Big,
The golden opportunity of the NASDAQ being at the same level it was a year ago while the earnings have declined? How come the market isn't exploding upward on what you say is good news?
Igy
Big,
The golden opportunity of the NASDAQ being at the same level it was a year ago while the earnings have declined? How come the market isn't exploding upward on what you say is good news?
Igy
Big,
No large company stock has maintained a PE of over 100 thru a full market cycle. So the odds are small that AMZN or NFLX can come anywhere close to maintaining the current stock price. Trading those stocks, well that is a different question, but at these prices there is far more risk than reward. But good luck on playing the game, but the best move is not to play.
Igy
Big Dog Investments wrote:
Ghost of Igloi wrote:Big,
Yes, Amazon's web hosting business is driving it's revenue, and if you feel that justifies paying 280 times for Q2 the equivalent EPS fine. The margin on the balance of its business is quite small, however AMZN is driving plenty of companies out of business. You may wish to temper your enthusiasm so you don't get de-fanged again.
Igy
Only you would think literally destroying WS estimates is a bad thing. I feel sorry for your clients. They have undoubtedly missed some golden opportunities.
Please do not feed the troll. Thank you.
Yes, the troll is the one that actually knows something about the markets.
Actually I was referring to you.
And I of you clueless one.....
I still own Ford stock and was reading about their results today. Interesting that there was such a disconnect between their results and GM just a few days ago.
One reason I bought into F was because I felt they would be brutally honest when things were not going all their way. And that is the way they sounded yesterday from management quotes.
At the same time, by any reasonable standard they had a good quarter and will remain very profitable this year. They are just not quite getting the high margins they had been getting in previous months. But that is something industry experts had expected all along and in fact the experts were surprised it had taken so long for margins to narrow. So I still feel pretty good about Ford in the long run. It makes me wonder if GM is being fully honest with their results.
U.S. stock futures slipped Friday as investors assumed a cautious posture ahead of a reading of second-quarter U.S. economic growth and another raft on earnings.
Disappointment over Bank of Japan's latest easing action also weighed on sentiment.
Futures for the Dow Jones Industrial Average dropped 33 points, or 0.2%, to 18,343, while those for the S&P 500 index fell 2.45 points, or 0.1%, to 2,161.25. Futures for the Nasdaq-100 index rose 4.75 points, or 0.1%, to 4,724.25, propelled higher by solid tech earnings.
Headed into July's last trading day, the S&P 500 index and Dow industrials were both looking at monthly gains of more than 3%. The Nasdaq Composite was set for an almost 7% rally for the month.
For the week, however, the Nasdaq was the only index poised for a gain, with the two other benchmarks looking at small losses.
"A moderate stimulus package from the Bank of Japan overnight got the final trading day of the week off to a disappointing start, leaving traders to look towards the large number of earnings and data releases today to pick them up again," said Craig Erlam, senior market analyst at Oanda, in a note.
Early trading was marked by the Bank of Japan, which fell short of the market's hope for a raft of powerful stimulus to boost the country's stubbornly low inflation. The BOJ fell short of expectations by making no changes to interest rates or to its bond-buying program. However, the central bank did, increase its purchase of exchange-traded funds to 6 trillion yen ($57 billion) annually from Yen3.3 trillion previously.
The yen rallied after the move, sending the dollar down to Yen103.58, from Yen105.27 late Thursday in New York. Japan's Nikkei 225 index initially declined, but ended the day 0.6% higher.
The ICE dollar index fell 0.5% to 96.222.
In the U.S., the focus will be on the first estimate of second-quarter gross domestic product. Economists polled by MarketWatch expect a reading of 2.6% growth during the quarter, up from 1.1% in the first three months of the year.
More FANG for your buck...
"Alphabet reported second-quarter revenue of $21.5 billion and earnings per share of $8.42, an increase of 21 percent from the same quarter a year ago. Wall Street had expected earnings of $20.76 billion and EPS of $8.03.
Alphabet's positive earnings report added to a good week for Wall Street's major tech stocks. Facebook (FB) and Apple (AAPL) also reported strong earnings this week, as did Amazon.com (AMZN) on Thursday."
Feb. 3, 2016
Ghost of Igloi wrote:
POTO,
Considering that the FANG stocks were a major influence on the positive return of the S&P 500 for 2015, the glaring underperformance in 2016 is significant. Furthermore, Amazon and Netflix are two of the most overvalued stocks in the index. Facebook and Google are two of the largest market capitalization stocks in the index. Tracking the performance of these four stocks will say much for the direction of this market, which in the end will be the hurt locker for long only stock investors.
