Tag: bull market

Can Q2 earnings save the stock market from recession fears? | Responsible Investor Weekly Newsletter, June 24th, 2023

Responsible Investor is a weekly newsletter and an Apple/Spotify podcast for those who are interested in investing responsibly. Go to responsibleinvestor.dk for more information and to read our disclaimer. This week’s newsletter is titled “Can Q2 earnings save the stock market from recession fears?”, and was written on June 24th, 2023.

Weekly summary in a paragraph

The US stock market indices finished lower this week, with the S&P500 and the Nasdaq breaking a 5 and an 8-week positive streak, respectively. Recession fears drove the narrative as the yield inversion breached the psychological threshold of 100 basis points intra-session. The European stock market underperformed the US stock market, spooked by the surprise move of both the Bank of England and the Norway’s central bank who hiked interest rates by 0.5%. The 2-10y spread continues to widen and has now an inverted value of -97 basis points. In economic data, the US housing starts data published this week surpassed economists’ expectations as low existing home inventory continues to push buyers into the new home market. In corporate news, Accenture exceeded expectations while Darden Restaurants underwhelmed investors. Next week there are a handful of Q1 earnings left, including Carnival, General Mills, Micron and Nike.

Asset classes weekly performance

This week the Dow finished -1.98% lower (+1.8% year to date) while the S&P500 dropped -1.75% (+13.3% year to date), the Nasdaq lost -2.11% (+28.9% year to date) and the Russell 2000 tanked -3.6% (+3.4% year to date). Gold finished -0.89% lower (+1.9% year to date) while Silver gave up-3.35% (-8.7% year to date). Oil dropped -2.37% (-9.3% year to date). The 10-y US treasury yield was +0.27% higher (-1.4% year to date). The European stock market finished -4.9% lower (+14.7% year to date). The Euro lost -0.4% against the US Dollar (+1.8% year to date).

Weekly pitch

When the return of short-term bonds exceeds that of long-term bonds, economists talk about yield ‘inversion’. Over the years this phenomenon has been a precursor of recessions. After weeks of positive sentiment fuelled by AI frenzy, this week the markets have experienced a reality check and taken a step back. With the next Fed decision not due until late July, investors will now turn to Q2 earnings which will kick off week after next. Earnings and earnings forecasts have consistently been the most important driver of the stock market. Until the current Q2 earnings expectations are confirmed, responsible investors should exercise caution and maintain a healthy proportion of their portfolio in cash and hedges as well as a diversified portfolio with some exposure to the European stock market.

Weekly Portfolio Update

Here are this week’s movements: we took partial profits on our Gold ETF long position (+7.2%), as well as full profits on our Plug Power long position (+10.4%); a stop loss was triggered on our Tesla short position. We initiated long positions on a Thailand ETF, a Silver ETF, ACI Worldwide and Dish, as well as a short position on Thor. Cash, precious metals and hedges amount to 40.5% in our portfolio (reduced compared to last week).

Top 5 Weekly Portfolio Performers

ProShares UltraPro Short Russell2000 +8.7% (3x inverse the Russell 2000)

ProShare UltraPro Short Dow30+4.5% (3x inverse the Dow)

Meta +2.8% (Tech)

ProShares UltraPro Short QQQ +2.7% (3x inverse the Nasdaq)

Centene +1.0% (Managed Healthcare)

Portfolio Asset Allocation

US stocks long positions 49.5% (increased)

EU stocks long positions 10% (increased)

US stocks short position 2% (reduced)

Hedges 8.0% (unchanged)

Silver & Gold 2% (reduced)

Cash 28.5% (unchanged)

1-year Portfolio Performance

Our portfolio performance over the last 12 months is +10.7% (excl. dividends) vs the S&P500 gain of +14.6%.

Invest responsibly!!!

Is your portfolio protected from liquidity risk? | Responsible Investor Weekly Newsletter, June 17th, 2023

Responsible Investor is a weekly newsletter and an Apple/Spotify podcast for those who are interested in investing responsibly. Go to responsibleinvestor.dk for more information and to read our disclaimer. This week’s newsletter is titled “Is your portfolio protected from liquidity risk?”, and was written on June 17th, 2023.

