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Pressure seems to be rallying despite positive impact of Netflix results




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Jason Alden / Bloomberg

Despite the stellar results of Netflix, the market looks likely to fall back on Wednesday after the massive early morning advance , and investors might also have their eyes on a slight increase in Treasury yields.

The big story today is probably Netflix profit, which we'll get right away. There are articles on Wednesday including the earnings season of Abbott Labs and US Bancorp are still in their infancy, yet nearly 90% of reporting companies have surpassed Wall Street analysts' expectations.

Still, the trend seems to be above all due to slightly higher Treasury yields and relative to that A stronger than expected decline in inflation in the UK could help to shore up the dollar , which would lead to some commodities market weakness. Crude oil appears to be one of the victims and falls off slightly in the early stages.

At the moment, it is unclear whether the rally on Tuesday was a "dead hop" or whether the market formed a basis. We come from an incredible day, so it would not be unusual to see some profit taking, especially from investors who bought the dip and may now disappear a bit from the table. The market could make some good ground early and we'll see what happens afterwards.

Unlike the big losses in February ̵

1; when things relaxed relatively quickly – this back-and-forth pattern, as we might see for a while, appears to be continuing with volatility. The Cboe Volatility Index was under 18 early Wednesday, having risen above 25 last week, but consider keeping a close eye on it for every step over 20.

Netflix Engineers A Reversal

In order to reverse a call in football, a coach must throw a red flag on the field. Well, Netflix has probably done its version of the flag through Tuesday and reversed the mishap of the previous quarter. The video streaming giant reported a subscriber increase of almost 7 million, exceeding management's forecast of 5 million and 5.15 million in the second quarter.

It definitely looked like a reversal of the last time out, as Netflix over-hyped and subdued on subscriber numbers and the stock was hit. This time, pre-IPO stocks rose 11% and could boost the Nasdaq. These were strong results.

Netlix earnings of 89 cents per share exceeded third-party consensus estimates of 68 cents, while $ 4 billion in revenue exceeded expectations. The FAANGs seem to have a positive start, as one company fails and only four.

IBM sales growth back in red

The news looked at IBM, where sales fell after the surge, not as bright from the previous quarter for the first time in years. Equities fell 4% immediately after the earnings report, after IBM reported total revenues of $ 18.76 billion, below third-party consensus expectations of $ 19.1 billion. However, earnings per share of $ 3.42 exceeded estimates by two cents. Perhaps more importantly, the company's share of strategic business revenue – including cloud computing and data analytics – fell to less than 50% in the third quarter, from $ 9.3 billion to $ 10.1 billion Second Quarter US Dollars

On the other hand, IBM's problems are not necessarily those of the entire industry, and may be positive for other companies in this area if they win shares in IBM. The demand for cloud computing will not diminish, just a possible shift from IBM to competitors. Adobe shares, another cloud-based company, jumped nearly 10% after the company had forecast 20% revenue growth over the previous year.

Out of the Woods? Not essential

Does the US big index recovery of 2% on Tuesday mean the effects of last week's sell-off are over? Probably not, for a variety of reasons, which we will discuss below. However, the biggest one-day gain since March seems to indicate that investors are focusing more on profits rather than geopolitical and interest rate issues, which helped to slow things down earlier this month.

It is probably too early sanguine. Relocations such as those on which the market takes place usually take three to five days. Although volatility remains lower than its peak, it remains elevated. Many investors still do not seem to be sure where to plant their flag as last week's shifting sands are still volatile. Tuesday could be one of those up-and-coming days helping to trade the market from here, but to think that "Ding Dong, the witch is dead" in terms of volatility and sharp market fluctuations would probably be a mistake. [Tuesday, September 29, 2006] The rally on Tuesday was led by information technology, healthcare and communications services, but each sector rose and markets ended near their highs. It is also noteworthy that neither crude oil nor bond yields really moved too much as the stock market rebounded. The 10-year benchmark return seems to remain neutral at 3.15% this week, and crude oil has dropped to the low $ 70 a barrel after jumping over $ 75 recently. Rallies in these two markets helped to slow down the stock last week.

