Archive for the ‘Market Update’ Category

Big Numbers In First Data

First Data (FDC), the global payment infrastructure vendor is moving to new 2 year highs (along with a lot of other names) as it crosses the $20 level. Significant option activity has taken place today which is unusual for this name. Over 3,000 July 20 calls have traded around the $.60 level, over 5,000 Oct 20 calls have traded around the $1.50 level and over 11.000 Jan /19 21 calls have traded around the $1.65 zone. Put activity has been almost non existent. This name still has a modest valuation with a below market PE multiple of around 14X. It doesn’t garner near the attention of the more visible consumer payment vendors like PayPal and Square, which have been on fire for quite some time and sport extremely lofty valuations by comparison. FDC is a significant holding for a number of hedge funds, most prominently Omega Adviosrs and Glenview Capital as of their most recent filings. Might be a bit overextended short term, but worth keeping an eye on if it pulls back a bit.

The Best

and the worst.  From the S&P 500 Index, this year:

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Had tip Charlie Bilello

 

 

Growling Bears on GE

Amidst a very strong market to start the week, GE continues to fade as it drops below recent support at $14. For the most part, the analyst community remains negative to neutral on the name, with JP Morgan being the most vocal critic. Trading activity today is extremely lopsided to the bearish side, with over 35,000 June 13 puts trading for the most part between $.07-.12. These contracts expire in two weeks. Also, over 28,000 of the July 13 puts have traded around the $.35 level. By contrast the largest volume on the call side is only 12,000 of the June 8th 14 calls, part of which were likely liquidated ahead of their Friday expiration. Hard to say exactly what the motivation is for all the put activity….some appears to be roll downs from higher strike puts that were sold for a profit, some appears to be outright bearish speculation, and some might simply be hedging of stock positions. Whatever the case it is weighing heavily on the name as it trades at $13,80 at the time of this write up.

Just How Strong Was The Dow Jones Industrial Average Last Year?

This strong:  The Dow hit 71 all-time highs, the most in history, averaging more than 1 per week. 

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This year, quite a difference.  11 all-time highs, all in January, last on Jan 26th.

Hat tip Charlie Bilello of Pension Partners

Atlanta Fed Boosts GDP Forcast

The U.S. economy is expanding at a 4.8 percent annualized rate in the second quarter, the Atlanta Federal Reserve’s GDPNow forecast model showed on Friday.

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More from GDPNow:   The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2018 is 4.8 percent on June 1, up from 4.7 percent on May 31. The nowcasts for second-quarter real consumer spending growth and second-quarter real private fixed investment growth increased from 3.4 percent and 4.6 percent, respectively, to 3.5 percent and 5.4 percent, respectively, after the employment report from the U.S. Bureau of Labor Statistics, the construction spending report from the U.S. Census Bureau, and the Manufacturing ISM Report On Business from the Institute for Supply Management were released this morning.

Explaining the GDPNow forecast:   The growth rate of real gross domestic product (GDP) is a key indicator of economic activity, but the official estimate is released with a delay. Our GDPNow forecasting model provides a “nowcast” of the official estimate prior to its release by estimating GDP growth using a methodology similar to the one used by the U.S. Bureau of Economic Analysis.

GDPNow is not an official forecast of the Atlanta Fed. Rather, it is best viewed as a running estimate of real GDP growth based on available data for the current measured quarter. There are no subjective adjustments made to GDPNow—the estimate is based solely on the mathematical results of the model.

We expect complete silence from the media to follow. 

More here from Breibart.com:   www.breitbart.com

More On Today’s Stunning Jobs Report

From Zerohedge.com:   In May the number of full-time jobs rose from 127.753 million to 128.657 million, a 904K increase in one month, offset by a 625 plunge in low-quality, part-time jobs.

full time jobs may 2018

More:  Putting this surge in full-time jobs in context, it was the biggest monthly increase this century, and also on record if one excludes a few data revision prints recorded in the 1990s.

US Unemployment Rate moves down to 3.8%, matching April 2000 for the lowest level since 1969:

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Once again we believe its time to look back on one of the most completely wrong predictions made by a Nobel Prize winning economist(with 3 million twitter followers)just after the election.  We give you Paul Krugman:   “So we are very probably looking at a global recession, with no end in sight. I suppose we could get lucky somehow. But on economics, as on everything else, a terrible thing has just happened.”

Hat tip Zerohedge.com

‘Phenomenal’ Jobs Report

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Stocks are broadly higher this morning.  Bonds are selling off.

A few quick takes on this morning’s data: 

” Payrolls came in stronger than expected and average hourly earnings were better than expected as well. Following poor weather in March and April, we finally saw a rebound in May. No holes to poke here… these numbers are phenomenal.” — Thomas Simons, senior money market economist, Jefferies LLC.

“An upside surprise for May payrolls, with a +15,000 revision to the two previous months — but that keeps the three-month trend in private-sector payrolls at +178,000 (roughly the same pace as last year). Still, that’s enough to further reduce the unemployment rate — something that will worry Fed policymakers.” — Scott Brown, chief economist, Raymond James.

The economy and labor market appear to be firing on all cylinders, with all sectors showing strength. The big difference between now and a year ago, however, is that decent gains in manufacturing and mining are complementing the steady growth in service sector employment.” — Paul Ashworth, chief U.S. economist, Capital Economics.

“The big surprise here is average hourly earnings, which managed an above-trend increase despite facing two adverse calendar effects; May had an extra working day compared to normal, and the survey was conducted very early in the month. This suggests that the underlying data were very strong, though one month’s numbers don’t prove anything definitively.” — Ian Shepherdson, chief economist, Pantheon Macroeconomics.

Rollbacks matter…

Hat tip MarketWatch.com

Buckle Up

The next thirty days are historically weak.  The data shows it to be the weakest one month stretch over the course of a year for the S&P 500 Index.  Just flat out ugly seasonals:

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That being said, consider this: 

The S&P 500 is up +1.9% YTD with a day to go in May.

What happens if it closes up between 0-5% at end of May?

The rest of the year has been higher +6.8% on avg (since ’60) vs the avg yr up only +3.8% on avg the final 7 months.

Hat tip Bespoke Research and Ryan Detrick.

Thunder Child Tours Ireland

In record time!

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