So far, this week; we had Apple’s (AAPL) earnings, Facebook’s (FB) earnings, an FOMC meeting and the healthcare vote in the House of Representatives. AAPL earnings were met with little fanfare. AAPL declined just 0.31% the day after its earnings release. FB declined 0.63% the day after its earnings. Then there was the FOMC basically telling us that they are still ready to raise rates but are concerned over recent weak economic data points. So they remain betwixt and between for the near term. The Standard & Poor’s 500 (SPX) eased 0.13% on the day of its announcement. For the week through Thursday’s close, the SPX is higher by 0.22%. All told, it feels like a week in August rather May in the midst of earnings season overlaying two big economic announcements (FOMC and Labor report today).
What is happening is that the only sellers showing up in the markets are the traders and short term renters. The investors and long-term holders are just sitting idly by. The latter can pick their spots and be patient. So, while traders sold off FB by nearly $4 after reporting results, the investors snapped up stock at a nice discount. Similarly, for AAPL, a $3 sell-off was taken advantage of.
All the above are indicative of bull market action.
As for today’s Labor report, non-farm payrolls are expected to expand by 190,000 for April after a disappointing rise of just 89,000 in March. My take is that the March number was a statistical one-off and that when the April report comes out today, the March numbers will be revised higher.
I used some weakness in Alibaba (BABA) to start a new position in the stock. I also continue to exit underperforming positions, especially in the biotech sector. There is a separation of traditional technology from biotech. The former is loved and the latter is not. Normally, both will trade together – higher or lower. Following Thursday’s strong results from Zillow (Z), I might add to our existing positions.
The big story this week will be on Saturday in Louisville at Churchill Downs for the running of the Kentucky Derby. My pick is McCraken, horse #15. As is usual, the Derby will be a scrum at the start and then turn into a race somewhere around the ¾ mile mark.
Disclosure: At the time of this commentary Scott Rothbort, his family and/or clients of LakeView AssetManagement, LLC was long AAPL, BABA, FB, SSO, SPXL, & Z — although positions can change at any time.
Scott Rothbort is the President & Founder of LakeView Asset Management, LLC, a registered investment advisor specializing in high net worth private wealth management. For more information on investing with LakeView Asset Management, LLC call us at 888-9LAKEVIEW or request more information by clicking on the contact button on the top right hand corner of the website. LakeView Management, LLC is a Nevada LLC, with its principal office located in Henderson, NV and branch office located in Millburn, NJ
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