US Market Falls Tuesday

U.S. stocks were in the red on Tuesday. The Dow Jones Industrial Average declined 0.66% to 25,962, the S&P 500 index fell 0.79% to 2,900 and the Nasdaq Composite Index slid 0.68% to 7,949.

Shares of Baidu Inc. (NASDAQ:BIDU) gained more than 4% after announcing second-quarter results. The company posted earnings of $1.47 per share on $3.84 billion in revenue, reflecting 1.1% growth from the prior-year quarter. The company beat earnings estimates by 55 cents and revenue expectations by $120 million.

The operating income was 233 million yuan ($31.5 million), while the operating margin was 1%. The operating income for Baidu Core was 2.1 billion yuan, and the operating margin was 11%.

Further, the non-GAAP operating income was 2.0 billion yuan, and the non-GAAP operating margin was 7%.The non-GAAP operating income for Baidu Core was 3.5 billion yuan, and the non-GAAP operating margin was 18%.

Moreover, the adjusted earnings before interest, taxes, depreciation and amortization was 3.4 billion yuan and the adjusted Ebitda margin was 13%.

Looking ahead to the third quarter, the company expects revenue to be between 26.9 billion yuan and 28.5 billion yuan.

During the quarter ended June 30, the Tweedy Browne (Trades, Portfolio) Global Value Fund boosted its stake by 74.2% to 1,356,297 shares. Steven Romick (Trades, Portfolio) reduced his holding by 1.5% to 1,791,516 shares. The Matthews Pacific Tiger Fund (Trades, Portfolio) and Jim Simons (Trades, Portfolio)’ Renaissance Technologies sold out of the stock.

Gainers

Losers

Global Markets

The main European stock markets traded in the red. The U.K.’s FTSE 100 declined 0.90%, France’s CAC 40 dipped 0.50%, Germany’s Dax fell 0.55% and Spain’s IBEX 35 retreated 1.32%.

In Asia, Japan’s Nikkei 225 gained 0.36%, India’s BSE Sensex lost 0.20%, Hong Kong’s Hang Seng fell 0.23% and China’s Shanghai Composite slid 0.11%.

Disclosure:The author holds no positions in any stocks mentioned.

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Stock Market Today- Baidu and Sina Lead a Recovery of Chinese Stocks

It was a message meant to warn investors that stocks were in jeopardy. But, as has been the case for months now, investors ignored the warning.

The message in question came from Morgan Stanley’s chief United States equity strategist Mike Wilson, who noted on Monday that “The puts have expired.” In other words, “With the Fed’s first rate cut in a decade not having the desired effect on markets and a trade deal looking less likely every week, these two puts (the Fed and Trade Deal) may have expired, leaving investors facing the potential reality there is no second half rebound coming.”

The market may have shrugged off the warning and sent the S&P 500 up to the tune of 1.3%, on the heels of comments from Commerce Secretary Wilbur Ross. The country’s chief business development leader explained in a Fox Business news interview that the government had extended a temporary license allowing an otherwise-banned Huawei to do business with U.S. partners.

The added 90 days not only gives its American customers time to make alternative arrangements, but tacitly suggests the current administration is becoming more flexible on trade matters. The Nasdaq Composite outpaced the S&P 500, rallying 1.4% in response to the easing trade tensions with China.

The unwinding of last week’s inversion of the bond yield curve may have played a role in re-inflating confidence as well.

Top News in the Stock Market Today

PG&E Corporation (NYSE:PCG) isn’t out of the woods yet, it seems. Shares of the utility company implicated in last year’s California wildfires had been on the mend. PCG hit bottom in January, when it appeared regulators and lawyers weren’t looking to destroy it. Last Friday, however, a U.S. bankruptcy judge determined that an $18 billion suit against the company for damages and death

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TSX Ends Notably Lower On Profit Taking

The Canadian stock market ended notably lower on Tuesday after languishing in the red right through the day’s session as traders chose to take profits after two successive days of gains.

