It’s earnings season. And the consensus on Wall Street, Main Street and beyond is that this quarter could be a bloodbath for corporate earnings in almost every industry. Analysts expect overall earnings for the S&P 500 to decline 9.1% from the first quarter of 2015. The main reason is fairly simple: energy and financial companies are having their worst quarters in many years. We all know oil and natural gas prices hit historic lows in February; though they’ve rallied, it won’t be enough to help them this quarter. For financial services companies, the stock-market volatility early in the quarter hurt… Read More

It’s earnings season. And the consensus on Wall Street, Main Street and beyond is that this quarter could be a bloodbath for corporate earnings in almost every industry. Analysts expect overall earnings for the S&P 500 to decline 9.1% from the first quarter of 2015. The main reason is fairly simple: energy and financial companies are having their worst quarters in many years. We all know oil and natural gas prices hit historic lows in February; though they’ve rallied, it won’t be enough to help them this quarter. For financial services companies, the stock-market volatility early in the quarter hurt trading profits and reduced demand for brokerage and other investment-related services; at the same time some banks suffered from loan defaults from the energy sector. #-ad_banner-#There are a couple of pieces of good news regarding earnings: One, consumer discretionary, healthcare and telecom companies are expected to post positive earnings overall. If you’ve followed my advice to add to your positions in these areas in recent months, those holdings should partly protect your portfolio from earnings-related drops. Two, and most significant, the gloomy earnings season probably will create buying opportunities among quality stocks that get beaten up — either because their… Read More

If there’s one lesson that stands out among all those I’ve learned in my 20 years of trading, it’s that even the best research, resources and skills can’t guarantee success. When I was coming up as a pit trader, I was fortunate enough to work alongside and learn from some of the best traders that have ever played the market. Many generously revealed their favorite metrics and secret tips for finding market trends and picking the best stocks. #-ad_banner-#But the thing we never talked about was how often or how badly they lost on trades. Unbeknownst to me, this was… Read More

If there’s one lesson that stands out among all those I’ve learned in my 20 years of trading, it’s that even the best research, resources and skills can’t guarantee success. When I was coming up as a pit trader, I was fortunate enough to work alongside and learn from some of the best traders that have ever played the market. Many generously revealed their favorite metrics and secret tips for finding market trends and picking the best stocks. #-ad_banner-#But the thing we never talked about was how often or how badly they lost on trades. Unbeknownst to me, this was a critical part of the equation, and one that most market gurus never address. I remember feeling inadequate because, as hard as I tried, I still couldn’t pick winners 100% of the time. It wasn’t until I became an options market maker that I learned how to add real odds to my trading. As a market marker, I was required to trade hundreds of contracts on a daily basis. For every trade I took, I was trying desperately to time the market so I could gain a sliver of an advantage. One of my competitors, a trader named Brett, noticed… Read More

Ever get the feeling that you can’t get ahead, no matter how hard you try? That’s the case for many households across the country. In fact, a recent Pew Charitable Trusts research report crunched Bureau of Labor Statistics data, tracking expenditures and incomes of Americans for the last couple of decades. Per the report, median income is down over 10% from where it was just 10 years ago; meanwhile, household expenditures are up close to 15% over the same period.  #-ad_banner-#For the low-income households, it appears that the recession never really ended.  Discount retail leader Dollar General (NYSE: DG) highlighted… Read More

Ever get the feeling that you can’t get ahead, no matter how hard you try? That’s the case for many households across the country. In fact, a recent Pew Charitable Trusts research report crunched Bureau of Labor Statistics data, tracking expenditures and incomes of Americans for the last couple of decades. Per the report, median income is down over 10% from where it was just 10 years ago; meanwhile, household expenditures are up close to 15% over the same period.  #-ad_banner-#For the low-income households, it appears that the recession never really ended.  Discount retail leader Dollar General (NYSE: DG) highlighted that fact at its recent investor conference. The company also made a point to show that inflation is outpacing total wages as health care costs and rents continue to rise. But it’s not just about rising expenditures. The economy itself could be on shaky ground.  Duke’s Fuqua School Business surveyed some 1,600 CFOs this month, and found that their respondents believe there is a 31% chance the United States could enter a recession by the end of this year. If a recession does hit, low-income families will struggle even more, forcing them to turn to retailers that offer necessities for… Read More

