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Thematic Growth Investment Portfolio – IB Asset Management
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The Week Ahead:Â What To Watch
The most significant piece of news to kick-off the week of October 16, will be Netflix ($NFLX) which is due to report results on Monday, October 16 after the close of trading. We previewed the quarterly results in a commentary write up on October 14.
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Biotech
Using the Nasdaq Biotech ETF as a proxy ($IBB), the biotech sector has been stagnating for some time. The group has been able to catch a bid over the past couple of weeks, and we will want to see this sector begin to come back to life. The ETF is up by nearly 27 percent so far in 2017, easily outpacing the SP 500’s 14 percent, but October has been a bit of bust for the sector.
Over the past month, only one of the big four biotechs has beaten the SP 500, Biogen ($BIIB). Amgen ($AMGN), Gilead Science ($GILD), and Celgene ($CELG) have all underperformed the broader SP 500 and the Nasdaq Biotech ETF, IBB. Even the more evenly weighted SPDR Biotech ETF ($XBI) has seen its performance slump in recent days.
Is it because of a rotation or is there something more going on here? The biotechs have been one of the most influential group’s in 2017, behind the chipmakers ($SOXX). This group will need to continue to thrive for the market’s move higher to remain strong.
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The Financials
Financials have been one of the stronger sectors over the past month, but the market seems unimpressed by the latest round of results out of JP Morgan ($JPM), Bank of America ($BAC), and Citigroup ($C). With each of the stocks falling some over the past couple of days. Perhaps a rotation in the bank came at the expense of the biotech names. But if the financials continue to wane, maybe that will money will find its way back into biotech.
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Chips
Chips just continue to rocket higher, and they should also continue to rise. In fact, one of the worst performing chips Intel ($INTC) recently made a high not seen since 2001. Shares of the chipmaker, are up about 9.5 percent so far in 2017, underperforming the broader iShares PHLX Semiconductor ETF ($SOXX) by nearly 25 percentage points. Unlock Deeper Insights with Exclusive Member-Only Video Content on The Market Chronicles YouTube Channel – Just $34.99/Month
Intel recently broke out of a nearly two-decade slumber, when it rose above $39 for the first time since 2001. It could pave the way for the eventual rise to $48.
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Technology
Technology stocks just continue to rise as well, using the Technology Select Sector SPDR ($XLF) as a proxy. There have only been a few times the ETF has risen above its trading channel.
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Our Chart of The Week Video: Tesla’s May Rise To $400
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Michael Kramer and the clients of Mott Capital own shares of NFLX, GOOGL, CELG
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Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future.
Tags: Netflix, GE, AMD, AMZN, NFLX, HON, GOOGL, MU
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Charts used with the permission of Bloomberg Finance L.P. This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.