So far mostly solid earnings, but still early

Until now, this young earnings season, reporting companies provide returns higher than historically valuation. However, we will only get about 20% of the profits from the S & P 500 over the weekend, so it's still a long way to go.

Investors finally seem to reward the big banks for their strong quarters. Morgan Stanley rose more than 5% on Tuesday after outperforming Wall Street estimates and delivering robust investment banking results. Goldman Sachs shares rose 3% after a similarly strong Q3 performance. Financials are still down for the year, well behind the broader market, but Tuesday may have helped to strengthen a good-looking industry image.

Healthcare came second after Info-Tech Tuesday, climbing nearly 3% in coattails of strong Q3 demonstrations by Johnson & Johnson and UnitedHealth Group. Biotech stocks outperformed total health care as a whole by well over 4%, but the biotech sector remains far from the highs of the previous month. Some analysts fear that new pressure from Washington on drug pricing may weigh on biotech stocks in the coming months, but at least on Tuesday it did not seem to stand in the way.

FIGURE 1: Healthier climate? Healthcare, which joined the infirmary last week with the rest of the stock market, has edged up the path on Tuesday with nearly 3% growth. This was only surpassed by info tech (violet line), which grew slightly more than 3% after the last two weeks. Data source: S & P Dow Jones indices. Chart source: The thinkorswim® platform from TD Ameritrade. For illustrative purposes only. Past performance does not guarantee future results. Data Source: S & P Dow Jones Indices. Chart source: The thinkorswim® platform from TD Ameritrade.

Breadcrumb Lane: If you want to be "technical", the S & P 500 has left a trail of key-values ​​behind it as it rushed through technical support last week. These levels could be like proverbial bread crumbs for investors to see if the market finds a way to continue climbing out of the valley. The S & P 500 has already prevailed, which could be called "Level One," or the 200-day moving average, which was 2767 by Tuesday. This average was an important support level for most of the year. The next stop could be the 100-day moving average of 2823, followed by another resistance point at 2872 – the value at which the market rallied at the end of January before the correction.

Far above is the all-time high from the end of September of just under 2941, recorded a few weeks ago. This is still a long climb and there is no guarantee that the market will not test the low of 2710 last week. Although the past is not necessarily a prelude, remember that stocks first rebounded from their lows in February before being retested, cutting a new low for the year (to date) in April. We are not necessarily from the forest, so we hope that the breadcrumbs do not go out. Looking for a job? Typically, job openings that reach an all-time high could be a happy token for stock market investors, but this is not necessarily the case this time. The Labor Market and Sales Survey in August (JOLTS) rose to 7.14 million, according to data released by the Labor Bureau on Tuesday. To get a sense of how that number has increased this year, keep in mind that there was never a month of 6 million by mid-2017. This labor demand is likely to underline the difficult business environment and may be talking to companies that are expanding their business.

All this is probably positive for the economy and the market. The one thing you might be worried about is that the number of unemployed per job continues to fall. Only four years ago, there were two unemployed for each job. In August, there was less than one, said the Ministry of Labor. Companies that struggle hard may need to pay the right employee or not find the right employee at all. Higher wages and a shrinking workforce base can sometimes turn into inflation or stifle companies' growth plans.

Risk Embrace: As the stock and treasury markets plummeted last week, investors also pulled billions of dollars out of corporate bonds, the Wall Street Journal noted. However, the newspaper noted that it was a discrepancy: investors sold more investment grade bonds than high yield bonds or junk bonds. This, the newspaper reported, could signal the lack of "systematic flight from risk". The Wall Street Journal noted year-round that investment grade bonds underperformed higher-risk bonds. BBB rated bonds – the lowest for investment grade bonds – account for half of the investment grade index, the highest in more than 15 years. For investors, this means a higher risk of downgrades in junk status and possible losses, according to the Wall Street Journal. Many very risky companies have taken out loans in booming credit markets. As interest rates continue to rise, investors may re-evaluate corporate bond positions to ensure that their portfolios remain balanced and are not too heavily weighted towards riskier assets, making it more difficult for the economy to repay its loans due to rising credit Guess.

TD Ameritrade® commentary for educational purposes only. Member SIPC.