This is a true story about how a ragtag group of Average Joes made millions trading futures contracts… And I promise if you stick with me, then there’s a very good chance you just might rethink everything you ever thought about what it takes to be a successful investor. #-ad_banner-#I actually came across this interesting story awhile back and it was said to have been inspired by the 1983 Eddie Murphy movie “Trading Places.” It all started with a simple bet between two partners: Could the average person with absolutely zero… Read More

This is a true story about how a ragtag group of Average Joes made millions trading futures contracts… And I promise if you stick with me, then there’s a very good chance you just might rethink everything you ever thought about what it takes to be a successful investor. #-ad_banner-#I actually came across this interesting story awhile back and it was said to have been inspired by the 1983 Eddie Murphy movie “Trading Places.” It all started with a simple bet between two partners: Could the average person with absolutely zero Wall Street experience be taught to successfully trade the markets? On the one hand you had Richard Dennis — a self-taught commodities trader who reportedly made his first million by the age of 25. He believed he could teach someone his trading system so that the student would be just as successful as the teacher. Then there was his partner, William Eckhardt, who thought differently. He believed people were born with an innate skill or intelligence that made them better investors than the average person. To settle the bet, Dennis and… Read More

Chipotle Mexican Grill (NYSE: CMG) was one of this decade’s hottest stocks — surging more than 700% from about $90 a share at the start of 2010 to a high above $750 in August of last year. Investors seemed as crazy about the stock as customers were about the casual Mexican chain’s burritos.  During that time, annual sales tripled and the number of stores across the country and the globe roughly doubled to about 2,000. But after several Chipotle locations were plagued with outbreaks of E. coli and other food-borne illnesses, customers and investors rushed for the exits. Read More

Chipotle Mexican Grill (NYSE: CMG) was one of this decade’s hottest stocks — surging more than 700% from about $90 a share at the start of 2010 to a high above $750 in August of last year. Investors seemed as crazy about the stock as customers were about the casual Mexican chain’s burritos.  During that time, annual sales tripled and the number of stores across the country and the globe roughly doubled to about 2,000. But after several Chipotle locations were plagued with outbreaks of E. coli and other food-borne illnesses, customers and investors rushed for the exits. For a company that bases its reputation on high-quality food offerings, or what Chipotle calls “food with integrity,” the negative media attention that followed was particularly damaging, and shares plummeted nearly 50% in five months. But in mid-January, as the stock dipped below $400 and its P/E ratio fell to a level not seen since 2010, bargain hunters stepped in. #-ad_banner-# Shares jumped 36% before another Norovirus outbreak in early March stopped them in their tracks. They now sit just 13% above their January lows. And no doubt some of you are wondering whether you’re getting a second… Read More

The major U.S. stock indices closed in the red last week, giving back much of the previous week’s gains. They were led lower by the small-cap Russell 2000, down 1.8%, and the Nasdaq 100, which lost 1.3%. #-ad_banner-# As I’ve stated in previous reports, these two indices are particularly important because they tend to lead the broader market both higher and lower. So last week’s poor performance is not a good sign for the market as we begin the second quarter,… Read More

The major U.S. stock indices closed in the red last week, giving back much of the previous week’s gains. They were led lower by the small-cap Russell 2000, down 1.8%, and the Nasdaq 100, which lost 1.3%. #-ad_banner-# As I’ve stated in previous reports, these two indices are particularly important because they tend to lead the broader market both higher and lower. So last week’s poor performance is not a good sign for the market as we begin the second quarter, especially considering both are in negative territory year to date. The only sectors to show gains last week were energy, up 2.2%, and health care, up 1.2%.   The financial sector was the poorest performer, losing 2.9%. The table below, which displays Asbury Research’s own ETF asset flows-based metric, shows that the biggest outflow of investor assets over the past one-week, one-month and three-month periods came from financials.  Further weakness in financials, which is what these asset flows point to, would indirectly suggest flat to lower U.S. interest rates later this quarter, which I will discuss… Read More

