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Digest
Warning Signs Emerge as Unemployment Rate Edges Up
An unsettling trend has emerged as the unemployment rate crept up from 3.8% in September to 3.9% in October, marking a departure from April's low of 3.4%. Traditionally, a half-percentage point increase in the unemployment rate often signals an impending recession. While some versions of this rule, popularized by experts like Goldman Sachs and economist Claudia Sahm, rely on smoothed data that does not yet point to a recession, there are mixed signals to consider. Notably, the strong performance of payrolls and output contradicts the looming recession signal. However, caution is warranted. A significant portion of recent payroll growth stems from 'backfill' sectors, such as retail, leisure, hospitality, and education, attempting to address lingering pandemic-era job vacancies. Excluding these sectors, payrolls only increased by 21,900, or 54,900 when adjusted for the auto workers' strike. Additionally, while the average monthly payroll growth has held at 204,000 over the past three months, household surveys indicate a decline in employment by 13,000 per month. When household data is adjusted to match the payroll definition of employment, the gain amounts to just 103,000 per month, only half of the payroll pace.1
Recent Highlights in Earnings Reports
The Health Care Sector reported strong numbers with the most notable being:
Eli Lilly and Company LLY 0.00%↑ beating the expectations with 155% reporting $0.10 EPS.
The other one was Insulet Corporation PODD 0.00%↑ reporting $0.74 EPS beating the estimates with 83%.
Other notable earnings from the past week:
Telefex Incorporated TFX 0.00%↑ beat the estimations with 11.34% on Thursday, resulting in a 2-day rally, gaining 9.94%.
Generac Holdings GNRC 0.00%↑ reported $1.64 EPS on Wednesday, beating the estimates with only 5.85%, but rallied 24.50% upwards, closing out the week at $104.92
Latest Analyst Upgrades and Downgrades
HSBC downgraded ENPH 0.00%↑ from Buy to Hold
Oppenheimer: ENPH 0.00%↑ from Outperform to Perform
Piper Sandler: ENPH 0.00%↑ from Overweight to Neutral
B of A Securities: CVX 0.00%↑ from Neutral to Buy
Barclays: F 0.00%↑ from Equal-Weight to Overweight
Guggenheim: NRG 0.00%↑ from Neutral to Buy
Signals From Our Discord Bots
Long on Tesla on November 1st:
Long on Eli Lilly on November 1st:
Long on Bitcoin still in place from November 2nd:
Forecasts
🕵Discovering hidden treasures.🕵
1) Rectangle Formation On YELP 0.00%↑.
YELP 0.00%↑ Price approaching the upper bound of the consolidation rectangle formation after beating earnings with ~125%.
The formation has been forming over the span of more than 3-months, to be specific around 107 days.
Volume is gradually increasing over last few sessions.
If break of structure happens with a big volume surge, then it would be confirming the trend-continuation. And potential move would be as much as first initial leg.
On 27th October JP Morgan - Changed its grade on YELP.
From: Underweight
To: Neutral
Price breaking above the 2-month average.
Revenue has been gradually growing every quarter since 2020.
Quite a spike in the EPS compared to history.
Free-cash-flow growth looks healthy.
Big drop in P/E ratio after earnings beat make YELP 0.00%↑ look cheap.
2) Ascending Triangle Formation On META 0.00%↑.
META 0.00%↑ Price approaching the upper bound of the consolidation ascending triangle formation after beating earnings with ~20%.
The formation has been forming over the span of more than 3-months, to be specific around 95 days.
Volume not signigicantly increasing over last few sessions.
If break of structure happens with a big volume surge, then it would be confirming the trend-continuation. And potential move would may be as minimum 25% of first initial leg.
On 26th October Wells Fargo - Reconfirmed its grade on META 0.00%↑.
From: Overweight
To: Overweight
On 26th October RBC Capital - Reconfirmed its grade on META 0.00%↑.
From: Outperform
To: Outperform
META 0.00%↑ launched a very good product, the $500 virtual reality headset (compared to >$3000 AAPL 0.00%↑ one), which in my humble opinion is the future of communication.
Revenue continues stable growth in last quarter.
EPS spikes to highest numbers ever.
Free-cash-flow is very healthy.
After the earnings beat, META 0.00%↑ is back into cheap mode.
😎 Cheers! 😎
Disclaimer: Please note that the information provided in this article is for general informational purposes only and does not constitute financial, legal, or professional advice. The information provided should not be relied upon as a substitute for financial, legal, or professional advice. Before making any decision, it is important to consider all relevant information and consult with a professional who can provide personalized advice based on your specific circumstances. The author and publisher of this article cannot be held liable for any actions taken based on the information provided. This is not a recommendation to buy or sell any specific securities or financial instruments.
Source: Greg Ip from Real Time Economics by WSJ