Update: October 24, 2016

| October 24, 2016

October 24, 2016

 

Portfolio Update

Individual stocks are moving on earnings, but the overall market has been pretty tepid the last couple weeks.  Barring anything unforeseen, the next potentially market-moving catalyst will be the FOMC meeting the first week of November.  Rates are expected to remain steady, however we could find out more info on the likelihood of a December rate hike.

At this point, the election is looking like a non-event for the market, with the results already built in.  A Clinton win could be hard on biotech and healthcare stocks, but could also provide a boost for infrastructure stocks.  Keep in mind, the results may very well be incorporated into current prices.

From a performance standpoint, stocks are having a reasonable year.  The S&P 500 is up over 6.5% year-to-date, while the Russell 2000 is up 9.5%.  Small caps are doing the best in terms of returns from major US equity groups.

Commodities continue to be mixed, with sugar leading the charge, up 43%.  Gold is up 18% and precious metals are having a good year overall.  Oil is back to being a winner this year, with crude oil up 8%.  Agricultural commodities have been hit the hardest this year with the exception of soybeans.

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.

  • Blackstone Group (BX) December 24 Calls – We’re off to a great start in our BX calls. Big news on one of the company’s investments caused the stock to shoot higher, hitting our first profit-taking point.  In less than a week, we’ve already hit peak gains of 106%.

 

  • Lions Gate Entertainment (LGF) December 20 Puts – LGF traded down to the bottom of its recent range before recovering this past week. However, the selloff allowed the stock to hit our first profit-taking point before the reversal.  Peak gains so far are 22%, but feel free to hold for bigger gains with these puts not expiring until December.

 

  • Morgan Stanley (MS) November 32 Calls – Sometimes stocks move in gaps, other times it’s more of a slow grind. MS is a case of the latter, where the stock has been slowly grinding up towards our first profit-taking point.  Slow gains can work quite well too, as peak gains in MS are up to 50% so far.

 

Category: AOA Updates

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