Good morning fellow Option Edgers. We have a short week this week. Remember that Stock trading is closed on Feb 15th. Futures are open until 1:00 PM EST. The U. S. is being hit with a Natural Gas price increasing Cold wave and it should start to break up next week. In the meantime, we have a lot of economic data coming out this week. It is to bad that the market does not look at economic data anymore and looks at the “Virus” and “Stimulus” to form a direction. In one respect, that makes it easy to determine the direction.
Virus
Vaccines are happening, cases are going down, WAY down. When will government official wise up and remove the restrictions? I know I am not alone, waiting to spend money to fly, cruise, visit businesses, go to concerts, and my favorite, dine in restaurants.
Stimulus
Handouts are going up, WAY up. I know that the handouts are here to help people through this time of government over reaction. I am expecting some huge problems when the government ends these handouts. (yeah like they are going to end).
This scenario seems to be pushing the S. & P. 500 and other market indexes to all new highs. However, FAANG-M Stocks are not which could be a red flag that needs to be heeded.
I continue to trim winners and hold a bit of cash to take advantage of the inevitable dip that will come. At that time people will buy again and keep the market humming. Things will change, but with all that has happened this past year, the BTFD did not.
Good Luck out there this week.
Global Spotlight
The end of voter registration for Palestinian elections. While it might seem a basic step, the Feb. 16 conclusion of this part of the electoral process stands out given the lack of Palestinian elections for 15 years given infighting between the two major parties, Fatah and Hamas.
Italy’s Parliament almost certainly confirms a new prime minister. The expected confirmation of former European Central Bank President Mario Draghi as the country’s new premier next week will end a period of political turbulence that began with former Prime Minister Giuseppe Conte’s resignation in January.
Regional elections in Catalonia. The restive Spanish region votes Feb. 14 in elections that will shape its relationship with Madrid — and the future of the Catalan independence movement — for the coming years.
The U.S. Mars 2020 mission arrives at the red planet. The Feb. 18 arrival will mark the third space mission to reach Mars this month after Chinese and the UAE missions that arrived last week.
Stratfor.com
Economic Calendar
Briefing.com has a good U.S. economic calendar for the week. Here are the main U.S. releases.
Briefing.com
Last Weeks Numbers
Review Last weeks numbers here.
Here is Jill Mislinski’s chart of the market week. Her approach combines several key variables in a simple readable format.
Earnings
Source I/B/E/S data from Refinitiv
Aggregate Estimates and Revisions
- 20Q4 earnings are expected to be 3.4% from 19Q4. Excluding the energy sector, the earnings growth estimate is 7.3%.
- Of the 372 companies in the S&P 500 that have reported earnings to date for 20Q4, 82.0% have reported earnings above analyst expectations. This compares to a long-term average of 65% and prior four quarter average of 76%.
- 20Q4 revenue is expected to be 1.3% from 19Q4. Excluding the energy sector, the growth estimate is 4.6%.
- During the week of February 15, 55 S&P 500 companies are expected to report quarterly earnings.
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