Stocks Close Higher Last Week; Huge Earnings Week For Technology; Where The High Paying Jobs In The U.S Are, And Likely To Be Through The End Of This Decade & Beyond; Stay Away From Gold
First, kudos to the Chicago Cubs and the Cleveland Indians on advancing to the World Series. Here’s hoping for a seven game series that goes down to the wire.
Stocks had a seesaw week, last week, moving up, then down, the up, to finish the week higher; but, less than a percent. Vito Racanelli writes in this weekend’s Barron’s, that “large-cap stocks under-performed, pressured by the rising U.S. dollar.” Volume was light, but this week the market — especially the NASDAQ — should see plenty of action as third quarter earnings kick into high gear, as we hear from the technology and bio-pharma sectors. Tuesday we will hear from Apple, and GM; Wednesday we’ll get a read from Biogen, Boeing, and Coca Cola; Thursday, Ford, Alphabet (Google), Amazon, and Twitter report; and, we close out the trading week on Friday with earnings reports from Abbive, Chevron, and MasterCard– among a host of companies — as one-third of the S&P 500 will report third quarter earnings and fourth quarter guidance this week/
Last week, the Euro hit $1.09, a seven month low, after the European Central Bank (ECB) left its accommodative monetary stance unchanged Thursday; but, hinted that they may provide more quantitative easing in December, Mr. Racanelli noted.
Microsoft (MSFT) was a big winner last week, and closed at an all-time record high on Friday, up $2.41, or +4.2 percent to $59.66. The company’s 3rd quarter earnings beat on both the top and bottom lines; and, is sitting pretty as the company is beginning to hit its stride in the highly competitive cloud space domain. Despite its record close Friday, most traders, analysts, and institutions remain bullish on the company’s outlook and stock price into year’s end, and into 2017. Shares of PayPal also hit a record high, with shares climbing $4.06 on Friday, or +10 percent, to $44.15. The company beat on the top and bottom lines; but the big news was the announcement that the company had inked a deal with Alibaba (BABA) — the ‘Amazon’ of China, which will make PayPal a one-click payment option for China’s e-commerce consumers.
Time Warner stock closed up $6.49, or +7.8 percent, to $89.48 — its highest close since July 2015 — after the Wall Street Journal reported on Friday, that AT&T was in advanced discussions to acquire Time Warner. Shares of AT&T closed down Friday, down $1.16, or -3 percent, to $37.49.
“The market seems tired,” said Keith Moore, an [equity] strategist at FBN Securities, adding that traders and investors are treading water till we get clarity on the presidential elections and, the make-up of both the House of Representatives, and the Senate. Adam Sarhan, CEO of Sarhan Capital, told Barron’s “the sideways action is also a consequence of investors waiting for clarity on other issues, such as the vigor of the [third] quarters earnings, and the Federal Reserve’s expected rate hike in December. There’s cash on the sidelines that could come in and send stocks higher,” Mr. Sarhan told Barron’s; but, he added, “the market lacks a bullish catalyst.” Perhaps, but a beat on the top and bottom lines this week by big technology such as Amazon, Apple, Alphabet/(Google), etc. would most certainly send the NASDAQ higher; but, the opposite of that is also true, and disappointing earnings and guidance by these same companies would most likely send stocks sharply lower. If it is mixed, then we’re probably not going to do much till after the presidential election.
For the week last week, the DOW eked out a minimal gain of 7 points, to 18,145 points; while the S&P 500 basically ended flat — up 8 points, or +0.4 percent, to 2,141 points; and, the NASDAQ rose +0.8 percent, 5,247 points. For the year, the DOW is +4.14 percent; while the S&P 500 is +4.76 percent; and, the NASDAQ is +4.99 percent.
Where The High Paying Jobs Are & Will Be Through The End Of The Decade & Beyond
Dan Roth, Executive Editor for LinkedIn, was interviewed on CNBC, and was asked where the best high-paying jobs in the U.S. are; and, likely to continue to see growth through the end of this decade. Mr. Roth listed the following 5 job categories: (1) Cloud and Distributed Computing; (2) Data Mining and Statistical Analysis; (3) Mobile Device Development and Apps; (4) Information Management and Data Storage; and, (5) User interface design for mobile and the Internet of Things (IoT).
This list certainly makes sense; but, based on all the reading I do, I would add the following: Miniature and Micro Robotics, and UAV/Autonomous System Development; Cyber Security for the Internet of Things and Critical Infrastructure Protection; Quantum Computing; Encryption; Artificial Intelligence and Virtual Reality across all domains;Big Data Mining and Deep Learning across all domains — especially in the Bio-pharma sector; space asset protection, and advancement,and green energy. These are the categories I would add to the list of 5 by Mr. Roth.
Stay Away From Gold
Ryan Dezember had an article in this weekend’s Barron’s arguing that a likely rate hike by the Federal Reserve in December, is likely to “dull golds luster.” Mr. Dezember writes that gold “rose 29 percent over the first seven months of 2016, propelled by investors seeking a haven amid the uncertainty caused by the United Kingdom’s vote to leave the European Union (EU), and cuts in interest rates in Japan and Europe.”
However, he notes, “since early August, gold prices have skidded, as investors have become more confident that the U.S. Federal Reserve will raise rates before long,” with the smart money betting on a December 2016 hike. Gold has declined 6.7 percent since July. Of course,. if the Fed does not raise interest rates in December, gold will have a sharp melt-up — since so much money is betting on a December interest rate hike. If you are convinced that the Fed will raise rates in December, then shorting gold prices may be a play you want to consider. All for now. V/R, RCP