4/26/2020 Market Commentary – The Week Ahead

This upcoming week should prove interesting for traders & investors. There is a lot of data to be announced/reported, as well as earnings reports, notably from some of the biggest names in tech (Apple, Microsoft, Google, Amazon etc…)

Factor in the recent volatility in oil, the speculations coming out of North Korea & the fact that reported numbers now both from the government & individual companies are containing time periods that were impacted from the lock-down & stocks have a lot to work with from a pricing perspective.

Reading Into Stock Earnings This Week

Some of the most prominent names in the Technology Sector will be hosting their earnings calls this week. Looking at the chart, Apple, Microsoft & Amazon appear to be better off than Alphabet. I’m going to be looking at how the impact of Pay-Per-Click revenue & sales etc.. are impacting Alphabet.

Google AdWords provides extra “digital-billboard” space to many small businesses, but with the already increasing Cost-Per-Clicks, a lot of companies are likely to be removing this from their budgeting.

Given the current state of small-business and their consumers, this should be something taken into consideration when trying to assess the strength of small-business & the economy.

I’ll also be keeping an eye on international markets, as well as the Materials, IT & Consumer Staples sectors, as outside of healthcare those had the strongest average improvements in technicals over this past week.

Economic Reports & News For The Week

There’s going to be a lot of numbers being reported this week that will also help guide us as to where we are heading next:

  • Dallas Fed Manufacturing Index
  • Goods Trade Balance
  • Durable Goods Orders ex Defense
  • Consumer Confidence
  • GDP Annualized
  • FED Rates Decision
  • Initial Jobless Claims
  • ISM Manufacturing PMI & Index and more….

I’ll be looking to see how these numbers begin to reveal more of the Corona-virus stats being reported by companies. Markets may give up some excellent deals as folks try to recalculate their positioning & re-balance their holdings according to the data being published.

This will be even more interesting, as it is likely that the more negative the headlines coming out of North Korea are, the more uncertain the market will become, adding to the existing volatility.

Volatility should kick up within the next two weeks, as unless all news & numbers we receive are good, there’s too much muck & ambiguity out there that is/has been recently impacting stock prices.

I am still in my previously mentioned short index, long volatility positions, and will continue adding to my long PSEC & ADES positions, as well as looking closer at UG as it approaches the $12-12.50 range (published in today’s notes here: https://optimizedvalue.xyz/united-guardian-inc-ug-stock-analysis/

I’m still not convinced that stocks have recovered, and I think that the factors above present a lot of opportunity to shake out the prices of over-bought stocks.

This will provide a great hunting ground for building positions in some value & growth names I’ve been looking at recently.

US Equity Futures have opened lower, let’s see how the rest of the week plays out…

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