Global shares fell slightly today before moving back to the green after Germany released September Business sentiment numbers. Analyst have stated after a slow start this year the EU’s largest economy should continue to grow albeit at a modest pace.
We’ve made it passed Fed tapering or lack there of, Larry Summers taking his name out of the race for Fed chairman. Now the government has given the U.S equity markets another reason to worry. We’ve seen the vix spike and markets start to sell off in the past 4 sessions due to the impending “government shutdown”. The far right (mostly the Tea Party) have made it clear that they will not budge unless Obamacare is defunded. Everyone from Warren Buffett, Karl Rove, John McCain, the Pentagon, Jamie Dimon have all warned against what a government shutdown would do to the economy. Until there is some transparency in regards to debt-ceiling we will see volatility in equity markets. While the Fed’s decision to not taper should somewhat hold the markets up to some extent.
Applied Material (AMAT) up 5.43% merging with Tokyo Electronics in an all stock deal.
Blackberry (BBRY) receiving an offer from private equity firm Fairfax Capital for $9.00 a share. We saw shares jump up to 9.20 before closing at $8.90. Analyst believe that the deal might no go through and was a way for Prim Watsa of Fairfax to negate losses stemming from earlier investments in the stock.
Apple (AAPL) shocked investors over the weekend by selling 9 million iphone 5s and 5c units. The stock was up to 490.64, 4.97%. Shares are trading slightly higher in the premarket.
Sarepta (SRPT) shares climbed 10.79% yesterday on the basis that competing drug dispersion is now out of the picture. Seems like there will be an easier path for there phase 3 drugs.
Chrysler files for IPO after the close last night looking to raise approximately $100m. Chrysler hasn’t been publicly traded since 1998.
Please check back this afternoon for the market wrap-up.
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After a slight pull back in the market investors have had the time to digest the Fed policy. The market looks to open flat to down this morning in early premarket trading. With the Fed continuing QE it seems the stock market has the ability to continue to run. Similar to the way we have been for the past few years. But there will be hiccups in the market, i.e debt ceiling issues in the next month. I encourage investors to enjoy the bull run but be cautious and take profits off the table when you have them. Use dips in the markets to get better pricing on stocks that I got out of your price range.
Rite-Aid (RAD) announced outstanding 2nd quarter results at $6.3 billion and $.03 per share act. vs. -.04 exp. The stock rose 23.45% on the earnings news in yesterday’s session.
Tesla motors (TSLA) jumped into the driverless car race with Google (GOOG) Deutche Bank has upgraded Tesla with a $200 price target sending shares higher. TSLA closed yesterday at 177.92 up 7.04%.
Isis Pharmaceuticals (ISIS) is set to release Phase 1 results for its multiple atrophy treatment. Shares jumped 14.06% yesterday on continued positive data coming out of the test for the drug known as ISIS-SMNRx.
Darden (DRI) has released Q1 results and missed on the top and bottom lines. The stock right now is down 4.2% in premarket trading.
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Yesterday left most analyst in shock after the Fed decided not to begin even a minimal taper. But as stated earlier the U.S economy has not reached the thresholds put in place for tapering to begin. The market reacted extremely well both the DOW and S&P reaching new all-time highs after the news. All three major indexes turned around intraday losses the DOW closing up 147.21 points, S&P up 20.76, and NASDAQ up 37.94 points. While the bond markets and U.S dollar were negatively hit. In early pre-market trading it looks as if the market will continue its gains currently all major indices are up marginally.
This morning Appaloosas David Tepper spoke and said “The Feds non-taper and forward guidance should give a clear message of what the Fed wants. They are not worried about inflation in the next few years and want growth first, growth second, and growth third. With the stabilization of Europe, the apparent pickup in China (note higher dry bulk index) and a U.S. economy still on reasonable footing, despite a slight slowdown in housing the Feds apparent heavy leaning to a growth policy should lead to a pretty favorable environment for the markets.” The bull market that we’ve seen in the past two years in other words should continue unabated.
At this point investors will watch economic data to give any clues as to when the Fed may begin tapering.
Things I’ll be watching today are commodities (Gold, Natural Gas and Oil). Stocks WFT, ADBE, AVNR, EXPE, NVDA.
Check back for market updates and remember the old adage “Don’t fight the Fed”.
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Today is the big day for the Federal Reserve. Most analyst and bankers expect that the Fed will announce its plans to reduce its bond purchases by $10-$20 billion. Yet according to the standards that were put in place by Ben Bernanke the economy is not at the level where they would decide to taper.
The U.S GDP is not above 3 percent. The unemployment rate has fallen to 7.3% but still hasn’t reached the 6.5% rate they are looking for. We have yet to get inflation close to 2.5% meaning we could still see deflation.
So why is the Fed set to begin tapering today. The answers simple, during the Fed’s $85 billion a month bond purchases the economy hasn’t done much aside from equity markets which have rallied. So looking at the Fed balance sheet at $3.7 trillion and the possibility of creating a bubble or inflation risk it only makes sense to begin the taper sooner rather than later.
The markets seems to be ready for the Fed to taper up slightly in premarket trading. The Dow is up 8 points, S&P up 1 point, Nasdaq up 8 points. The Fed is set to release information at 2pm today.
Apple is set to unveil the iOS 7 today which will be the operating system for the iPhone 5s and 5c. Shares of Apple (AAPL) are trading up 3 points in the pre- market at 458.50.
Tesla CEO Elon Musk says the company is working on an electric car that will drive itself inside the next three years. Shares of Tesla Motors (TSLA) are trading slightly higher in the pre-market at 167.19.
Check back this afternoon for a breakdown of the Fed minutes and how it’s going to affect your investments.
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WOW!!!! After opening up $0.04 at $ 0.09 WCRS ran to an outstanding $ 0.3758 up OVER 900% in today’s trading session. Some obvious profit taking took place for those who were in the stock during early trading. It eventually settled at $ 0.15 UP 233% to close the day. Stocklifers I hope you were able to take advantage of this recommendation. If you did I know you’re excited to see what our next one will be and if you didn’t I know you won’t miss out on our next one.
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