Down goes the Dow

Tesla roaring back today

What are the chances of banks going under this time around? I would think banks would be way better prepared and positioned now than in 2007, but that's not necessarily a certainty. With so many people out of work and a huge recession coming, I would expect many people to be unable to pay their loans... However, assuming banks do survive, this could be a huge opportunity. KRE and KBE are down almost 50% from 52-week highs...

Assuming US oil eventually comes back, Vanguard's energy ETF is an insane steal right now too: down 50% from 52-week highs with a dividend yield percent over 6%.

PRD wrote:

What are the chances of banks going under this time around? I would think banks would be way better prepared and positioned now than in 2007, but that's not necessarily a certainty. With so many people out of work and a huge recession coming, I would expect many people to be unable to pay their loans... However, assuming banks do survive, this could be a huge opportunity. KRE and KBE are down almost 50% from 52-week highs...

Assuming US oil eventually comes back, Vanguard's energy ETF is an insane steal right now too: down 50% from 52-week highs with a dividend yield percent over 6%.

I picked up Energy Select Sector SPDR Fund (XLE) on that day of the huge drop when futures went negative, what was it, Tuesday? Already up 5%. I checked out quite a few and this one looked good in terms of larger market cap and low fee. It appears to be primarily focused on oil and gas. Chevron and Exxon Mobile make up almost half their holdings on a percentage basis,

Probably will pick up some more next week.

comparing XLE to VDE (Vanguard's Energy ETF), they are essentially identical.

seattle prattle wrote:

comparing XLE to VDE (Vanguard's Energy ETF), they are essentially identical.

They are very similar, but VDE is much more diversified. The big dogs still make up sizeable percentages of the fund but less so than with XLE... Honestly not entirely sure which is the better approach right now, but I'm going with VDE.

Part of me thinks US oil will come back to previous highs, but part of me is skeptical also. US oil IS much more expensive than oil produced elsewhere in the world... It's possible it could be somewhat of a fading industry in the US, but the potential upside is very, very tempting right now as it could mean doubling your money in 2-4 years.

I'm kind of more interested in the bank ETFs... Even if they only go up halfway from here to 52 week highs, that's still more than a 25% increase (with dividend yield of around 4%), which is more upside than the S and P 500 would make hitting new highs. Bank of New York Mellon also looks attractive since its way of producing revenue is kind of an anomaly, and it posted greater gains per share for Q1 2020 than in Q1 2019. The upside to hitting 52 week highs is about 40% from current levels...

Lots of opportunities, boys. Just gotta pick the right moves which is obviously easier said than done. I dumped a lot of money into major airlines a month ago and am starting to get a bit nervous about that move, but I'm holding for now. They can't ALL go bankrupt, right? (*laughs nervously*)...

VDE and XLE each track a separate energy ETF. The one VDE tracks seems a little broader, but really, how much difference can there be? Their both energy sector indexes for crying out loud,

Perhaps most telling for me, given any time frame you choose, XLE performed a couple of percent better than VDE. Put that in your pipeline and pump it.

But I've owned a really small holding of VDE for many years and dumped it a month or two ago, never making much of anything off of it. I had one of the airlines, too, and only bought it back a week ago because the appeal of buying it at a 20% discount was just too appealing,

But for the most part, I am pretty much focused on the tech sector and still prefer the outlook of that sector over the beaten up banks, energy, airlines, or what have you, even at the current levels.

Earnie wrote:

Earnings Scorecard: For Q1 2020 (with 24% of the companies in the S&P 500 reporting actual results), 60% of S&P 500 companies have reported a positive EPS surprise and 60% of S&P 500 companies have reported a positive revenue surprise.

The latest from

@FactSet

on companies flying blind

Of 122 companies S&P 500 companies that have provided guidance, 50 (41%) commented on EPS guidance for current year. Of these 50 companies, 30 (60%) withdrew/had already withdrawn previous EPS guidance for FY 2020.

Yeah, same ol’ “positive surprise” BS!!

Are you worried about the dividend being cut dramatically given the current situation, or is that secondary and you’re looking to make money by selling if the share price rises?

[quote]PRD wrote:

What are the chances of banks going under this time around?

The Big Banks will not go under until the US govt does.

The Fed gives the Big Banks unlimited supplies of $$

Ghost of Igloi wrote:

Earnie wrote:

Earnings Scorecard: For Q1 2020 (with 24% of the companies in the S&P 500 reporting actual results), 60% of S&P 500 companies have reported a positive EPS surprise and 60% of S&P 500 companies have reported a positive revenue surprise.

The latest from

@FactSet

on companies flying blind

Of 122 companies S&P 500 companies that have provided guidance, 50 (41%) commented on EPS guidance for current year. Of these 50 companies, 30 (60%) withdrew/had already withdrawn previous EPS guidance for FY 2020.

