Tag: Stocks

The Dow Jones Industrial
Average, S&P 500 and Nasdaq Composite keep making new all-time highs.  So do you still believe in this Bull
Market???  If you do, well…you should because
we still are making higher highs vs. lower lows. But I want to give you some
food for thought to be careful.

Consumer discretionary to technology, cyclical stocks that typically associated with bull markets while in down turns or bear markets, consumer staples typically outperform.  However, both consumer discretionary and consumer staples sector are at all time highs…TOGETHER…HOW CAN THIS BE???

Consumer Discretionary Select Sector SPDR (ETF), XLY

Consumer Staples Select Sector SPDR (ETF) , XLP

With the US equity markets, consumer staples and consumer discretionary all all-time highs, something has to give because based on intermarket correlations, this doesn’t make any sense. This is when one has to dig a bit deeper.

 The consumer discretionary sector has consistently lagged the consumer staples sector ever since last year.

Source

For the bull market to continue to run, the discretionary sector must eventually outrun the staples or at some point we will see the equity markets start making lower highs, then lower lows.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

United Rentals, Inc., through its subsidiaries, operates as an equipment rental company that services construction and industrial companies, by renting out backhoes, forklifts, earthmoving equipment, and material handling equipment, scissor lifts, crossing plates, line testing equipment for underground work, electrical distribution equipment, etc.

Three months ago I wrote a post,

United Rentals…Another Great Economic Barometer

where I talked about, like Caterpillar, United Rentals is a great barometer of the economy.  United Rentals their earnings report, United Rentals said they were still on target with the 2019 targets, however, the charts suggested to short the stock at the daily supply at $140.

Price did fall from the zone, but never hit the suggested target price.  Yesterday, United Rentals announced their second quarter earnings reported profits above Wall Street expectations, but cut the top of their guidance range for the year. Because the supply level hasn’t been breached, the chart suggested to short price again, with a confirmation below the $128 level which served as support/resistance.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

CSX Corporation, together
with its subsidiaries, provides rail-based freight transportation services. The
company offers rail services, as well as transports intermodal containers and
trailers. It transports chemicals, automotive, agricultural and food products,
minerals, fertilizers, forest products, and metals and equipment; and coal,
coke, and iron ore to electricity-generating power plants, steel manufacturers,
and industrial plants

CSX is the third-largest
US rail operator operating in 23 states as well as the District of Columbia and
two Canadian provinces. Its network spans 21,000 miles.

CSX announced earnings before the opening bell today.  CSX posted earnings that didn’t meet expectations and slashed their full-year revenue forecast amid slowing.

The generally reliable railroad operator said earnings for the second quarter came in at $1.08 per share, up 7% from the like period last year but three cents shy of the Street consensus forecast, while revenues totaled $3.08 billion, missing analysts’ forecasts thanks in part to trade-related weakness in its intermodal business.

“Both global and U.S. economic conditions had been unusual this year, to say the least, and have impacted our volumes,” CSX CEO Jim Foote told investors on a conference call late Tuesday. “You see it every week in our reported carloads. The present economic backdrop is one of the most puzzling I have experienced in my career.”

Source

Because the Dow Transports have lagged the Dow Jones Industrial Avg. since September.

Source

And because CSX stock price has breached the major support / resistance line at $72.50, the chart suggests price will fall to the weekly demand at $55.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

Domino’s Pizza (DPZ) posted weaker-than-expected sales during the second quarter. Same-store sales grew at 3% vs expectations of 4.6% domestic.  Same-store sales internationally grew 2.4%, but also missed analyst expectations for 2.6% growth.  On the news the stock price was fell 9%.

This marks the second consecutive quarter where Domino’s disappointed Wall Street.  I decided to focus only on same store sales figures because of Domino’s long term strategy.  Domino’s is under attack by the food delivery companies that popped up in the last couple of years in which stay at home diners have a lot more options at their disposal.

Thus, Domino’s is aggressively adding store at the sacrifice of existing stores the clear risk of saturating its existing territories. More stores equates to being closer to the customer, which equates to faster delivery times.  The strategy is called “fortressing,” or adding locations right within the delivery territory of an existing restaurant.

Things might get worse before they get better, thus the chart suggests further downside to the weekly demand at $227.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

Retail stocks have been a tough trade in 2019. While the S&P 500 is up nearly 20% year-to-date, the SPDR S&P Retail ETF (NYSEARCA:XRT) is up just 3%, as retail stocks have been weighed by sluggish consumer spending in early 2019 and overarching trade conflicts.

But, Goldman Sachs thinks things are about to get a whole lot better for a whole lot of retail stocks.

One of their picks that I
disagree with is Williams-Sonoma, based on the where the housing market is
headed. Recently, sales of new and existing homes dropped below 6 million for the
first in two years.  And despite rates going
down, mortgage applications are flat. 
However, Goldman Sachs believes the following:

Tariff concerns have been a huge headache for Williams-Sonoma (NYSE:WSM), but Goldman thinks that the kitchenware and home furnishings retailer is ready to bounce back. Trade tensions are cooling, and with a truce on new tariffs between the two countries, it seems the worst of the trade war damage has already been inflicted. Going forward, the numbers here should get better, especially as buying conditions in the U.S. improve, too. This improvement should drive a nice rebound in WSM stock.

Source

I personally think Williams-Sonoma is setting up for a great short. However, this is the type of catalyst that will get price there sooner than later. Thus, the chart suggest to short price at the weekly demand at

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

I put WD-40 up there almost with water and air, meaning it’s something we take for granted, but can’t live without it. It has infinite uses, from cleaning cleaning tiles, to softening leather, to free struck legos, to getting rid of rust, is the real utility knife.  Just look at the more than 2000 uses of WD-40.

WD-40’s stock had its best day in more than six years Wednesday after it said customers stockpiled the product ahead of a price increase.

The chemical manufacturer reported third quarter-earnings late Tuesday that beat expectations. Sales rose 7% to $114 million for the quarter, which the company said was bolstered by especially strong North American sales as customers stocked up on their grease and cleaning products. The company’s shares were up 8.6% Wednesday.

WD-40 (WDFC) CEO Garry Ridge said in a release that its North American customers were “buying high volumes of product in advance of our planned price increases in the region.” WD-40 announced it was hiking prices a year ago. It hiked prices predominantly because of rising commodity prices, although steel and aluminum tariffs had raised its canning costs somewhat as well.

Ridge said on a call with analysts that the company doesn’t expect any additional price increases this year. He said that it has felt “some residual impact of tariffs,” but the price increase for its can are “somewhat coincident with the timing of tariffs.”

Source

Despite the bump up in price this week, the levels in play and to monitor are the $150 level on the downside and the $188 level on the upside.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.