Igy
Another record high for the S&P!
The stock market ended the month on a high note, with the S&P 500 closing just a few points off a record level. All three main indexes posted solid monthly gains. For the benchmark S&P 500 and Dow industrials this was the fifth consecutive monthly advance. For the Nasdaq Composite, the monthly gain was the largest since March. The S&P 500 index hit an intraday record level at 2,177.13, but closed off the highs. The index rose 3.54 points, or 0.2% to 2,173.60, finishing the week flat. Over the month, the index of large-cap stocks gained 3.6%. The Dow Jones Industrial Average slipped 24.11 points, 0.1% to 18,432.24 and posted a 0.8% loss over the week. Over the month, the blue-chip index gained 2.8%. Meanwhile, the Nasdaq Composite Index ended the session up 7.15 points, or 0.1%, at 5,162.13, posting a 1.2% gain over the week and a 6.6% gain over the month.
So much for "Sell in May and go away."
To DGTD Historian,
July 28, 2016
Year-to- performance
NFLX. -19.872%
AMZN +11.351%
SPY (SPDR S&P 500 Trust) +6.328% and 2.014% dividend yield
TLT (iShares 20+ Year Treasury ETF) +16.42% and 2.199 dividend yield
A historian should understand the context of time as well as place. Of course that is too much to ask. Or study up.
Igy
Big,
Read my post to ryan foreman for a more accurate portrayal of AMZN's earnings. Or choose to ignore at your own risk.
Igy
Say wha?,
Is it time to cheer the new high? Why no love for the TLT (iShares 20+ Year Treasury ETF) it has outperformed the SPY by a full 10%!
But of course you don't understand the contest of today's move. Second quarter GDP came in at 1.2% a full percentage below the expected number. Furthermore, the first quarter was graded down to 0.9%. So with lower economic growth Wall Street and financial media tells us the Fed will be on hold and that supports rising multiples. What Wall Street and the financial media won't tell you is that there is no historic data that supports this view. In fact it is simple intuition that lower interest rates and slower growth are linked and symptoms of a sick economy, both of which would not support rising multiples (and resulting stock prices).
But you will believe what you are spoon fed. Eat well my friend.
Igy
So Mr. MarketWatch poster, let's look at the actual earnings so far this quarter. As of 7/28 with 66.4% (317) of S&P 500 companies reporting for Q22016: 38.5 beat on GAAP earnings, 54.5% beat on sales, and 70% beat on non-GAAP earnings. Of course if you believe stock based compensation is not a cost of doing business use non-GAAP. And if you believe the cost of investments in failed or unprofitable businesses is not a cost of doing business then use non-GAAP.
So Mr. MarketWatch be skeptical of what you freely quote without question. For example one year ago Wall Street projected 2016 S&P 500 EPS at $132.36 a share, at the start of the year it was downgraded to $125.56 a share, at the end of June down to $114.31 a share, and yesterday lowered to $112.85. To reach that number would require record quarters from now until year end.
Using the current earnings and the S&P 500 Thursday closing price, the GAAP PE is 24.51. One would have to go back to 2009 to get a number that high. In case you don't understand Mr. MarketWatch higher is not good.
Igy
This photo is for Joe Beets, Mr. MarketWatch, DGTD Historian, Big Dog, Sally V, Say Wha? and the Muppets of DGTD:
https://mobile.twitter.com/hussmanjp/media/grid?idx=1
Courtesy....the Igy
Mango Jerry,
Sorry I left you out, my bad. Enjoy with a beer and mango salsa.
https://mobile.twitter.com/hussmanjp/media/grid?idx=1
Igy
I feel fine still owning Ford. My plan is to hold long term, (barring major unforeseen changes) and go the DRIP route. I may buy more if it drops into the $11 range. One thing Ford started doing was a special dividend. The idea is that if they have a pretty good year, they will reward investors with the special dividend. But its not part of the yield and if the headwinds look dicey they will not pay it. But they paid that special dividend this past march and I think it remains a good chance they do it again. If you include that special dividend, the current dividend yield at these prices is about 7 percent. So even if the stock stays flat, a few years of collecting the dividend and doing DRIP you you have a respectable return.