US Fed day - Will US Fed give any conclusive hint about next rate hike?
The big question - How will dollar and Gold react? The believers in Gold are of the opinion - U.S. economic recovery is very fragile and US Fed will continue to be on hold for next 6 months. If US Fed does not give conclusive hint on next rate hike - Gold can make a big move. Here's the Gold ETF chart
The Headline that will dominate today - Apple first ever decline in iPhone sales
Apple just reported the first ever decline in iPhone sales from the same quarter a year earlier. That’s the first ever for iPhone. Apple sold 51.2 million iPhones. That' 10 million fewer iPhones than the tech giant sold during the same quarter a year ago. Stock tanked post market hours - wiping $40 bn of market cap.
Remember - last week - Market gave a very ugly reaction to Microsoft earnings.
Bears singing the recession tune
Argument: This will be the 4th quarter in a row of negative earnings growth for the S&P 500, and it clearly points to recession.
Is this the complete truth?: The fact is that Bears are overemphasizing the disproportionate impact of the Energy Sector on aggregate S&P 500 earnings and ignoring the broader recovery in US economy
A week from now - the commentary will be - SELL IN MAY AND GO AWAY
The media loves a good bearish narrative. Bearish commentators deliver a higher rating. But if we go by price action – the market is climbing the BIG WALL OF WORRY
The big question: What can drive the market higher? Can it be Financials. Here's the ETF of Financials XLF
Will US Fed give a firm signal on rate hike?
If yes – how will bank stocks react. Financials have shown remarkable strength in last few weeks. Traders will keep a close eye on four large banks - JP Morgan Chase, Bank of America, Citigroup and Wells Fargo.
There is lots of political noise around how big US banks are. Here's one fact:
The world's five biggest banks are all based in Asia...4 in China and 1 in Japan with assets of $14 trillion
— Deepak Singh (@smarket) April 26, 2016
Chalte Chalte: What is Long term investing?
Getting it right…
25 years ago, Warren Buffet's Berkshire Hathaway paid $290 million to buy 10% of Wells Fargo. The position is currently worth $23 billion and generates more than $700 million in dividends annually.
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Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers