Tag: stocks

November 7th, 2022 | Does the recent election in Brazil offer an investment opportunity? | $EWZ $PBR $VALE $SQQQ $FCX $SLV $CPE $CBOE $SBSW $KO $AAPL $GOOG $META $MSFT $MP $NEM $CPE $ORSTED.CO

Weekly summary in a paragraph

A slew of positive economic data and a consistently hawkish Fed sent the US stock market lower this week. Despite indications that the next Fed’s interest rate hike may be contained to 0.5% after this week’s 0.75% increase, the jobs market is still too strong and inflation does not seem to slow down enough for the Fed to change its course such that the tightening monetary policy is limiting any upside potential at least in the short term.

On the other side of the pond, the European stock market staged the second week of gains.

Asset classes weekly performance

This week the Dow lost -1.4% (-11.9% YTD) while the S&P500 gave up -3.3% of gains (-20.9% YTD, we are 1x short), the Nasdaq tanked -5.6% (-33.9% YTD, we have a 3x inverse position) and the Russell 2000 lost -2.4% (-20.9% YTD, we are 1x short). $Gold gained +2.2% (-11.2% YTD) while silver skyrocketed +8.5% (-16.6% YTD). $Oil rose 4.9%. The 20-y recovered +5.7% this week (-35.3% YTD). The European stock market rose +1.3% (-28.3% YTD). The Euro finished flat against the USD (-13.3% YTD).

Weekly pitch

Following the marginal win of former president Lula, Brazil presents itself as more attractive economy to foreign investors. Additionally, rising oil prices are lifting the stock market since the Bovespa is heavily weighted on oil stocks such as $PBR which counts as 10% while the mining company $VALE reaches 15%. Former president Bolsonaro has not yet conceded though has signalled that he will collaborate in the transition. Brazil currently looks like an interesting investing opportunity unlike most of the emerging markets.

Weekly Portfolio Update

We initiated a position on the Brazilian stock market $EWZ which is already a profitable trade. We also went long on $USB, a regional US bank. We sold our positions on $PCTY and $FIS. Cash, precious metals and hedges were increased to 38% in our portfolio which beat the market by +2.2% this week.

Here are the top 5 performers of our portfolio this week:

$SQQQ +18.67% (3x inverse Nasdaq ETF)

$FCX +9.29% (Basic Materials-Metal Ores)

$SLV +8.57% (Silver ETF)

$EWZ +7.69% (Brazil Stock Market ETF)

$CPE +5.08% (Energy)

This is our asset allocation as things stand:

– Long stock positions 62% (increased)

– Hedges 9%, though equal to 14% considering leveraged ETFs (unchanged)

– Silver + Gold 3% (unchanged)

– Cash 26% (increased)

Our currency-adjusted YTD portfolio performance is -2.3% (excl. dividends) vs the European market loss of -15.0% (+12.7% market beat).

Invest responsibly!!!

October 29th, 2022 | Should you still be invested in Apple, Microsoft, Google and Amazon? | $GOOG $AMZN $MSFT $AAPL $META $GILD $TLT $GL $AIG $CHTR $ORSTED.CO $PINS $BWA $FIS $CMG $V $MBG.DE $CARLB.CO $EL.PA $DSV.CO $GMAB

Weekly summary in a paragraph

It was a tale of two stock markets in the US: while all the major indices continued to rally for the second week in a row, major tech companies reported poor earnings and most importantly week outlook which limited gains for the Nasdaq. Given the hotter than expected inflation data (core PCE came in at 0.5% vs 0.4% consensus) this recent optimism seems largely unjustified although we are heading towards a period of positive seasonality coupled with favourable technicals.

Asset classes weekly performance

This week the Dow gained +3.9% (-11.9% YTD) just like the S&P500 (-18.2% YTD, we are 1x short) and the Nasdaq limited its advance to +2.2% (-31.0% YTD, we have a 3x inverse position). The Russell 2000 skyrocketed +6.0% (-19.5% YTD, we are 1x short). $Gold lost 0.6% (-9.5% YTD) while silver finished flat -0.1% (-16.4% YTD). $Oil rose 3.4%. The 20-y recovered +5.7% this week (-34.2% YTD). The European stock market rose +4.9% (-26.5% YTD). The Euro recovered 1.0% against the USD (-10.9% YTD).