So less than 25% of the companies that provided guidance have withdrawn that guidance. Naturally that means over 75% are still comfortable with their guidance. This seems rather bullish to me.

I’d call it silence & hoping no one prosecutes them for not updating their guidance.

agip wrote:

jesseriley wrote:

I just don’t see the market pricing in the pandemic. Countries far more organized than USA are taking measures that involve huge personal responsibility for following the guidelines. Not having these measures (as is the case in most countries, including USA) either means longer lockdowns or more deaths, both of which are de-stabilizing economically.

And of course even the best-organized response presumably has major economic consequences.

Agreed.

The us stock market is seeing positive things that I don’t see. I’ve been selling.

Investors have just accepted profits will be lower. Higher and higher profits at any cost was the sentiment for driving stock prices through 2017-2019 but now it's changed. Besides, where else are people gonna put their money?

J. Hardy wrote:

Ghost of Igloi wrote:

The latest from

@FactSet

on companies flying blind

Of 122 companies S&P 500 companies that have provided guidance, 50 (41%) commented on EPS guidance for current year. Of these 50 companies, 30 (60%) withdrew/had already withdrawn previous EPS guidance for FY 2020.

So less than 25% of the companies that provided guidance have withdrawn that guidance. Naturally that means over 75% are still comfortable with their guidance. This seems rather bullish to me.

I sold on the way down. Bollinger Bands turned positive about a week ago and I've started buying back in stocks that have moved above their mid-Bands.

Interestingly for technicians, the standard Bollinger band of 20, 2 (2 standard deviations of the 20 day moving average) no longer works in this market. Resetting it to 12, 2 gets the bands to fit. This makes sense when you consider that market moves that might take weeks are now happening in a couple of days. Market movements have accelerated.

SBUX is a good example. Using the 20 day BB, the stock drops significantly in Feb without touching the upper band. (Touching the upper band is a requirement in BB theory to mark a potential top.) Then, it breaks through the bottom band several times on the way down in Feb and March... not a signal per se, but an indication that the BB doesn't work at this setting. You couldn't use the traditional (20,2) BB to trade this stock.

However, change the BB to 12 days and it suddenly fits... price touches the top band on Feb 13-14 and then turns down. On the way down, it "rides the band" rather than breaking through the lower band. It finally moves up and crosses the mid-band on 3/24, signaling a bullish move. It's still above the (12,2) mid-band today, which indicates the stock is still going up. The band is getting really narrow so the next signal should come this week.

can I post with a different handle wrote:

seattle prattle wrote:

Potential stock appreciation primarily, and the dividend caught my attention as well, but was not the primary reason, so i wasn't banking on it.

I picked up Energy Select Sector SPDR Fund (XLE) on that day of the huge drop when futures went negative, what was it, Tuesday? Already up 5%. I checked out quite a few and this one looked good in terms of larger market cap and low fee. It appears to be primarily focused on oil and gas. Chevron and Exxon Mobile make up almost half their holdings on a percentage basis,

Probably will pick up some more next week.

Are you worried about the dividend being cut dramatically given the current situation, or is that secondary and you’re looking to make money by selling if the share price rises?

FIXED:

can I post with a different handle wrote:

seattle prattle wrote:

I picked up Energy Select Sector SPDR Fund (XLE) on that day of the huge drop when futures went negative, what was it, Tuesday? Already up 5%. I checked out quite a few and this one looked good in terms of larger market cap and low fee. It appears to be primarily focused on oil and gas. Chevron and Exxon Mobile make up almost half their holdings on a percentage basis,

Probably will pick up some more next week.

Are you worried about the dividend being cut dramatically given the current situation, or is that secondary and you’re looking to make money by selling if the share price rises?

Potential stock appreciation primarily, and the dividend caught my attention as well, but was not the primary reason, so i wasn't banking on it.

J. Hardy wrote:

Ghost of Igloi wrote:

The latest from

@FactSet

on companies flying blind

Of 122 companies S&P 500 companies that have provided guidance, 50 (41%) commented on EPS guidance for current year. Of these 50 companies, 30 (60%) withdrew/had already withdrawn previous EPS guidance for FY 2020.

So less than 25% of the companies that provided guidance have withdrawn that guidance. Naturally that means over 75% are still comfortable with their guidance. This seems rather bullish to me.

I agree that the only surprising thing about this is the small number of companies that have withdrawn their guidance (ok, and maybe that Igy posted something bullish). There is obviously a ton of uncertainty with the effect Covid-19 will have on the economy. Why haven’t more companies done the same? Does their guidance already account for the uncertainty? Or do they know something the others do not?