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Category: Dow Jones, Nasdaq and S&P500
Date: 29 June 2020 We take a look at the performance of the Dow Jones, Nasdaq and S&P500 for the week ending 26 June 2020. The week was dominated by renewed fears of a second wave of coronavirus cases and continued promises by the Federal Reserve to keep buying bonds and providing liquidity to the markets. All three major indices closed moderately in the red. It saw a few up and few significant down days.
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Warren Buffett the world's best known investor said, be greedy when others are fearful, be fearful when others are greedy. Basically sell offs providing buying opportunities for savvy investors. Note buying opportunities. Not selling opportunities."
Dow Jones, Nasdaq and S&P 500 all recorded declines for the week
The image below shows the returns of the Dow Jones (DJIA), Nasdaq and S&P 500 over the last week (15 June 2020 to 19 June 2020). As the graphic shows all three major US market indices recorded moderate increases for the week ending 19 June 2020
Below the returns of the main market indices over the last week (sorted from best performer to worst performer)
While markets recorded moderate increases during the last week, we believe the markets has to drop more to accurately reflect the impact of Covid-19 on the US economy, its companies and its people. Below an extract of an article we wrote yesterday regarding the recent declines in the markets.
- Nasdaq: -1.85%
- S&P 500: -2.86%
- Dow Jones: -3.31%
While markets recorded moderate increases during the last week, we believe the markets has to drop more to accurately reflect the impact of Covid-19 on the US economy, its companies and its people. Below an extract of an article we wrote yesterday regarding the recent declines in the markets.
So lets take a look at some of the major market events during the last week
26 June 2020: The Dow Jones ended the day, 26 June 2020 down by -2.82%. We do believe the Dow Jones (DJIA) has a lot more downside to come. as its current lofty valuations does not fully take into account the impact of the Covid-19 pandemic on the US economy and economies across the world
Dow Jones Updates
Website Updates
Earlier we covered the latest earnings report of Nike Inc (NKE). Below a short extract from that article
So what do we value one of the worlds biggest clothing and apparel brands stock at following their 4th quarter 2020 earnings report? Based on Nike's latest earnings report for the 4th quarter of their 2020 fiscal year what is our target price (full value price) of Nike Inc. stock?
Based on their latest earnings report our valuation models provides a target price (full value price) for Nike Inc at $58.40 a stock. We therefore believe Nike Inc stock is currently overvalued and we would not recommend long term fundamental and value investors buy into the stock at its current price. We usually suggest looking to buy at least 10% below our target price which in this case is $58.40. We therefore believe a good entry point into the stock of Nike Inc stock is at $52.60 or below.
We expect the stock of Nike to pull back from current levels to levels closer to our target price (full value price) in coming weeks and months. And while the sell off sparked by Coronavirus fears has seen the stock of Nike pull back strongly, we believe the stock has some significant downside risk to it.
Read the full article here
25 June 2020: The Dow Jones ended the day, 25 June 2020 up by 1.18%.
Dow Jones Updates
Website updates
In our continued stock comparison page we had the battle of the Brewers. We compared Boston Beer Company (SAM) against Molson Coors (TAP). Below an extract of that article.
So if one had to buy one of these two brewers now which one is the better buy? Does Molson Coors provide a better buying opportunity due to its stock price declines compared to the sharp increase in the stock price of Boston Beer Company, or is the underlying fundamentals of Boston Beer Company just so much better than that of Molson Coors?
One of our key metrics is the Price to stockholders equity per share ratio. When looking at this we find the following for both stocks:
Based on this metric Molson Coors offers far more value than Boston Beer Company. Most firms tend to trade at a ratio of between 2 and 4 times. Boston is trading at well above the expected range and Molson Coors trading at well below the expected range.
Read the full article here
24 June 2020: The Dow Jones ended the day, 24 June 2020 down by -2.72%. So the Dow has seen a significant decline today and we believe that there is a lot more pain to come for investors. We cannot see the markets holding on to current levels considering the devastating impact the Covid-19 pandemic is having on economies across the world.
Earlier today we looked at the stock of Mcdonalds and compared it against that of Chipotle in our battle of the quick service restaurants. Below an extract of that article.
So if one had to buy one of these two quick service restaurant brands which one would it be? Which one is most likely to offer superior stock price returns based on their current stock price and their financial results. Chipotle has some stockholders equity, around $60 a stock, this while Mcdonalds is sitting with a stockholders deficit of close to -$9.3 billion. Chipotle has the far higher PE ratio of the two stocks. Mcdonalds dividend yield is also stronger and their stock price has run up far less than that of Chipotle over the last 3 years. Mcdonalds also has a far greater global reach and brand name and therefore if we have to decide between Mcdonalds (MCD) or Chipotle (CMG) now.. We would pick Mcdonalds as our winner.
Read the full article here
Dow Jones Updates
- (13:35 ET): Dow Jones Industrial Average (DJIA) is currently down strongly by -2.2% with about 2 and a half hours of trading left. So it looks like the Dow Jones will close on a negative note for the 2nd Friday in a row.
