lagarde Push for Greece Debt Relief Challenges Merkel (Bloomberg)
- Fund Boss’s Gamble on Health Law Pays Off Big (WSJ)
- Wall Street Cranks Up Its Outlook for Amazon After It Delivers Monster Earnings Report (BBG)
- China's Richest Man Marks Push Into Hollywood With Jake Gyllenhaal Movie (BBG)
- West Africa's alarming growth industry - meth (Reuters)
The real reason why retail investors weren't impacted by the NYSE's halt is a hard truth... to retail investors, the NYSE is always dark
Where Do Retail Investor Orders Go? The simple answer: to the highest contracted bidder. Stock "wholesalers" or internalizers like Citadel or Knight pay retail brokers lots of cash to execute retail trades, essentially creating a "third market". Why? Because in a high frequency trading world, where stock prices have never been more fuzzy to the end user, but crystal clear to those that spend enormous sums on colocation and PhD employees, it's never been easier to print money (not unlike Bernie Madoff's scheme in the 90's). But that is the subject of a much, much longer story. Someone should write a book.
As the following clip from Turkey's DHA news agency shows, one may wonder if NATO-member Turkey's land invasion of Syria, which many have said was long overdue following months of rhetoric and belligerent posturing, under the pretext of ISIS "liberation", has just begun.
We always keep a weather eye on the state of retail investing in the U.S. There is, of course, the old saw that this batch of buyers doesn’t get involved until the top; therefore, it makes sense to see if they are getting too “Bulled up”. Then there is the fact that retail “Cult” stocks can hold premium valuations far longer than those without such sponsorship.
Apple is expected to be the largest contributor to earnings growth for the Information Technology sector for Q2 2015. The blended earnings growth rate (combines actual results for companies that have reported and estimated results for companies yet to report) for the Information Technology sector is 0.2%. Exclude Apple, and the sector would report a year-over-year decline in earnings of 6.0%.
- Stocks sour as Apple results leave bitter aftertaste (Reuters)
- Awkward Alliance Running Germany Exposed by Greek Crisis (BBG)
- Apple Faces Old Question of What’s Next After Record Profit (BBG)
- Lawmakers, White House Explore Tax Revamp for U.S. Firms Overseas (WSJ)
- Digital Misfits Link JPMorgan Hack to Pump-and-Dump Fraud (BBG)
- More Debt Traders at Risk as European Banks Report Results (BBG)
- Iran rejects sanctions extension beyond 10 years (Reuters)
Apple Plunges Despite EPS Beat On iPhone Sales Miss, Drop In China Sales, Weak Guidance And Strong Dollar WarningSubmitted by Tyler Durden on 07/21/2015 16:48 -0400
The company which was carrying the fate of not only the Dow Jones and the S&P 500 on its shoulders had taken the stairs up, and just took the elevator down.
You don’t hear it much, but the S&P 500 has been a bit of a “One trick pony” in 2015. No, it isn’t the 4% weighting in Apple that makes it such; it is the combination of a 15% weighting in Health Care AND that sector’s 12.9% return year to date. When you compare the S&P 500’s price return year to date of 3.37%, you can see that the Health Care sector’s contribution is essentially just over half the market’s price return for 2015 (12.9 times 15% is 1.90 of that 3.37). Layer on the fact that 5 of the 10 industry sectors in the S&P 500 are still down on the year: Materials (-2.7%), Industrials (-2.9%), Telecomm (-0.7%), Utilities (-8.6%) and Energy (-9.7%).
This charmed circle includes Google, Amazon, Baidu, Facebook, Saleforce.com, Netflix, Pandora, Tesla, LinkedIn, ServiceNow, Splunk, Workday, Ylep, Priceline, QLIK Technologies and Yandex. Taken altogether, their market cap clocked in at $1.3 trillion on Friday. That compares to just $21 billion of LTM net income for the entire index combined. The talking heads, of course, would urge not to be troubled. After all, what’s a 61X trailing PE among today’s leading tech growth companies?
If pouring billions of dollars into outrageous "look at me" buildings isn't tempting the gods, what is it?
... of the 6,657 days since 1965 when the S&P 500 closed up, Friday had the 6,627th worst breadth... the last 12 times this situation occurred, the S&P 500 was lower 3 weeks later each time by an average of 4%. Also of note, for what it is worth, this is the closest to a 52-week high the S&P 500 has ever been on any of the occurrences.
"Giddy up! The Four Horsemen of Tech", July 17, 2015 - "Google, Apple, Amazon, and Facebook -- helped push the Nasdaq to an all-time high Friday morning."
"Cramer's Four Horsemen Of Tech" - September 25, 2007 "Apple, Research in Motion, Google and Amazon.com are up 31% as a group since he recommended them back on June 6. Despite the market being down today, each of these four stocks hit new highs."
"The Four Horsemen Of The New Economy" - October 2, 2000 "More than any other collection of companies, Oracle, Sun Microsystems, EMC, and Cisco Systems represent the building blocks of Net business."
The power, if not necessarily the Truth, resides primarily with the bulls right now or at least it does in certain parts of the market. The NASDAQ broke out last week to new highs but the S&P 500 and even the more speculative Russell 2000 did not. The market’s advance continues to narrow, to concentrate among fewer and fewer names. Bulls will tell you that this is just a pause and the advance will broaden out. And if enough people believe that and there isn’t any convincing reason to sell, they might be right for a while. But at some point the rose colored glasses will come off and someone might wonder aloud why Celgene paid $7 billion for a company with trailing 12 month revenue of $4.5 million. Someone might wonder why Netflix is worth $48 billion and CBS is only worth $27 billion with more than twice the revenue, better margins, a higher ROE and the ability to produce positive cash flow. Until then it’s just a dream within a dream and somebody keeps hitting snooze on the alarm clock.
We love reading quotes from Hussman in 2000 and 2007. The air is getting pretty thin up here. A stock market driven by Google, Apple, Netflix and a few other tech darlings with no earnings does not make a market. Time is running out for the bulls. The same morons on CNBC ridiculed and scorned his facts then and they scorn and ridicule him now. Do we trust Jim Cramer and Steve Liesman or John Hussman? Guess.