Weakness in European and U.S. markets and caution ahead of the release of the minutes of the Federal Reserve’s July meeting also rendered the mood weak.

The benchmark S&P/TSX Composite Index ended down 90.74 points, or 0.56%, at 16,213.31. The index, which opened at 16,281.40, touched a low of 16,198.90 in the session.

The index ended with a gain of 0.96% on Monday, after having moved up 0.86% on Friday.

Telecommunications, energy and financial shares were among the most prominent losers. Shares from industrial and consumer staples sections too ended mostly weak. Cannabis shares were weak as well, while shares from materials and information technology sections posted gains.

Telecom stock Rogers Communications (RCI.B.TO) shed 2%. Telus Corp (T.TO) and Shaw Communications (SJR.B.TO) ended lower by 1.6% and 1.5%, respectively. BCE (BCE.To) declined 1%.

Among energy shares, Precision Drilling (PD.TO) declined nearly 6%. Canadian Natural Resources (CNQ.TO), Seven Generations Energy (VII.TO), Vermilion Energy (VET.TO), Enerplus Corp. (ERF.TO), Suncor Energy (SU.TO) and Imperial Oil (IMO.TO) lost 1.4 to 2.5%.

On the other hand, Tourmaline Oil Corp (TOU.TO) and Crescent Point Energy (CPG.TO) gained 2.75% and 1.95%, respectively.

In the financial space, Onex Corp (ONEX.TO), CDN Western Bank (CWB.TO), Manulife Financial (MFC.TO), Bank of Montreal (BMO.TO), Toronto-Dominion Bank (TD.TO), Sun Life Financial (SLF.TO), Canadian Imperial Bank of Commerce (CM.TO) and Royal Bank of Canada (RY.TO) lost 1 to 2%.

Among the stocks in the materials index, Iamgold Corp. (IMG.TO) spurted 7.2%. Torex Gold Resources (TXG.TO), First Majestic Silver (FR.TO), B2Gold Corp (BTO.TO) and Novagold (NG.TO) gained 4 to 5.2%.

Yamana Gold (YRI.TO), Ssr Mining (SSRM.TO), Barrick Gold (ABX.TO), Kirkland Lake Gold (KL.TO),

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10 Undervalued Stocks With Breakout Potential

The stock market has rushed to all-time highs in 2019 and — despite recent trade-inspired turbulence — is still on pace to have one of its best years in recent memory. But not all stocks have joined in on the rally. Instead, a handful of stocks have actually had a rough 2019, dropping big year-to-date into historically undervalued territory — even while the market trades at a decade-high valuation.

Some of these undervalued stocks are undervalued for a reason, and should be avoided for the foreseeable future. The fundamentals simply don’t warrant a turnaround.

But some of these undervalued stocks look primed for a breakout. That is, some of them appear unreasonably undervalued, with big catalysts on the horizon — a combination which paves a tangible pathway for big upside.

With that in mind, let’s take a look at 10 undervalued stocks with breakout potential in the back-half of 2019.

Foot Locker (FL)

Source: Shutterstock

The Valuation: Because the athletic apparel sector sources a lot of production from China, many athletic apparel stocks find themselves at the epicenter of the U.S.-China trade war. Foot Locker (NYSE:FL) is no exception. The company’s margins have come under significant pressure thanks to tariffs, and in response, investors have sold off FL stock to an anemic 8-times forward earnings multiple, versus a five-year-average forward multiple north of 12, a consumer discretionary sector average multiple north of 20, and a footwear sector average multiple north of 28.

The Breakout Catalyst: Foot Locker’s demand trends are healthy. Last quarter, Foot Locker reported nearly 5% comparable sales growth. Thus, the whole problem here is the trade war. If the trade war cools, FL stock will presumably rally in a big way. It increasingly appears that this will happen. U.S. President Donald Trump has delayed the next

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Stocks – S&P Pulls Back After Three Days of Wins

© Reuters.

