Changes in Apple's operating system iOS 14 had cut into Snap's Q3 advertising revenues. The miss on revenue has drove SNAP stock down over 26% last Friday. This news sparked sell offs in stocks that may have the same problem. These stocks include FB, GOOG, TWTR, PINS and AMZN. Sharp drop in INTC(-11.7%) due to mixed Q3 report and outlook and caused 13 analysts to downgrade its price target also dragged the Nasdaq Composite down. On top of the above negatives Fed Chairman said that inflation is much higher than target, and it is time to start tapering. Traders have bid up the odd of interest rates hike in June 2022 to 70%.
The weakness of technology stocks on Friday has led to increased risk in this week's tech earnings reports. This week's tech earnings reports are: Monday's FB; Tuesday's MSFT, GOOG, TWTR, AMD; Thursday's AAPL, AMZN. Other influential earnings reports this week are: Tuesday's UPS, GE, MMM; Wednesday's BA, GM, KO, MCD, TEVA, BMY; Thursday's MA, CAT; Friday's XOM, CVX.This week is the most important earning week and is crucial for the direction of the stock market. Watch out!
After the recent correction of about 6%, both the Dow and S&P 500 proceed to touch all time highs this past week only to come back down on Friday. While the Nasdaq Composite after retraced 7.5% from all time high recently and rallied back near all time high this week before pulling back sharply on Friday. Even though technically major market indexes are still in uptrends, the thing is how much upside they still have and whether they can break above all time high as the following potential problems loom. It is time to be cautious again.
1. Fed to start reducing bond buying in November.
2. Continue higher oil prices, supply chain disruption and higher labor cost driving up inflation.
3. IMF and other analysts have been lowering global GDP estimates.
4. Q3 tech earning risks are looming.
5. China Q3 GDP came in at 4.9% Vs 5.2% estimate. When the Chinese economy slow down, so will the global economy.
6. Covid-19 problem has not gone away yet as Bloomberg report on Saturday saying " U.K. cases are accelerating faster than in other western European nations, while deaths have jumped to their highest since March." Also ZeroHedge reported that ""China reported 26 new local confirmed Covid-19 infections on Saturday. And while the latest wave is still modest, for Beijing to take the surprising step of making a public announcement that it's about to get worse, suggests just that: that the "data "is about to show a major spike in local cases."
7. The S&P 500 has risen 21.19% so far this year, 31.49% for the last 1 year and 107% since March 2020 low. These are extreme high returns compare with average about 10.7% annual return for the last 30 years. In addition the steepness of the chart's rising angle is screaming for a big pull back.
8. Last but not least what I need to keep reminding is the stock market is facing extreme national debt (136% of GDP, historical high), high margin debt ($798,605 millions, historical high), and high stock valuations (213% of GDP, historical high).
With these problems facing the stock market and yet it is close to all time high as if there is nothing to worry about worry me a lot. I can think of a few reasons why the stock market keep on going up ignoring risks: Investors's fear of missing out (FOMO) mind set make them keep on buying. Another problem is it is not in brokerages advantage to recommend getting out of the market even though they see risks ahead. They always sugar coat the situation. Their analysts may suggest to sell a few stocks but at the same time they will recommend a few stocks to buy. Analysts keep on raising price targets for stocks because stock prices are way ahead of their original estimates and they need to catch up. The other problems are the fact that mutual funds have to buy stocks and they rarely sell. Their prospectus required them to be in stock at all time. They don't protect investors from risks. I still remember most 401K investments consist of mutual funds dropped 50% during bear markets. When retail investors keep pumping money into mutual funds, mutual funds would just keep buying disregarding market conditions. The above reasons are blowing a much larger stock market bubble. When liquidity dry up as the Fed starts to tighten and unexpected risk event hit the market, investors will pull back from stocks and a rush of mutual fund redemptions will hit the market hard. It is time to be cautious again. It is time to trade stock short term and not the the time to commit money to the market long term as there will likely be better opportunity to do that later.
