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7 hours ago

US equities - Strong vs. Weak balance sheets

Companies with strong balance sheets have outperformed companies with weak balance sheet year-to-date, as companies with weak balance sheet typically invest less (source: Goldman Sachs) 

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US equities strong vs. weak balance sheets relative performance

14 hours ago

The roller-coaster ride of Big Hit Entertainment, the K-Pop South Korean stock

Since the trading on Big Hit Entertainment (352820.KS) began, the stock nearly doubled — from the IPO price of Won135,000 ($115) to Won270,000 ($236). From there they rose another 30% as the retail investors who had missed out on the lottery drove a trading frenzy. But by 9.15am, a downward march had begun. Big Hit shares are currently trading at about Won156,000. Big Hit’s up-down IPO aside, K-pop is a growing economic force. The combination of catchy tunes, synchronised dance routines, perfect skin and considerable social media savvy has brought in big money. The pandemic has also thrown up new opportunities. More than 7m fans tuned in to two online concerts held by the band this year after world tours were cancelled. However, even before a single Big Hit share changed hands, its IPO price already represented a valuation of nearly 60 times forward earnings. So maybe the sharp decline can be somewhat justified by a necessary valuation adjustment? - source: Source: FT 

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Big Hit Entertainment (352820 KS)

17 hours ago

U.S earnings season has been stronger than ever but share-price reactions to earnings haven't been as strong as beat rates

"The results so far this U.S earnings season have been stronger than ever. Through last Friday, 85% of the 271 companies that had reported Q3 results beat consensus bottom-line expectations. That's more than 25 percentage points above the average beat rate of ~60% seen over the last twenty years. The top-line beat rate for revenues has been almost as strong at 78%, while the percentage of companies raising guidance (17%) is higher than we've ever seen. Share-price reactions to earnings haven't been as strong as beat rates, but the numbers are still positive. So far this season, the average stock that has reported has gained 0.55% on its earnings reaction day (the first full day of trading after the earnings release). To get to that +0.55% full-day gain, the average stock has actually opened higher by 0.97% and then sold off by 0.44% from the open to the close of trading. So while we're seeing stocks gain in reaction to earnings, underneath the surface we've seen a stronger initial reaction to the news and then some intraday selling. Of the 271 stocks that have reported, 13 have gained more than 10% on their earnings reaction days. These 13 stocks are listed below. As a final note, when it comes to forward guidance, we're seeing the same extraordinary trend when it comes to what companies are saying about their future prospects". - source: Bespoke 

#Stocks
13 stocks have gained more than 10% on their earnings reaction days

1 day ago

The "Disruptors" bubble and 10 surreal U.S equity market numbers and facts

David Stockman asks some interesting questions: 1) “How could the S&P 500 be trading at its highest multiple in 70 years when the growth rate of corporate earnings has been sinking for more than two decades?”; 2) “The recent S&P index value implies a PE multiple of 36.8X—a place the S&P 500 has never been before.”; 3) “The forward PE is now above the record high reached during the dot-com madness at the” end of the 1990s; 4) Amazon, a company that didn’t exist pre-1994 is “43% of the S&P 500 consumer discretionary index.”; 5) “Nearly two-thirds of the market is underperforming so far this year.”; 6) “Year-to-date, only one in three stocks is actually in the green.”; 7) “One in five stocks is down 50% or more from its all-time high.”; 8) “The five largest stocks in the S&P 500 have a combined market cap that equals that of the ‘smallest’ 389 stocks.”; 9) “Apple, Amazon, Microsoft, and Google—four companies—have a combined market cap (over $6 trillion) that is greater than the GDP of every country in the world, minus the US and China.”; 10) “Tesla, having surpassed Walmart (with one-twentieth of the revenue!), has become the ninth-largest stock in the US.” - source: Sebastien Schaefer, BofA 

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History of asset bubbles

1 day ago

Clear break down on the QQQ (Nasdaq 100) ETF. Next support is $260, which is nearly 7% below current price

More volatility is expected this week with heaviest tech earnings week - source: HCPG

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QQQ chart

1 day ago

In nature only the fittest survive- in business its those with strongest balance sheets

A relative strength chart of stocks with weak vs strong balance sheets is downtrending- suggesting investor confidence in the economy is weak too.

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In nature only the fittest survive- in business its those with strongest balance sheets

1 day ago

The big flip to value not happening in China either... growth stocks % of market cap surging

The dominance of technology companies is creating a huge divergence with the rest of the stock market globally - not just in the United States.

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The big flip to 'value' not happening in China either... growth stocks % of market cap surging

1 day ago

SAP is down -20% intraday

SAP, the (ex) tech giant blames the pandemic, goes all in cloud (source: The Market Ear), Refinitiv.

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SAP chart

1 day ago

US vs. UK equities relative price performance since 1950

Source: The Market Ear 

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US vs. UK equities

1 day ago

Is the current U.S. stock market bubble even worse than the 2000 Dot-com mania?

Are Markets priced for "destruction"? According to Jesse Columbo, the stock market has rebounded since March but not based on fundamentals (including earnings, GDP growth, etc). It's based purely on "funny money" from central banks. Jesse Columbo adds that "it is not an investment thesis; that's a gambling thesis".

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Financial Markets metrics