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Despite the brilliant results of Netflix, it looks like the market could retreat on Wednesday after Tuesday's big push. Profit taking could be a factor, and investors could also focus their eyes on a slight increase in treasury yields.

The great story today is well Netflix Yield, which we will soon discuss. There are points on the Wednesday calendar, including the publication of the Fed minutes this afternoon and the earnings of Abbott Labs and US Bancorp. The earnings season is still in its infancy, but to date nearly 90% of reporting companies have exceeded Wall Street analysts' expectations. [19659003] Nevertheless, the bias seems to be mostly lower, mainly due to slightly higher Treasury yields and the dollar rising against the Euro and Pound. A stronger than expected decline in UK inflation, reported Wednesday, could help support the dollar, which could lead to some weakness in the commodity market. Crude seems to be one of the victims and falls slightly in the early stages.

At the moment it is unclear whether the rally on Tuesday was a "dead hop" or the market formed a basis. We come from an incredible day, so it would not be unusual to see some profit taking, especially from investors who bought the dip and may now disappear a bit from the table. The market could make some good ground early and we'll see what happens afterwards.

Unlike the big losses in February – when things relaxed relatively quickly – this back-and-forth pattern, as we might see for a while, appears to be continuing with volatility. The Cboe Volatility Index was under 18 on Wednesday morning, having risen above 25 last week, but should keep a close eye on it at every step over 20.

Netflix Engineers A Reversal

In order to reverse a call in football, a coach must throw a red flag on the field. Well, Netflix has probably done its version of the flag through Tuesday and reversed the mishap of the previous quarter. The video streaming giant reported a subscriber increase of almost 7 million, exceeding management's forecast of 5 million and 5.15 million in the second quarter.

It definitely looked like a reversal of the last time out, as Netflix over-hyped and subdued on subscriber numbers and the stock was hit. This time, pre-IPO stocks rose 11% and could boost the Nasdaq. These were strong results.

Netlix earnings of 89 cents per share exceeded third-party consensus estimates of 68 cents, while $ 4 billion in revenue exceeded expectations. The FAANGs seem to have a positive start, as one company fails and only four.

IBM sales growth back in red

The news looked at IBM, where sales fell after the surge, not as bright from the previous quarter for the first time in years. Equities fell 4% immediately after the earnings report, after IBM reported total revenues of $ 18.76 billion, below third-party consensus expectations of $ 19.1 billion. However, earnings per share of $ 3.42 exceeded estimates by two cents. Perhaps more importantly, the company's share of strategic business revenue – including cloud computing and data analytics – fell to less than 50% in the third quarter, from $ 9.3 billion to $ 10.1 billion Second Quarter US Dollars

On the other hand, IBM's problems are not necessarily those of the entire industry, and may be positive for other companies in this area if they win shares in IBM. The demand for cloud computing will not diminish, just a possible shift from IBM to competitors. Adobe shares, another cloud-based company, jumped nearly 10% after the company had forecast 20% revenue growth over the previous year.

Out of the Woods? Not essential

Does the US big index recovery of 2% on Tuesday mean the effects of last week's sell-off are over? Probably not, for a variety of reasons, which we will discuss below. However, the biggest one-day gain since March seems to indicate that investors are focusing more on profits rather than geopolitical and interest rate issues, which helped to slow things down earlier this month.

It is probably too early sanguine. Relocations such as those on which the market takes place usually take three to five days. Although volatility remains lower than its peak, it remains elevated. Many investors still do not seem to be sure where to plant their flag as last week's shifting sands are still volatile. Tuesday could be one of those up-and-coming days helping to trade the market from here, but to think that "Ding Dong, the witch is dead" in terms of volatility and sharp market fluctuations would probably be a mistake. [Tuesday, September 29, 2006] The rally on Tuesday was led by information technology, healthcare and communications services, but each sector rose and markets ended near their highs. It is also noteworthy that neither crude oil nor bond yields really moved too much as the stock market rebounded. The 10-year benchmark return seems to remain neutral at 3.15% this week, and crude oil has dropped to the low $ 70 a barrel after jumping over $ 75 recently. Rallies in these two markets helped to slow down the stock last week.

