Update: October 19, 2015

| October 19, 2015

October 19, 2015

 

Portfolio Update

The US stock market has finally calmed down, and many stocks are on their way back up.  Over the last month, the S&P 500 is up 4%.  For the year, stocks are back to being positive overall.  That’s certainly a relief to investors, who hope 2015 finishes with a bang.

With the retail seasons rapidly approaching, we do have some historic support for a 4th quarter rally.  While it’s not going to be a blowout year for equities, 3%-5% gains for the year in stocks is not out of the question.

One positive for stocks is it appears the Fed is going to wait until 2016 to raise rates.  The market expects a rate hike in the March/April time frame, which is still a good six months away.  A lack of inflation, along with economic issues in emerging markets, is the culprit for the extended low rate period.

Economically speaking, US economic data have been worse than expected lately.  However, reports are still showing overall growth in the economy.  Mostly importantly, job growth is still at a solid rate.  And, consumer confidence has been on the rise.

With the holiday season approaching, you can bet we’ll see an uptick in retail sales and consumption.  That will be good news for the economy – and probably the stock market as well.

Let’s take a look at some portfolio highlights…

 

Portfolio Highlights

Just a quick note:  We won’t update every open position every update.  I try to focus on the positions that have some significant news or price movement.

  • Freeport-McMoRan (FCX) December 9 Calls – We nailed this one! FCX has rebounded as we expected, and actually crossed both of our profit-taking exit points (conservative and aggressive).  Everyone should be out of this trade by now for a profit.  Peak gains for this trade are 238%!

 

  • Alcoa (AA) December 10 Calls – AA also hit a profit-taking exit point for us, but has since come back to earth to some extent. Conservative traders should have exited already, while aggressive traders can continue to hold for another surge.  We still have another two months on these calls.  Peak gains so far have been 125%.

 

  • JPM Morgan Chase (JPM) December 62.50 Calls – Despite lackluster earnings this past week, JPM has held its ground. That’s a good sign that this stock is ready to move higher.  Investors have strong expectations for the company’s future, and they’re basically not concerned with last quarter.  The stock just needs to break through the 50-day moving average (right at the current price) and it could be off to the races.

 

Category: AOA Updates