Your Weekly Roadmap with Jay Woods, CMT
1/ Can the Records Continue?
2/ Deluge of Earnings
3/ Beige Book
Investopedia is partnering with CMT Association on this newsletter. The contents of this newsletter are for informational and educational purposes only, however, and do not constitute investing advice. The guest authors, which may sell research to investors, and may trade or hold positions in securities mentioned herein do not represent the views of CMT Association or Investopedia. Please consult a financial advisor for investment recommendations and services.
1/
Can the Records Continue?
Slow and steady wins the race. It may not be exciting, but this tortoise-like climb higher continues as we hit new highs yet again last week.
This was the sixth straight weekly gain, the longest such streak this year. It’s also the longest streak since a nine week winning streak in the fourth quarter last year.
2/
Deluge of Earnings
Earnings, earnings and more earnings. The financials got the party started over the last week and now the array of sectors reporting will broaden out. Here are some off the radar stocks and sectors to watch that don’t always get the attention they deserve.
Defense Stocks… This sector has multiple companies reporting earnings this week and has been an election year focal point. The iShares U.S. Aerospace & Defense ETF (ITA) (below) has been in quite the uptrend all year
The best surprise within the group has been GE Aerospace (GE). Shares are up 89% ytd and continue to shine since spinning out on its own. Other big names reporting are Lockheed Martin (LMT), Raytheon Technologies (RTX) and General Dynamics (GD). They are up 38%, 39% and 19% respectively.
Then there’s Boeing (BA). They have had problem after problem. Two weeks ago they announced a massive round of layoffs and took a major charge as they began restructuring their operation to avoid being downgraded to junk status. This weekend some positive news. A tentative deal to end a workers strike involving 33,000 union members was reached.
Now they are scheduled to report official earnings on Wednesday. Maybe the worst is finally behind them? Their -41% year-to-date decline has been hampering both the ITA and the Dow Jones Industrial Average. Watch price action carefully as it looks to climb out of the abyss.
Telecom… If you are as old as I am then you remember the high flying days of the great telecom stocks in the late 90’s. If you’re not then you just look at them as boring stocks that rarely move and pay a nice dividend. That’s fair, but if you haven’t noticed, they are making a slow and steady comeback.
This week Verizon (VZ), AT&T (T) and T-Mobile (TMUS) all report earnings as the growth metrics have been coming back. Watch to see user growth and demand for the new iPhone 16 to be in focus.
TMUS has been the big winner of the bunch. Shares are trading at all-time highs as the acquisition of Sprint has proved to be an asset and not a hindrance. They lead the group with a gain of 39% ytd.
Also reporting are the two heavyweights in the group. VZ, still a member of the Dow 30, has seen shares climb 17% ytd and has broken out of a major consolidation zone over that time. Meanwhile shares of T, are quietly up 30% and on the same upward trajectory. Both stocks have a long way to go to get back to their glory days, but have been solid performers under the radar in 2024.
The Exchanges… Clearly as an NYSE veteran of 30+ years, this sector is near and dear to my heart. The NYSE parent, Intercontinental Exchange (ICE), doesn’t report until Halloween but two of its lesser counterparts (my biased opinion😁) do report this week.
Shares of Nasdaq (NDAQ) are up 29% this year and trading at 52-week highs. Shares had stalled earlier in the year due to the completion of their acquisition of Adenza, but with that behind them and record volumes continuing, expect some good news from the exchange in Times Square.
CME Group (CME) continues to lag its equity based peers as it is only up 8.4% year-to-date. However shares are now trading at a 52-week high. They have broken out from a technical perspective, and have room to run. Watch the Chicago based exchange to see if it can catch up to its New York based peers.
3/
Beige Book
v. The Beige Book rarely makes headlines nor moves markets. However, given how each and every economic data point is over examined as we judge what the Fed may do next when it comes to rates, this has become more of a focal point than ever.
The information gathered is taken from each of the 12 districts represented by the Fed. It reviews local business conditions and takes into account regional conditions and their impact on the national economy.
Those looking for potential cracks in the economy may find them here when looking at the impact of storms in the southeast and potential seasonal headwinds from region to region. It’s a stretch but the bears out there are looking for any data to make their case and they may find some here.
Earnings. There will be no shortage of earnings headlines as we start the heart of the season. Thanks to Earnings Whispers for my favorite cheat sheet below.
—
Originally posted 21st October 2024
Disclosure: Investopedia
Investopedia.com: The comments, opinions and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described on our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment or strategy. This information is intended for US residents only.
Disclosure: Interactive Brokers
Information posted on IBKR Campus that is provided by third-parties does NOT constitute a recommendation that you should contract for the services of that third party. Third-party participants who contribute to IBKR Campus are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.
This material is from Investopedia and is being posted with its permission. The views expressed in this material are solely those of the author and/or Investopedia and Interactive Brokers is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to buy or sell any security. It should not be construed as research or investment advice or a recommendation to buy, sell or hold any security or commodity. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
Disclosure: ETFs
Any discussion or mention of an ETF is not to be construed as recommendation, promotion or solicitation. All investors should review and consider associated investment risks, charges and expenses of the investment company or fund prior to investing. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