So far mostly solid earnings, but still early

Until now, this young earnings season, reporting companies provide returns higher than historically valuation. However, we will only get about 20% of the profits from the S & P 500 over the weekend, so it's still a long way to go.

Investors finally seem to reward the big banks for their strong quarters. Morgan Stanley rose more than 5% on Tuesday after outperforming Wall Street estimates and delivering robust investment banking results. Goldman Sachs shares rose 3% after a similarly strong Q3 performance. Financials are still down for the year, well behind the broader market, but Tuesday may have helped to strengthen a good-looking industry image.

Healthcare came second after Info-Tech Tuesday, climbing nearly 3% in coattails of strong Q3 demonstrations by Johnson & Johnson and UnitedHealth Group. Biotech stocks outperformed total health care as a whole by well over 4%, but the biotech sector remains far from the highs of the previous month. Some analysts are worried about the possibility of new pressure from Washington on drug pricing in the coming months, which could potentially hurt biotech stocks, but at least on Tuesday it did not seem to stand in the way.

FIGURE 1: Healthier climate? Healthcare, which joined the infirmary last week with the rest of the stock market, has edged up the path on Tuesday with nearly 3% growth. This was only surpassed by info tech (violet line), which grew slightly more than 3% after the last two weeks. Data source: S & P Dow Jones indices. Chart source: The thinkorswim® platform from TD Ameritrade. For illustrative purposes only. Past performance does not guarantee future results. Data Source: S & P Dow Jones Indices. Chart source: The thinkorswim® platform from TD Ameritrade.

Breadcrumb Lane: If you want to be "technical", the S & P 500 has left a trail of key-values ​​behind it as it rushed through technical support last week. These levels could be like proverbial bread crumbs for investors to see if the market finds a way to continue climbing out of the valley. The S & P 500 has already prevailed, which could be called "Level One," or the 200-day moving average, which was 2767 by Tuesday. This average was an important support level for most of the year. The next stop could be the 100-day moving average of 2823, followed by another resistance point at 2872 – the value at which the market rallied at the end of January before the correction.

Far above is the all-time high from the end of September of just under 2941, recorded a few weeks ago. This is still a long climb and there is no guarantee that the market will not test the low of 2710 last week. Although the past is not necessarily a prelude, remember that stocks first rebounded from their lows in February before being retested, cutting a new low for the year (to date) in April. We are not necessarily from the forest, so we hope that the breadcrumbs do not go out. Looking for a job? Typically, job openings that reach an all-time high could be a happy token for stock market investors, but this is not necessarily the case this time. The Labor Market and Sales Survey in August (JOLTS) rose to 7.14 million, according to data released by the Labor Bureau on Tuesday. To get a sense of how that number has increased this year, keep in mind that there was never a month of 6 million by mid-2017. This labor demand is likely to underline the difficult business environment and may be talking to companies that are expanding their business.

All this is probably positive for the economy and the market. The one thing you might be worried about is that the number of unemployed per job continues to fall. Only four years ago, there were two unemployed for each job. In August, there was less than one, said the Ministry of Labor. Companies that struggle hard may need to pay the right employee or not find the right employee at all. Higher wages and a shrinking workforce base can sometimes turn into inflation or stifle companies' growth plans.

Risk Embrace: As the stock and treasury markets plummeted last week, investors also pulled billions of dollars out of corporate bonds, the Wall Street Journal noted. However, the newspaper noted that it was a discrepancy: investors sold more investment grade bonds than high yield bonds or junk bonds. This, the newspaper reported, could signal the lack of "systematic flight from risk". The Wall Street Journal noted year-round that investment grade bonds underperformed higher-risk bonds. BBB rated bonds – the lowest for investment grade bonds – account for half of the investment grade index, the highest in more than 15 years. For investors, this means a higher risk of downgrades in junk status and possible losses, according to the Wall Street Journal. Many very risky companies have taken out loans in booming credit markets. As interest rates continue to rise, investors may re-evaluate corporate bond positions to ensure that their portfolios remain balanced and are not too heavily weighted towards riskier assets, making it more difficult for the economy to repay its loans due to rising credit Guess.

TD Ameritrade® commentary for educational purposes only. Member SIPC.


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