RUSSELL 2000
S&P500 upside is limited for now We have rallied a long way since the lows, markets are not linear and the price will have to digest the move.
What will likely drive the markets higher is earning, a contrarian but realistic outcome when you consider that wage growth is outperforming inflation by almost 3%.
This, of course, would likely lead to a price rally while earnings multiples are falling!
IMPORTANT LESSON: Chesapeake Energy (CHK) dropped 8%, what now? When investing in single stocks there is balance sheet risk, in this case, its the CoCo Bonds that worry me so CHK has to be part of a diversified portfolio.
FACEBOOK is the cheapest its been since inception target: $285From a top-down view of the economy, we are seeing an expansionary environment albeit at a slower pace. Using net income versus operating expenses Facebook is the cheapest its been since its inception back in 2012.
Near term headwinds are likely to prevail in tandem with the broader averages and a near term target of $144 is likely before we move higher into our $285 target to end the cycle.
WEEKEND REVIEW: WTI near-term down before trend resumes higherMarkets are a DISCOUNTING MECHANISM they will discount today what they expect at some point in the future and if that expectation does not materialize the price will correct lower. Over the past few months, OPEC has been quite open about production cuts which would be the perfect recipe to push markets higher.
Huge overproduction while demand remained consistent at 1.5% caused the price to crash, OPEN is now addressing this issue.