苹果操作系统 iOS 14 的变化削减了 Snap 第三季度的广告收入。上周五，收入下滑导致 SNAP 股价下跌超过 26%。这一消息引发了可能存在同样问题的股票的抛售。这些股票包括 FB、GOOG、TWTR、PINS 和 AMZN。由于第三季度报告和前景喜忧参半而被13位分析师调低目标价，INTC 大幅下跌(-11.7%)也拖累了纳斯达克综合指数。除了上述负面因素外，美联储主席表示通胀远高于目标，现在是开始缩减的时候了。交易员将 2022 年 6 月加息的几率提高到 70%。
周五科技股的疲软导致本周科技收益报告中的风险增加。本周的科技收益报告是：周一的 FB；周二的 MSFT、GOOG、TWTR、AMD；周四的 AAPL，AMZN。本周其他有影响力的收益报告是：周二的 UPS、GE、MMM；周三的 BA、GM、KO、MCD、TEVA、BMY；周四的 MA，CAT；周五的 XOM，CVX。本周是财报最重要的一周，对股市走向至关重要。小心！
在最近约 6% 的回调之后，道琼斯指数和标准普尔 500 指数在过去一周均触及历史高点，但周五再回落。纳斯达克综合指数从最近的历史高点回落 7.5% 并在上周反弹至历史高点附近，然后在周五大幅回落。尽管技术上主要市场指数仍处于上升趋势中，关键在于随着以下潜在问题的存在，它们还有多少上升空间和它们能否突破历史高点。是时候再次谨慎了。
1. 美联储将于 11 月开始减少债券购买。
2. 油价持续走高、供应链中断和劳动力成本上升推高通胀。
3. 国际货币基金组织和其他分析师一直在下调全球 GDP 估计。
4. Q3 科技盈利风险迫在眉睫。
5. 中国第三季度 GDP 增长率为 4.9%，而预期为 5.2%。当中国经济放缓时，全球经济也会放缓。
6. Covid-19 问题尚未消失，因为彭博社周六报道称“英国病例的增长速度比其他西欧国家快，而死亡人数已跃升至 3 月以来的最高水平。” ZeroHedge 还报道说，“中国周六报告了 26 例新的本地确诊 Covid-19 感染。虽然最新一波疫情仍然温和，但北京采取令人惊讶的步骤，公开宣布情况将变得更糟，这表明：“数据”即将显示本地病例的大幅飙升。
7. 标普 500 指数今年迄今上涨 21.19%，过去 1 年上涨 31.49%，自 2020 年 3 月低位以来上涨 107%。这些都是极高的回报，而过去 30 年的平均年回报率只约为 10.7%。加上标普 500 指数图表上升角的陡峭程度正在呼喊大幅回调。
8. 最后但并非最不重要的是，我需要不断提醒的是，股市面临着极端的美国债务（是 GDP 的 136%，历史新高）、高融资债务（7986.05 亿美元，历史新高）和高股票估值（是 GDP 的 213%，历史新高）。
股市面临这些问题，但它却接近历史最高点，好像没有什么可忧虑的，这让我很担心。我可以想到股市继续上涨而忽略风险的几个原因： 投资者害怕错失机会 (FOMO) 的心态使他们继续买入。另一个问题是，即使他们看到了未来的风险，建议退出市场也不符合经纪商的利益。他们总是对坏情况进行糖衣包装。他们的分析师可能会建议卖出几只股票，但同时他们会推荐几只股票买入。分析师不断提高股票的价格目标，因为股价远远超出了他们最初的估计，他们需要赶上。另一个问题是共同基金必须购买股票而很少卖出。他们的招股说明书要求他们始终要买股。它们不能保护投资者免受风险。我仍然记得大多数投资于共同基金的401K 在熊市期间下跌 50% 。当散户投资者不断向共同基金注资时，共同基金就会不顾市场状况继续买入。上述原因正在吹出更大的股市泡沫。当美联储开始收紧银根及意外风险事件发生冲击市场时，投资者将从股票中撤出，共同基金赎回的热潮将对市场造成沉重打击。是时候再次谨慎了。现在是短期交易股票的时候，而不是长期向市场投入资金的时候，因为以后可能会有更好的机会这样做。
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