Netflix and Chilled, Interest Rates and Market Correction

Netflix reported a blow out 3rd quarter Tuesday afternoon. The stock rose as high as $400 before

settling around $385 and then opened Wednesday morning at $380. From there it went down along with FANG. Facebook, Amazon, and Alphabet found a bottom earlier than Netflix. Netflix found it's bottom around 355 before moving up for the afternoon. I like to see if that number will hold, but so far on Thursday is barely hanging on. Alphabet bottomed at 1115 which should be a key point to pay attention to on Thursday.

Today Alphabet opened higher at 1130 and went straight down to 1114 before bouncing up and then retesting that level at which I bought Call Options and it didn't hold as it went down to 1110. Much of the downward movement in stocks is due to the Federal Reserve minutes noting they still expect to raise interest rates 3 more times next year in addition to again in December. Rising interest rates is what Trump expects will kill the economy and he is right.

Higher interest rates cost all businesses more. Businesses finance expansion with the issuance of debt and small businesses may use debt to help with daily cash flow. Start up businesses may utilize debt to help establish themselves. Consumers use loans to purchase vehicles, homes and luxury items. If the businesses are being squeezed and the consumers have less desire to purchase higher end items, everyone loses, not just the housing sector.

The housing sector has extra constrains between higher material cost along with higher rates consumers have to pay for the mortgage loans. I believe the ultimate problem is the housing sector got fat and greedy from low interest rates for so long. Because interest rates were so low, people wanted larger houses that are larger than what they actually need. Where are they building homes for the average family? It isn't in Orlando, Florida.

Moving forward, Americans are going to have some of the largest tax refunds at the beginning of 2019. Housing may benefit some but with higher interest rates, not as much that will make a difference for the long term. People buy cars when they get big tax refunds regardless of the interest rates so I think Ford is positioning themselves to be the best along with Tesla. I think with Ford and Tesla at their 52 week lows they are a value and a growth buy for 2019 and investors will be happy by August of 2019.

Friday Market Boom!!!

• Trump Tweeted late last night that he can't wait until the jobs number is released this morning. It was a good one and the market reacted positively.
• FAANG hit new highs today. Facebook, Apple, Amazon and Netflix hit new all time highs today. Alphabet (GOOGL) had another day with a big run up. It closed Thursday at 1100 even and shot up to 1138 which makes 70 points in 3 days! Apple is hosting a developers conference next week. I would believe that FAANG will run up next week and Alphabet will break it's all time high by the end of the week, but might fall next Friday.
• Ford released sales numbers that were up .7% when it was expected to be down 1.4%. Many think that GM is the less expensive stock, but Ford is restructuring and going to excel in the long run.
• Sunrun (RUN) hit a 52 week high today. I am fond of Sunrun as I went with them to put the solar panels on our home. I believe they are over looked in the solar sector as they make a profit and most others have not reported a profit.
• All most everything was up today including the banks like JP Morgan. Boeing ran up quickly to 358 in the first 15 minutes then fell back below 355 and ended the day just under 357. 
• Yesterday's reaction to the tariff talk was mild to the downside. Today's positive job report erased every one's memory of what a tariff is. Now that earning season is just about over, geopolitical concerns may be all that drives the market.

More Tariffs Equal Selloff

• After a great Wednesday in the market, Trump announced more tariffs on Canada, Mexico and Europe and the market reacted Thursday. Boeing was sold off as was some others that have risen quite a bit over the past week. I would expect them to rebound Friday as they realize the tariff talk is just talk.
• Alphabet (GOOGL) took off while everything else was down. The tech sector did was mixed today, but Alphabet was the big winner as once it past 1100, it touched 1098 twice. What was really interesting was how it took off when everything else was down and when the market would come up some, Alphabet would go higher. Typically 2pm shows a peak in the momentum direction. It was a dipping pont for Alphabet as it went back up with the market in the last couple of hours of the market.
• Facebook (FB) was up nicely on Thursday as they held an investors conference. Jim Crammer of CNBC's Mad Money made a nice point today how the European new privacy rules will probably affect smaller websites more than huge web marketers like Googe and Facebook.
• General Motors (GM) had a nice pop to the upside today as they are teaming up with Waymo in autonomus driving. Jim Crammer pointed out that until today GM was the most undervalued stock in the S&P. I might believe that GM is going to benefit by Ford (F) reducing their automobile line up, however Ford is making a shift for more profitability and I would not count them out in their new auto lineup. I am sure Ford will produce the most economical vehicles and their stock will take off in the long run. Buy and reinvest your dividends as you will be very happy by 2020.

Tuesday Selloff

• Auto stocks were up (except Tesla) on news that China was going to lower tariffs on imports. Who knows if they will stick?
• Banks were up when everyone else was down from the vote on the restrictions removed from the financial crisis of 2008.
• Everything else started higher and ended lower. Home Depot (HD) moved down quickly as it was announced that the CEO of JC Penny's is leaving to become the CEO of Lowe's who reports earnings tomorrow morning. I see this will create further opportunity for Home Depot after Lowe's earnings is reported. I would expect Home Depot to go further down and reverse course Wednesday around noon.
• Boeing moved down further due to the trade talks or just cooling down. Either way I thought it moved too fast last week and Monday. I would expect it to go further down on Wednesday and change direction around noon also.
• Micron (MU) moved up yesterday and further after the market close on Monday. It held on to the gains while Nvidia went further down on Tuesday.