- (06:47): Dow Jones futures are currently down by -0.23% indicating a slightly negative open can be expected at the start of the trading day for the Dow Jones
Website Updates
Earlier we covered the latest earnings report of Nike Inc (NKE). Below a short extract from that article
So what do we value one of the worlds biggest clothing and apparel brands stock at following their 4th quarter 2020 earnings report? Based on Nike's latest earnings report for the 4th quarter of their 2020 fiscal year what is our target price (full value price) of Nike Inc. stock?
Based on their latest earnings report our valuation models provides a target price (full value price) for Nike Inc at $58.40 a stock. We therefore believe Nike Inc stock is currently overvalued and we would not recommend long term fundamental and value investors buy into the stock at its current price. We usually suggest looking to buy at least 10% below our target price which in this case is $58.40. We therefore believe a good entry point into the stock of Nike Inc stock is at $52.60 or below.
We expect the stock of Nike to pull back from current levels to levels closer to our target price (full value price) in coming weeks and months. And while the sell off sparked by Coronavirus fears has seen the stock of Nike pull back strongly, we believe the stock has some significant downside risk to it.
Read the full article here
25 June 2020: The Dow Jones ended the day, 25 June 2020 up by 1.18%.
Dow Jones Updates
- (13:38): The Dow Jones Industrial Average is up by 0.30% for the day, as at the time of writing. But we still believe the Dow and rest of the markets is set for significant declines due to the impact of Covid-19. We dont believe current market valuations is taking the full impact of Covid-19 into account.
- (10:11): The Dow Jones Industrial Average has been open for trade for about 40 minutes and its down slightly at -0.12%
- (01:02); The Dow Jones Industrial Average (DJIA) futures are currently down -0.72%. So while the negative trend the Dow ended on yesterday continued today?
Website updates
In our continued stock comparison page we had the battle of the Brewers. We compared Boston Beer Company (SAM) against Molson Coors (TAP). Below an extract of that article.
So if one had to buy one of these two brewers now which one is the better buy? Does Molson Coors provide a better buying opportunity due to its stock price declines compared to the sharp increase in the stock price of Boston Beer Company, or is the underlying fundamentals of Boston Beer Company just so much better than that of Molson Coors?
One of our key metrics is the Price to stockholders equity per share ratio. When looking at this we find the following for both stocks:
- Price/Stockholders equity per share for Boston Beer Company (SAM) : 8.67
- Price/Stockholders equity per share for Molson Coors (TAP) : 0.61
Based on this metric Molson Coors offers far more value than Boston Beer Company. Most firms tend to trade at a ratio of between 2 and 4 times. Boston is trading at well above the expected range and Molson Coors trading at well below the expected range.
Read the full article here
24 June 2020: The Dow Jones ended the day, 24 June 2020 down by -2.72%. So the Dow has seen a significant decline today and we believe that there is a lot more pain to come for investors. We cannot see the markets holding on to current levels considering the devastating impact the Covid-19 pandemic is having on economies across the world.
- (10:13 ET); The Dow Jones is down significantly in the first 40 minutes of trade today, with the index trading down almost -1.6%
- (03:58 ET): Dow Jones futures are currently down -0.4% so it looks like the US markets are heading for a negative open, and this will be in line with the current negative markets in Europe
Earlier today we looked at the stock of Mcdonalds and compared it against that of Chipotle in our battle of the quick service restaurants. Below an extract of that article.
So if one had to buy one of these two quick service restaurant brands which one would it be? Which one is most likely to offer superior stock price returns based on their current stock price and their financial results. Chipotle has some stockholders equity, around $60 a stock, this while Mcdonalds is sitting with a stockholders deficit of close to -$9.3 billion. Chipotle has the far higher PE ratio of the two stocks. Mcdonalds dividend yield is also stronger and their stock price has run up far less than that of Chipotle over the last 3 years. Mcdonalds also has a far greater global reach and brand name and therefore if we have to decide between Mcdonalds (MCD) or Chipotle (CMG) now.. We would pick Mcdonalds as our winner.
Read the full article here
Chart of the Dow Jones Industrial Average (DJIA) vs Nasdaq vs S&P500 over last 10 years
The graphic below shows the performance of the Dow Jones Industrial Average (DJIA) index over the last month. As soon as a user clicks on the Nasdaq or S&P500 the graphic recalculates and shows the returns of the additional indices selected. The graphic will recalculate the returns if users provide their own dates, within the last 10 year (or they can select predefined dates from our Zoom box in the graphic). Data for the graphic obtained from MacroTrends.Net
Below the returns of the main market indices over the last 12 months (sorted from best performer to worst performer)
So from the above its is clear that the Nasdaq has easily outperformed other major indices such as the S&P 500 and The Dow Jones over the last 12 months. The same can be said about the 2 year performance, 3 year performance, 5 year performance and 10 year performance, as tech giants listed on the Nasdaq has been driving the performance of the Nasdaq.
- Nasdaq: 19.61%
- S&P 500: 0.62%
- Dow Jones (DJIA): -7.08%
So from the above its is clear that the Nasdaq has easily outperformed other major indices such as the S&P 500 and The Dow Jones over the last 12 months. The same can be said about the 2 year performance, 3 year performance, 5 year performance and 10 year performance, as tech giants listed on the Nasdaq has been driving the performance of the Nasdaq.