Weekly pitch

The four biggest tech companies in the US stock market all reported earnings this week. There are clear signs of weakness in all four although $AAPL appears more resilient. These are all companies full with an incredible pool of talented individuals though more short-term pain ahead is likely. We had exited our position in $AMZN and $AAPL at the beginning of August, just before they peaked. $META’s earnings were particularly concerning especially the reported losses from investments associated to the metaverse.

Weekly Portfolio Update

After the blowout earnings report $GILD rose sharply and finished with a 19% weekly gain: we have taken partial profit (+26.45%) on our long position. We have also taken partial profits on our short-term $TLT trade (+3.8%). Finally, we initiated long positions on $MP and $AJRD. Cash, precious metals and hedges were reduced to 37% in our portfolio which finished 1.64% higher this week.

Here are the top 5 performers of our portfolio this week:

$GILD +16.93% (Drug-Biotech)

$CHTR +11.45% (Telecom Services)

$BWA +9.55% (Auto/Truck-Original Equipment)

$ORSTED.CO +9.54 (Green Energy)

$FIS +9.08% (Financial)

This is our asset allocation as things stand:

– Long stock positions 63% (increased)

– Hedges 9%, though equal to 15% considering leveraged ETFs (unchanged)

– Silver + Gold 3% (unchanged)

– Cash 25% (decreased)

Our currency-adjusted YTD portfolio performance is -3.8% (excl. dividends) vs the European market loss of -15.6% (+11.8% market beat).

Invest responsibly!!!

October 22nd, 2022 | What do declining 2023 and 2024 earnings estimates mean for your portfolio? | $FCX $FTNT $SAND.ST $TGT $JPM

Weekly summary in a paragraph

The stock market staged a significant rally this week with most indices finishing 3% or more higher, in part fuelled by a rumour that the Fed is going to become less hawkish in December. Is it yet another bear rally? Only time will tell, though something seems to have changed now that the fed funds futures are reaching 5%. Earnings season is now in full swing and 165 S&P500 companies will report next week.

Asset classes weekly performance

This week the Dow gained +4.8% (-16.5% YTD) while the S&P500 did slightly worse +4.7% (-21.3% YTD, we are 1x short) and the Nasdaq outperformed both +5.2% (-32.2% YTD, we have a 3x inverse position). The Russell 2000 recovered +3.5% (-24.1% YTD, we are 1x short). $Gold gained 0.8% (-8.4% YTD) while silver skyrocketed +5.5% (-14.5% YTD). $Oil inched 0.5% higher. The 20-y fell by -5.5% this week (-34.7% YTD). The European stock market staged a +6.0% comeback (-30.3% YTD). The Euro recovered 1.4% against the USD (-13.8% YTD).

Weekly pitch

Stocks follow earnings and earnings expectations. Declining earnings put pressure on stock prices and so do higher interest rates. So far, the ongoing bear market has mainly been caused by higher interest rates but if earnings start rolling over, the downward slope may steepen. For 2024, analysts now expect 250$ in earnings for the S&P500 which corresponds to a 9.9% appreciation relative to the current price assuming a 16.5 multiple. Earnings estimates continue to decline as time goes by, though, which reduces opportunities for appealing returns.

Weekly Portfolio Update

We covered 1/3 of our short position in IWM with a 22% gain, thereby reducing the overall weight of hedges in our portfolio. We also initiated a trade on TLT as there is a potential short-term shift in sentiment. Cash, precious metals and hedges now amount to 40% in our portfolio which finished flat this week while the market fell.

Here are the top 5 performers of our portfolio this week:

$FCX +15.88% (Basic Materials-Metal Ores)

$FTNT +11.68% (Technology-Software-Security)

$JPM +9.93% (Banks-Money Center)

$TGT +9.27% (Consumer-Major Disc. Chains)

$SAND.ST +8.61% (Specialty Industrial Machinery)

This is our asset allocation as things stand:

– Long stock positions 60% (increased)

– Hedges 9%, though equal to 15% considering leveraged ETFs (decreased)

– Silver + Gold 3% (unchanged)

– Cash 28% (decreased)

Our currency-adjusted YTD portfolio performance is -2.3% (excl. dividends) vs the European market loss of -16.5% (+14.2% market beat).

Invest responsibly!!!

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