Hotline Sample Report
This report is a sample for information purposes only. These recommendations are closed.
8/27/2019 10:14:05 AM Eastern Time
Yesterday, calmness returned to the market, but it happened on a late August day on Wall Street, which means light volume and skewed outcomes.
Big news from the G-7 meeting came from a one-page communique that acknowledged the World Trade Organization (WTO) is antiquated and needs to be “modernized.” I take that as a de facto admission China has flouted the rules and the rest of the G-7 supports the United States.
This is better than trying to rally the troops: getting Europe to ignore the riches of China’s Belt and Road Initiative (BRI), which would be harder to come by if they took a more forceful stance.
So, the market rallied with all 30 stocks in the Dow closing higher, and all sectors other than Materials finished higher.
The market breadth was fine - new lows dwarfed new highs, underscoring the lingering carnage.
More on Durable Goods
Karina Hernandez: Research Analyst, Wall Street Strategies
With talks of a recession along the way, I crunched the numbers of the latest second quarter (Q2) Gross Domestic Product (GDP) report, understanding their numbers to a broader scale. Personal consumption expenditures remain strong at 4.3%. Private investment tumbled 5.5% due to challenges in global growth and tariffs.
I saw a trend in private investment from 2015-2016, where private investment fell into a "recession," possibly due to oil prices. However, the overall economy did not contract due to strong consumers. My thesis is that from what's yet to come will heavily depend on consumers.
See my in-depth segment, where I shared my letter to the Business Roundtable:
The United States of America-China Chamber of Commerce (USCCC) branch shows cracks in the notion American businesses can’t or won’t move supply chains. Moreover, only 30% say they are in China to make stuff to export to the United States. That’s great news and should be articulated, as the public demands more accountability.
If you have relocated or are considering relocating China-based manufacturing facilities to other
countries because of the tariffs, where have you located, or where are you relocating to (check all that apply)?
What specific outcome of any trade deal is the most important to your company?
What is your primary strategy in China?
As we took profits on two positions on Consumer Discretionary and Materials, we lowered our weight on materials and raised cash.
What the Heck?
During the last several weeks the market has seen brutal volatility that has left many investors shaken, although the market’s resolve seems to underscore most are hanging in there.
This morning equity futures have improbably been trending higher. The two biggest down sessions over the last four weeks were triggered by events that were supposed to spell doom.
This morning the market seems to be yawning instead of panicking which leads me to ask what the heck is going on.
The two- and ten-year yield have been inverted all morning.
The Yuan continues to get weaker against the US Dollar.
If the market can rally against the tide of events that just hit like atomic bombs, then you know there is a serious pent up demand to own US stocks.
Long Idea: DexCom, Inc. (DXCM) @ $176.16
BACKGROUND: DexCom, Inc., a medical device company, focuses on the design, development, and commercialization of continuous glucose monitoring (CGM) systems in the United States and internationally. The company offers its systems for ambulatory use by people with diabetes; and for use by healthcare providers. Its products include DexCom G6, a CGM system for diabetes management; DexCom G5 mobile CGM system to communicate directly to patient's mobile device; DexCom G4 PLATINUM system for continuous use by adults with diabetes; and DexCom Share, a remote monitoring system. DexCom, Inc. has a collaboration and license agreement with Verily Life Sciences LLC and Verily Ireland Limited to develop a series of next-generation CGM products. The company markets its products directly to endocrinologists, physicians, and diabetes educators. DexCom, Inc. was founded in 1999 and is headquartered in San Diego, California.
SKINNY: DXCM posted a strong second quarter, generating record new patient in all lines of business. Guidance remains strong and trending up. Our target is $210.
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