Weekly summary in a paragraph

The US stock market indices finished higher this week, after the Fed opted for a widely expected ‘pause’ which was labelled as “hawkish”. The European stock market was also very strong, though the Euro weakened relative to the US Dollar as the ECB hiked the interest rate by another quarter percentage point. The 2-10y spread continues to widen and has now an inverted value of -93 basis points. In economic data, the May CPI report came in mostly in line. The stock market appeared to ignore the initial jobless claims report which came in weaker than expected. In corporate news, Lennar’s earnings exceeded expectations while Kroger underwhelmed investors. Next week there are a handful of Q1 earnings left, including Fedex, Kb Home and Darden, as well as Accenture’s Q2 earnings report.

Asset classes weekly performance

This week the Dow finished +1.3% higher (+3.5% year to date) while the S&P500 gained +2.6% (+14.9% year to date), the Nasdaq rose +3.3% (+30.8% year to date) and the Russell 2000 gained +0.5% (+6.5% year to date). Gold finished +0.6% higher (+4.1% year to date, we are long) while Silver gained +1.9% (-1.3% year to date). Oil rose +2.9% (-7.2% year to date). The 10-y US treasury yield was -1.8% lower (-0.6% year to date). The European stock market finished +4.1% higher (+20.7% year to date). The Euro lost -1.88% against the US Dollar (-2.3% year to date).

Weekly pitch

The Dow was the third major index to break-out this week, after the S&P500 and the Nasdaq. The macro picture does not support the strong move to the upside seen in recent weeks, however: in fact, the growing divergence between the indices and liquidity is concerning. AI and fear of missing out seems to be fuelling the bulls. When greed is at its peak, responsible investors should exercise caution and maintain a healthy proportion of their portfolio in cash and hedges as well as a diversified portfolio with some exposure to the European stock market.

Weekly Portfolio Update

Here are this week’s movements: we took partial profits on our Draftkings long position (+31.7%), as well as full profits on our Desktop Metal (+28.7%) and Freeport McMoRan (+10.0%) long positions; a stop loss was triggered on our Coinbase short position as well as on our XPO Logistics short position. We initiated a long position on Zimmet Biomet Holdings and short positions on Tesla, Lennar and UPS. Cash, precious metals and hedges amount to 42% in our portfolio (increased compared to last week).

Top 5 Weekly Portfolio Performers

Plug Power +15.3% (Electronic Tech)

Duerr +10.5% (Industrial Machinery)

Meta +6.1% (Tech)

BorgWarner +6.0% (Construction Machinery)

BUD +5.5% (Alcoholic Beverages)

Portfolio Asset Allocation

US stocks long positions 48.5% (reduced)

EU stocks long positions 9.5% (unchanged)

US stocks short position 3% (unchanged)

Hedges 8.0% (increased)

Silver & Gold 2.5% (unchanged)

Cash 28.5% (increased)

1-year Portfolio Performance

Our portfolio performance over the last 12 months is +15.6% (excl. dividends) vs the S&P500 gain of +20.2%.

Invest responsibly!!!

A new bull market is born…or is it? | Responsible Investor Weekly Newsletter, June 10th, 2023

Responsible Investor is a weekly newsletter and an Apple/Spotify podcast for those who are interested in investing responsibly. Go to responsibleinvestor.dk for more information and to read our disclaimer. This week’s newsletter is titled “A new bull market is born…or is it?”, and was written on June 10th, 2023.

Weekly summary in a paragraph

The US stock market indices finished higher this week, with the S&P500 breaking out and officially entering in a bull market by rising 20% off its October 2022 lows, and the VIX hitting pre-pandemic levels. The weakness in the European stock market was offset by the Euro strength relative to the US Dollar. The 2-10y spread continues to widen and has now an inverted value of -84 basis points. In economic data, the US jobless claims jumped to a two-year high. In corporate news, DocuSign earnings exceeded expectations while Nio missed. Notable moves to the upside were observed in Netflix, thanks to the new password crack-down policy, and in Tesla who announced a new gigafactory in Spain. Next week all eyes will be on the May CPI report which will be published on Tuesday and on Wednesday’s FOMC meeting.

