Weekly Market Assessment
Tell me if you have heard this one before... "Increase in inflation rates seen materializing slower than expected." Last Thursday we heard from the ECB (European Central Bank) President Mario Draghi. He reiterated his concerns of inflation and how they are not meeting the Governing Council's mandate of price stability, or in layman's terms, a low inflation rate. We have heard this same tone from our Central Banks President Janet Yellen. We (The U.S. and Europe) can not get inflation near the 2% mark, even though we have been pumping the system with low rates and currency devaluations. Are we really fighting deflation in an environment where historical accommodative monetary policies are being implemented to try and stimulate economies back to health. How can this be and how long will it last. Some say QE4 (Quantitative Easing) and some say QE Forever! Recent market events, have changed some analyst thoughts and predictions from the September rate hike to now occurring in December. Lets see where we are in 3 months and if they have changed their minds again.
We got the jobs report last Friday, forecasters where expecting an increase 223,000 jobs, however the number fell short to 173,000 new jobs. On a positive note the unemployment rate fell to its lowest level not seen since 2007, to 5.1%. The miss on the employment report should further give the Federal Reserve reason to not increase interest rates this year. Accompany this with the above mentioned comments from the ECB President about willing to further increase their bond buying program and it becomes even more difficult for the U.S. to be the one to raise interest rates. So how did the market react to this report, by selling off more that 250+ points. Not expected, however I think that in the short term investors will realize that the Fed has been backed into a corner with no choice but to continue to put off the idea of raising rates this September. This important Fed meeting is set for this Thursday and should make for an exciting time in the market as many believe they should raise however like the Fed states that they remain data dependent and so far this data has not proved to justify a hike in rates.
The Rant: Going Off on a Tangent with My 2 Cents:
Making the Watchlist: Below are the stocks that I will be looking at over the coming months. I will provide the the current stock price and why I am watching them. I will comment on them as I continue to keep an eye on them. You will be able to see and follow their growth and/or decline. Chart links may be attached.
GoPro (GPRO) $32.42- GPRO has lost more than 50% of its value in one month. It is approaching it's IPO price and this may start to bring in buyers that missed out on its initial run to $90 since it went public. I believe this a great momentum stock that could attract potential acquirers and with a recent upgrade from an investment firm with a price target of $80, I believe this is a great risk/reward play.
See What I'm Trading:
You can now view all my real-time trades by following this link, BlackPacific Capital1 and BPC2 This new site shows my trades, in real time the minute they are bought and sold. Below you can also click on the stock symbols, trade strategy or prices which will lead you to this new site. The site offers a full risk/return profile and video detailing the strategy of the trade. Note: When looking at the option positions every contract equals 100 shares.
From the Trading Floor to the Option Pit: A quick look at whats on the trading desk:
S&P 500 (SPX) -No Trades.
SeaDrill (SDRL)- I bought a SEPT $7 "CALL" on this most recent bounce in crude oil.
GoPro (GPRO)- I bought a SEPT $42 "CALL" , I am still holding this and also purchased a SEPT4 $36 "CALLS"
Mobileye (MBLY)- I bought a SEPT 47 "PUT"