This website uses cookies to collect usage information in order to offer a better browsing experience. By browsing this site or by clicking on the "ACCEPT COOKIES" button you accept our Cookie Policy.

Chart Advisor: Pushing Higher

Investopedia

Contributor:
Investopedia
Visit: Investopedia

Friday, July 9th, 2021

1/ Stocks hit new highs, but small-caps lag 

2/ Morgan Stanley maintains upward momentum

3/ Schwab sliding before earnings  

4/ The bottom line

1/ Stocks Hit New High, But Small-Caps Lag 

In the wake of yesterday’s panic sell-off, investors eagerly took advantage of the opportunity to buy in, sending large-cap stocks to new highs. The majority of the ETF’s are looking to close at all-time highs for the week with the only lagging one being iShares’ Russell 2000 ETF (IWM). However, investors seem to be anticipating an explosive economic recovery in the near future. IWM has been most affected by the slew of uncertainty. Being comprised of small-cap companies makes it a better indicator on the overall state of the U.S. economy as opposed to a few narrow sectors. The tech sector has already made a parabolic move, and it’s hard to say how much further it will continue.

IWM seems to have more potential since it has not yet broken its all-time highs made in mid-March. Investors have been accumulating a position every time price made a correction back to the 50-day moving average, as seen by the dramatic increase in volume. Perhaps this means it is only a matter of time before it breaks out and catches up to the other ETFs.

ESG Investing & You—Our Latest SurveyHi readers! We are running a new investor survey about your sentiment around ESG investing. In case you don’t know, ESG stands for Environmental, Social, and Governance-related issues. We are trying to determine how important it is to our readers, and how much you already know about it. As always, we will keep your personal information private, and we will share the results with you. It’s a short, five-minute survey, and we thank you so much for taking it. Get Started >

2/ Morgan Stanley Maintains Upward Momentum

Morgan Stanley (MS) operates as a global financial services company. The company has given returns of 93.35% over the past year, outperforming State Street’s Financial ETF (XLF). Morgan Stanley has a weight of 3.27% in XLF, and generally moves in tandem with the ETF. 

Morgan Stanley is due to announce its earnings on Thursday, with an estimate of $1.66 per share and revenue of $13.98 billion. After the Federal Reserve released the results of banks’ stress tests, Morgan Stanley said that it will double its quarterly common stock dividend to 70 cents per share from 35 cents currently. Also, MS reported a new increased share repurchase authorization of up to $12B through next year. 

3/ Schwab Sliding Before Earnings  

Charles Schwab (SCHW) recently said it will take a $200 million charge in the second quarter related to a U.S. Securities and Exchange Commission probe of its robo-adviser platform. The compliance inquiry relates to past disclosures around the firm’s Schwab Intelligent Portfolios product.  

This ongoing issue casts a cloud over Schwab’s earnings announcement next week with an estimate of $0.75 per share and revenue of $4.45 billion. The share prices of SCHW are mildly correlated with State Street’s Select Financial ETF (XLF). SCHW has shown relative strength over the past year, giving a return of 104.83%. However, its price pattern has been trading weaker in recent weeks. It will be interesting to see the movement of the stock after the earnings release where it might find a hurdle at the former support price around $70. 

4/ The Bottom Line 

Major ETFs ended the week on a high, while small-caps lag as hopes for an economic recovery continue. Morgan Stanley is rising before earnings while Schwab appears to be weakening.  

Originally posted on 9th July, 2021

Disclosure: Investopedia

Investopedia.com: The comments, opinions and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy.  While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described on our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment or strategy. This information is intended for US residents only.

Disclosure: Interactive Brokers

Information posted on IBKR Traders’ Insight that is provided by third-parties and not by Interactive Brokers does NOT constitute a recommendation by Interactive Brokers that you should contract for the services of that third party. Third-party participants who contribute to IBKR Traders’ Insight are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from Investopedia and is being posted with permission from Investopedia. The views expressed in this material are solely those of the author and/or Investopedia and IBKR is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

In accordance with EU regulation: The statements in this document shall not be considered as an objective or independent explanation of the matters. Please note that this document (a) has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and (b) is not subject to any prohibition on dealing ahead of the dissemination or publication of investment research.

Disclosure: OTC Securities

An investment in an OTC security is speculative and involves a high degree of risk. Many OTC securities are relatively illiquid, or “thinly traded,” which tends to increase price volatility. Illiquid securities are often difficult for investors to buy or sell without dramatically affecting the quoted price. In some cases, the liquidation of a position in an OTC security may not be possible within a reasonable period of time.

trading top