Asset classes weekly performance

This week the Dow finished +0.34% higher (+2.2% year to date) while the S&P500 gained +0.4% (+12.0% year to date), the Nasdaq rose +0.14% (+26.7% year to date) and the Russell 2000 jumped +1.9% (+5.9% year to date). Gold finished +0.1% higher (+4.3% year to date, we are long) while Silver gained +3.2% (-0.83% year to date). Oil lost -2.5% (-8.6% year to date). The 10-y US treasury yield was +1.41% higher (-1.27% year to date). The European stock market finished -0.6% lower (+16.0% year to date). The Euro gained 0.37% against the US Dollar (+0.37% year to date).

Weekly pitch

The break-out in the Nasdaq last week was replicated by the S&P500 this week, though the latter is sitting on the 61.8% Fibonacci retracement: some say that a new bull market is born…but is it? The S&P500 is now at the same level as 10 months ago, though most of the uncertainties that existed at the time are still around: anemic earnings growth, full employment, lack of clarity in monetary policy, liquidity drying up and the yet-to-be-resolved Russia-Ukraine conflict. Nobody knows where the markets will go from here. Why did many US politicians take profits on their long stock positions last week? Will the Dow also experience a break-out? Until a broader market participation is confirmed, responsible investors should exercise caution and maintain a healthy proportion of their portfolio in cash and hedges as well as a diversified portfolio with some exposure to the European stock market.

Weekly Portfolio Update

Here are this week’s movements: we took profits on our Lithium ETF long position (+7.6%), our T-Mobile short-term trade (+4.9%) and our Take-two Interactive short position (+5.7%). We initiated a long position on ASE Technology Holding and short positions on Coinbase and H&R Block. Cash, precious metals and hedges amount to 41% in our portfolio (increased compared to last week).

Top 5 Weekly Portfolio Performers

The Gap +10.5% (Retail)

Desktop Metal +8.9% (Electronic Tech)

Orsted +7.5% (Renewable Energy)

Yelp +5.0% (Tech)

Plug Power +4.6% (Electronic Tech)

Portfolio Asset Allocation

US stocks long positions 49.5% (reduced)

EU stocks long positions 9.5% (unchanged)

US stocks short position 3% (increased)

Hedges 7.5% (unchanged)

Silver & Gold 2.5% (unchanged)

Cash 28% (unchanged)

1-year Portfolio Performance

Our portfolio performance over the last 12 months is +11.0% (excl. dividends) vs the S&P500 gain of +7.0%, which corresponds to a +4.0% market beat.

Invest responsibly!!!

THE BATTLE BETWEEN THE BULLS AND THE BEARS: HERE IS WHAT TO DO | December 10th, 2022 | $LIT $SIG $TSM $NUE $HZNP $PLUG $TELL $DIS $THO $MP $KSS $GL $WMT $TGT $GILD $AIG $ORI $USB $CNC $SH $GLD $SLV $SON $NEM $HLT $NXPI $DEN $GPS $FIVE $JPM $CMG $MSFT

Weekly summary in a paragraph

Sure, everyone is expecting a slowdown in the rates hike next week, but the November headline and core PPI both hotter than expected may indicate that the Fed is not going to pivot any time soon. It was a horrible week on the global stock markets which finished markedly lower with the US indices declining for the first time after 3 weeks.

China was the exception as the reopening narrative gains strength and property support optimism sent Chinese stocks higher. The European stock market did a U-turn and contracted this week as cold weather exerts pressure on its frail energy sector.

Asset classes weekly performance

This week the Dow lost -2.8% (-7.04% YTD) while the S&P500 fell -3.4% (-17.45% YTD, we are 1x short), the Nasdaq retraced -4.0% (-29.17% YTD, we have a 3x inverse position) and the Russell 2000 tanked -5.0%% (-18.715% YTD, we are 1x short). $Gold finished marginally lower -0.1% (-2.63% YTD) and has been overtaken by silver which is the clear winner with its +1.2% gain (-1.39% YTD). $Oil tanked -10.9% and is now in negative territory for the first time this year (-4.99% YTD). The 20-y fell -0.7% this week (-26.33% YTD). The European stock finished -1.5% lower (-14.62% YTD). The Euro finished flat on the USD (-7.17% YTD).

Weekly pitch

While 2022 has clearly seen a bear market, from time to time the battle between the bulls and the bears does not have a clear winner. The bearish narrative is based on sticky inflation, uncertainty in terms of terminal rate, recession risk and the revision of earnings forecasts to the downside. Conversely, the bullish narrative centres around the Fed pivoting on interest rates, disinflation, sustained strength in the labour market and positivity around China’s potential reopening. One may consider not taking sides and using hedges + cash to reduce their exposure to the downside as we are doing in our portfolio.

Weekly Portfolio Update

Here are this week’s movements: we took partial profits on $WMT (+5.1%) and sold our short position on $ISF.L (-9.9%). We initiated short positions on $TSM and $SIG. Cash, precious metals, hedges and short stock positions amount to 43% in our portfolio (unchanged compared to last week).

Top 5 Weekly Portfolio Performers

$SQQQ +11.25% (3x inverse Nasdaq)

$VXX +6.40% (Volatility ETF)

$IWM +5.01% (short position on Russell 2000)

$SH +3.57% (1x inverse S&P500)

$SLV +1.27% (Silver ETF)

Portfolio Asset Allocation

– Long stock positions 57% (unchanged)

– Short stock position 2% (increased)

– Hedges 7%, though equal to 10% considering leveraged ETFs (reduced)

– Silver & Gold 4% (unchanged)

– Cash 30% (reduced)

YTD Portfolio Performance

Our currency-adjusted YTD portfolio performance is -6.6% (excl. dividends) vs the European market loss of -7.5% (+0.9% European market beat, expressed in €) and the S&P500 loss of -17.5% (+3.7% US market beat, expressed in $).

Invest responsibly!!!

Responsible Investor Portfolio Update, August 8th, 2020 | $TCEHY $NEM $BK $SYF $GILD $GRUB $SQQQ $SCO $PCG $LVMUY $LRLCY $PEUGF $ELC.MI

Welcome to the ever rising stock market era where nothing that used to matter really matters anymore. One could call it state capitalism.

Another week of growth across the board with the US markets leading the push towards ATHs. With the US presidential election now just 90 days away, chances are that more stimulus and more bubble blowing policies will be implemented. That’s all well and good in the short term, but will happen in the long term ? If momentum is dictating the current market direction, at some point valuations will matter, one would think.

In the meantime our portfolio was basically flat this week due to a couple stinkers, namely $TCEHY -which has been affected by Trump’s attack to Chinese stocks- and Italian Contractor WeBuild which has now dropped below 1.1€ and is very close to my line in the sand. On the positive side, $GRUB becomes our first position to pass the 30% mark, a capital appreciation threshold I use to determine when to have take profit (TP) ready: more on this in future weekly updates.

We have sold our position on $IMA.MI on Monday with a nice +14% profit in just one week ! No other changes to the portfolio this week but there are many stocks on my watchlist, such as $CSPG, $SMSFT and $AMAT.

From this week onwards you will see all the stop loss (SL) prices which have been defined so far. A general rule I follow is to consider a 7 to 10% loss to determine the SL price depending on whether it is a divided stock or not and on the general market performance. The SL price increases if the investment relates to a leveraged ETF. And with every rule, there are always exceptions of course !

The table below summarises the portfolio performance since inception.

2000807 RIP

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The much talked about #earnings of #Google and #Facebook in two great infographics | #ActiveInvesting