Maybe it’s some kind of kismet. Or maybe I just want it to be… I saw a Tesla Model S cruising down the highway in Milwaukee the day after Elon Musk revealed his brand new Model 3. It was pretty slick. Nice styling, cool feel. Not like the impression you get with a Prius… This was something that even electric car-naysayers could admire. #-ad_banner-#It’s this slick approach that puts Tesla in a very different category than previous EV or hybrid makers, and it’s also why Tesla has garnered an almost cult-like following. In the run-up to the big… Read More

Maybe it’s some kind of kismet. Or maybe I just want it to be… I saw a Tesla Model S cruising down the highway in Milwaukee the day after Elon Musk revealed his brand new Model 3. It was pretty slick. Nice styling, cool feel. Not like the impression you get with a Prius… This was something that even electric car-naysayers could admire. #-ad_banner-#It’s this slick approach that puts Tesla in a very different category than previous EV or hybrid makers, and it’s also why Tesla has garnered an almost cult-like following. In the run-up to the big reveal of Tesla Motors’ (Nasdaq: TSLA) new Model 3 electric vehicle, 115,000 people shelled out $1,000 to reserve one… before they ever saw what the car looked like. And by early Sunday, that figure jumped to 276,000. That’s $276 million in the bank. The reveal was just as impressive as these figures. The Model 3 is a similar shape to the Model S, and comes with a range of at least 215 miles per charge. That’s surprisingly practical for a lot of people, including me, who lives an hour away from work. It comes with an autopilot function standard,… Read More

The British newspaper The Economist recently released its updated ranking of threats to the global economy, and number one on the list isn’t what you might think. It’s not ISIS, Russia or even low energy prices. #-ad_banner-#It’s China. Specifically, the Global Forecasting Service at The Economist says that the likelihood of China experiencing a “hard landing” within the next five years is the top threat to the global economy. The culprits: deterioration in the manufacturing sector, sky-high debt levels, ongoing currency depreciation and ill-conceived interventions into the country’s stock market. The… Read More

The British newspaper The Economist recently released its updated ranking of threats to the global economy, and number one on the list isn’t what you might think. It’s not ISIS, Russia or even low energy prices. #-ad_banner-#It’s China. Specifically, the Global Forecasting Service at The Economist says that the likelihood of China experiencing a “hard landing” within the next five years is the top threat to the global economy. The culprits: deterioration in the manufacturing sector, sky-high debt levels, ongoing currency depreciation and ill-conceived interventions into the country’s stock market. The backdrop for this turmoil is the need for policymakers to guide China’s maturation from a largely manufacturing-based economy to a consumer and services-based economy. From the report:       This month we are raising our risk of China experiencing a hard landing at some point in the next five years to 40%, from one in three previously. There are many conceivable routes to such an outcome, varying from a house price crash to the state sector crowding out investment, but we are particularly concerned by the rapid build-up of debt in the economy. At more than 200% of GDP,… Read More

Shares of Tesla Motors (Nasdaq: TSLA) have been unstoppable since its February earnings release, when Elon Musk forecast the company would be profitable by the end of 2016 and used the opportunity to announce the launch of the company’s Model 3. Even missing its goal of delivering 16,000 vehicles for the quarter (the company came in 1,180 short) when it released 1st quarter 2016 earnings last week couldn’t stop the stock. Shares increased 3.4% on the day as the company affirmed its full-year delivery goal and analysts clung to estimates for $1.29 in per share earnings for the year. #-ad_banner-#But… Read More

Shares of Tesla Motors (Nasdaq: TSLA) have been unstoppable since its February earnings release, when Elon Musk forecast the company would be profitable by the end of 2016 and used the opportunity to announce the launch of the company’s Model 3. Even missing its goal of delivering 16,000 vehicles for the quarter (the company came in 1,180 short) when it released 1st quarter 2016 earnings last week couldn’t stop the stock. Shares increased 3.4% on the day as the company affirmed its full-year delivery goal and analysts clung to estimates for $1.29 in per share earnings for the year. #-ad_banner-#But blind exuberance for future sales may be hiding some major risks for the company. Worse yet, a competitor may be about to beat Tesla to the punch for mass market electric cars… and it’s trading at a 97% discount to the upstart company’s valuation.   Tesla “Books” $10 Billion In Sales On The Model 3 Investors and analysts have jumped back into Tesla, sending the shares 81% higher since the February low on the promise of profitability and the company’s move into the mass market. The company started taking orders for the $35,000 Model 3 this month, reporting 276,000… Read More