The 2019 Bull vs Bear Summit

Stock Market Update Tuesday, January 15th, 2019

The major indices began the day slightly higher after China pledged more fiscal stimulus to stabilize their slowing economy. The rally continued in early trading but right around 10:00am stocks pulled back.

Trading was sideways until a lunch rally pushed the major indices to session highs.

Then around 2pm ET, the major indices pulled back again after British Parliament voted overwhelmingly against Prime Minister Theresa May’s Brexit deal.

But the dip didn’t last for long, especially since traders weren’t expecting much from the vote. The major indices bounced right back and finished the day near session highs.

Today’s move helped the major indices close above some key numbers. The S&P is back above 2,600, the DOW is trading above 24,000 again, and the NASDAQ has cleared 7,000.

These are numbers we haven’t seen in over a month!


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Here’s where the major indices ended the day:

  • The S&P finished with a 1.1% gain. Up 28 points, the S&P ended at 2,610.
  • The DOW ended higher by 0.7%. Adding 156 points, the DOW closed at 24,066.
  • The NASDAQ was up 1.7%. With a 118 point gain, the NASDAQ finished at 7,024.
  • Bitcoin finished lower by 2.7%. Down $100, Bitcoin ended at $3,545.

Crude Oil (CL) rallied most of the day, snapping a 2-day losing streak. Up 3.0%, CL ended at $52.03 a barrel.

Earnings were slightly weaker than expected from JPMorgan (JPM) and Wells Fargo (WFC). JPM shook off early losses but finished the day with a 0.7% gain. While WFC closed with a 1.6% loss.

Netflix (NFLX) announced the biggest subscription increase ever by raising subscription prices by as much as 18%. The company plans to provide more original content with the extra revenue. Traders seemed okay with the increase, considering the stock jumped 6.5%.

The focus on earnings will continue tomorrow, with Bank of America (BAC), BlackRock (BLK), Goldman Sachs (GS), PNC Financial (PNC) and U.S. Bancorp (USB) reporting before the open.

Here is the economic calendar for the week:

Real Time Economic Calendar provided by Investing.com.


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Source: RockwellTrading by Markus Heitkoetter | Original Link

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January 15 – The Most Important Day of the Year

We’re just two weeks into 2019 — and many people actually believe the sky is falling.

Especially in the financial markets.

Yes, we’re more than three weeks into a partial government shutdown in the U.S.

Global economic growth projections have fallen as the trade war drags on.

But I promise you, things are NOT as bad as some would say.

The unemployment rate in America has fallen to a 50-year-plus low. And jobs are still being created by the thousands every month.

Inflation — and interest rates — are still low.

If you’ve been following me for a while, I know I sound like a broken record here.

But too many traders are focusing on the bad news… and setting themselves up for a massive let-down if the sky DOESN’T fall.

In fact, the smart money is already betting on good news in the stock market.

The S&P 500 is up 11% from its December low.

And today, Tuesday, Jan. 15, stocks could explode higher.

Here’s why…


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Get Ready for the Season of Reason

It’s my favorite time of the year again…

Earnings season!

Last quarter (Q3 2018), S&P 500 earnings grew by a whopping 27% year-over-year.

This quarter, earnings are expected to grow 10.6%, according to FactSet.

To be sure, that’s a slowdown from the previous quarter. But if the earnings projection holds, it will the fifth straight quarter of double-digit earnings growth for the S&P.

And that’s still pretty damn good after ten years of economic expansion in America.

On Tuesday, JPMorgan & Chase Co. (JPM) will kick off the fun with their fourth-quarter report…

Big Boom for Big Banks

You’ll recall that banks did not fare well last year, as interest rate spreads fell and the trade war weighted on corporate financing decisions.

But…

The Trump administration spearheaded major financial deregulation last year.

And the changes have allowed banks to put more of their capital to work than they’ve been able to in ten years.

As a result, we should see a big boost in bottom line growth for banks this quarter.

Wall Street agrees…

JPMorgan is expected to report fourth-quarter earnings growth of 110% from the same period last year. That’s a HUGE bump for America’s largest bank by assets.

Bank of America, which reports on Wednesday, should report a rise in quarterly earnings of 38%.

And analysts forecast a 19% bump in Q4 earnings for legendary investment bank Morgan Stanley when they report on Thursday.

For a big boom in your portfolio, consider adding some bank shares ahead of the major reports this week.

The Only Energy Drink You Need This Season

As you may know, tech often leads the way for corporate earnings.

Not this quarter…

The energy sector has the highest growth projection in the entire market at 73%, FactSet notes.

And with Schlumberger Inc.’s (SLB) report on Friday, we’ll get one our first peeks into Big Oil.

The oil services company is expected to post fourth-quarter earnings growth of 77%. And analysts expect a 15% rise in revenue.

SLB has either met or exceeded estimates in each of the last eight quarters.

Better still…

If you’re looking for a bargain, energy stocks are cheap right now.

XLE — the exchange-traded fund that tracks large cap oil stocks — boasts a forward P/E ratio of just 13. That’s a 13% discount to the S&P 500, which trades at 15 times expected earnings right now.

These names have been volatile over the last few months.

But adding a little energy exposure to your portfolio could go a long way if energy delivers the goods this earnings season.


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Planes, Trains, and Automobiles… Industrials Earnings Set to Soar This Quarter

These companies got little love in 2018, but industrial names are primed for a big pop this year.

Fourth-quarter industrial sector earnings are expected to grow by 14%. That’s the second-highest growth projection of all eleven sectors.

These stocks could take off when Delta Air Lines Inc. (DAL) gives their quarterly report on Tuesday.

Analysts expect the heavyweight transportation company’s Q4 earnings to grow 33% from the same period last year.

And the company has a knack for “beating the Street”…

Delta has exceeded earnings estimates in five straight quarters.

And its stock averages a 7% gain in the one-week period following earnings, according to StreetInsider.

Bellwether rail transport company CSX Corp. (CSX) also reports earnings on Tuesday.

Wall Street eyes fourth-quarter growth of 106% for CSX.

And much like Delta, CSX often exceed expectations.

The company has either reported inline or beat the Street in each of the last eight quarters.

Industrial stocks are also cheap, trading at just 13.5 times expected earnings.

But if these bring the heat on earnings, shares won’t trade at bargain-bin prices for long.

These names should be at the top of your watchlist!

So, here’s the bottom line…

Forget about the shutdown…

Put politics out of your mind…

And position yourself to profit now ahead of what could easily be another excellent earnings season!

Stay tuned for more hard-hitting coverage of the season right here at The Daily Edge as the reports come in!

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