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Friday, 23 June 2017

Laszlo Birinyi: S & P 500 at 2,500 points to September

Laszlo Birinyi, one of the most stable bulls in the eight-year rally of US indices raised its forecast for the broad US index S&P 500. According to him the index will rise to a level of 2 500 points to September.
73-year-old president of Birinyi Associates Inc. said his company would buy call index-based options to benefit from the potential increase, according to a letter sent to customers on Monday.
Early in the year, Birinyi predicted that the broad index would rise to 2 450 points by June. The index overtakes this level this week, rising to the highest value of 2 453 points.
The expert's opinion is largely counter to the expectations of the majority of Wall Street analysts that the rise in US indices is likely to stop.
According to Birinyi, however, strong demand for shares at times of sell-offs is a bullish sign.
Birinyi is expected to buy call options on the SPDR S&P 500 ETF with payment is in September and a $250 strike at a price of $2.29, says the letter to customers.
The forecast is in fact an expectation of a 5% growth for the index, compared to its average for the past 50 days.

Thursday, 22 June 2017

Doug Kass: We are ready for a serious correction

The big investor Doug Kass, expressed his opinion on the market, in a unique way.
"At the risk of sounding stupid (and mistaken), I do not like the market and its movement," said Kass in a statement.
A serious imbalance in closing markets last week, coupled with a forthcoming holiday and early month, triggered a late recovery of US indices and new records, Kass commented.
In case of serious instability of the FANG group companies, I position myself aggressively for a market correction - something that few investors and experts even think possible.
Last week, Kass raised serious questions about the letters "A" and "N" in the so-called FANG group. That is to the shares of Amazon and Netflix. The first reached new historical records at levels already above $1,000 at the beginning of the new week.
Surviving the previous technological boom and shortening technology companies during the "Internet bubble," in the late 1990s, Cass definitely believed he had "watched this movie before".
Analyzing the current situation causes Kass to believe that all investors, with the exception of "older fools," may be misled by the current trend of forming a "speculative bubble."
Kass believes that companies such as Facebook and Alphabet, given their prospects of good future growth, can not be considered expensive, although they would be limited to buying them at their current levels.
The expert predicts a 30% increase in profits before taxes and fees over the next few years. For Google, the forecast is for a 15% growth per year. What is more important, according to Kass, is that both companies generate stable cash inflows.
With regard to Amazon and Netflix, however, ratings are quite another. Kass said he would have avoided both companies.

Wednesday, 21 June 2017

Bernard Arnault: A bubble is formed that will burst

Bernard Arnault, the executive director of the multinational luxury goods company LVMH, has warned the world economy, which has to scare all investors seriously.
He thinks that the economic climate in the current situation is terrible in the medium term.  The billionaire made this statement in interview for the CNBC financial magazine on June 15th.
Arnault substantiates his opinion with high stock prices, low interest rates, and the volume of money that flows globally.
In his opinion, a bubble is being formed that will explode one day.
Arnault did not specify the time he expects the difficulties to happen, but said it could be soon because the last crisis was in 2008, and similar crises happen traditionally every 10 years.
In terms of his long-term horizon, however, the billionaire is optimistic, referring to advances in technology, which will ultimately help the world economy recover.

The oil officially entered the bearish market. Next target - $30

Oil has officially entered the bearish market after its fall yesterday. Poll Siana from Bank of America Merrill Lynch, commented in an interview with CNBC that based on graphics, oil may be headed for a level of $30 a barrel. These are levels unprecedented since April last year.
According to the technical analyst, the depreciation of oil can in practice serve as a rally for the bond markets. There is a backward movement between bond prices and oil, so if this dependence continues, the depreciation of oil can lead to a rise in bond prices.
In addition, stocks may also be in trouble if the price of oil falls. While there is no direct correlation between the potential oil depreciation and index levels, such a decrease could potentially exacerbate a possible correction for the indices.
Not very positive is the situation for oil and on the basis of a fundament. In fact, demand for oil may drop in the summer.
Since the beginning of the year, the price of oil has fallen by 19%, mainly due to increased US stocks and OPEC's inability to limit supply.
US crude oil traded at levels of 43.50 earlier this morning.

Tuesday, 20 June 2017

Gold is cheaper in a background of a rising dollar and record indices

New records for US indices did not particularly affect gold. Investors dropped the metal, demanding higher returns and a "high security" environment.
There is another fact about the calm of the market. The continuing decline in the volatility index of the Chicago stock exchange.
Otherwise, gold futures with delivery in August lost $9.8 in value, or 0.8% to $1,246.70. It was the seventh consecutive closure of a negative territory for gold, from the last nine sessions.
The Fed's policy of normalizing interest rates also had a negative impact on gold.
In addition, US indices reached new record highs yesterday and the US dollar appreciated.

Saturday, 17 June 2017

The Fed's comments sent the gold down

The Fed's comments, which directed investors to another interest rate hike by the end of this year, have seriously damaged the price of gold. Gold registered on Thursday its lowest closing since May 25.
The dollar appreciated against the rest of the major currencies, and with that, the price of gold diminished.
The noble metal lost at one point on Thursday over 1.5% of its value and traded at levels of $1,260 per ounce. Earlier on Friday, the metal continued its decline and traded at $1,252 per ounce.
Traditionally, metals are declining when the Fed resorts to a rise in interest rates. It was precisely such an action that took place on Wednesday, raising the short-term interest rates by 25 basis points to 1.25% on an annual basis.
According to some analysts, the Fed may raise interest rates at least twice more by the end of the year.

DB: Sell in the summer, the next 5% move is more likely to be downwards

Wondering what to trade in the summer? The largest German financial institution - Deutsche Bank has an idea. And it is - sell in the summer, because according to analysts of the bank, the next 5% movement for the US indices will be down.
The rise of the indices is so far justified, but from the bank believe it has reached its limits in the short term and the market may be tense in connection with potential dramatic decisions by Congress.
State legislators will most likely present significant changes to tax legislation that will lead to simplification of the system. Still, it is not clear when such changes will come into force. It is very likely that they will not materialize after August.
Deutsche Bank also said it was reducing its stock expectations. In line with their expectations for the direction of the S&P 500, from the bank practically reduce their tactical exposure to US stocks from 70 to 60%.