Investing.com – After three days that produced big gains, stocks pulled back on Tuesday.

The fell 0.8%. The dropped 0.7% and the slid 0.7%.

The easy explanation – also a likely one – is that investors decided to cash in recent gains to see what will happen next. The risks to the market haven’t gone away, and investors showed their concerns with a wave of selling in the last 15 minutes of trading.

In addition, interest rates moved lower, a signal of demand for lower-risk assets. The Treasury yield fell to 1.552% from Monday’s 1.598%. The narrowed to 4.32 basis points from Monday’s 5.58 basis points.

The spread actually went negative last week, seen by many investors as a signal a recession might be ahead. That caused markets to slump badly on Wednesday, with the Dow off 800 points. President Donald Trump suggested the administration might cut rates on payroll taxes to support the economy.

While the president has insisted the economy is strong, he also called on the Federal Reserve to cut its key interest rate by 100 basis points. The Fed cut its federal fund rates by a quarter point on July 31. Minutes from that Fed Meeting will be released Wednesday afternoon and will offer a look at how the central bank views the economy.

The Fed is expected to vote for another rate cut at its Sept. 18 meeting.

With Tuesday’s selling, the major averages remain 4% or more below their peaks reached in July. The S&P 500 is off 4.2% from its July high. The Dow is down 5.2%

The Nasdaq is off 4.7%, with the index down 4.52%. The Nasdaq 100 was off 0.71% on the day.

An additional factor that probably came into play — many investors and money managers go

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Dow snaps three-day winning streak

The drop follows a week and a half of turbulent trading. The Dow (INDU) closed 0.7% lower, while the S&P 500 (SPX) fell 0.8% and the Nasdaq Composite (COMP) declined 0.7%. With news about trade wars, recessions and economic stimulus abating for the time being, investors are now waiting for Federal Reserve Chairman Jerome Powell’s speech at Jackson Hole on Friday to see if he can help boost the market again. Investors will watch Powell’s speech closely Friday morning for signs of further interest rate cuts and his assessment of the US economy. Expectations for a September rate cut are at 100%, with a 95% chance for a quarter percentage point cut, according to the CME FedWatch tool. That’s up from 90% at the start of the day. Although these high expectations suggest another rate cut is already priced in, stocks could rally if Powell sounds dovish on Friday. President Donald Trump tweeted Monday that the Fed should cut rates by “at least” one percentage point. On Tuesday, Trump told reporters that the central bank needed to be proactive. Before Powell takes the stage, Fed Vice Chairman Randal Quarles will give a speech after the Tuesday market close. The minutes of the July Fed meeting, where the central bank cut rates by a quarter percentage point for the first time since 2008, come out on Wednesday. With all this waiting in the wings, demand for safer assets will likely remain high. The 10-year US Treasury yield once again fell Tuesday, reversing Monday’s rally, and is sitting around 1.5%. Elsewhere, China signaled further action to boost its economy, with Liu Guoquiang, the deputy governor of the People’s Bank of China, saying there was room for rate cuts. Beijing’s economic health is crucial for global growth. European stocks, including the

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US STOCKS SNAPSHOT-Wall Street rally stalls as financials slide

NEW YORK, Aug 20 (Reuters) – Financial shares led U.S. stocks lower on Tuesday to end a three-day rally as investors awaited comments from Federal Reserve Chair Jerome Powell at the end of the week.

The Dow Jones Industrial Average fell 170.09 points, or 0.65%, to 25,965.7, the S&P 500 lost 22.88 points, or 0.78%, to 2,900.77 and the Nasdaq Composite dropped 54.25 points, or 0.68%, to 7,948.56. (Reporting by April Joyner; editing by Jonathan Oatis)

Our Standards:The Thomson Reuters Trust Principles.

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Mario Gabelli's Gabelli Value 25 Fund 2nd Quarter Commentary

To Our Shareholders,

For the quarter ended June 30, 2019, the net asset value (NYSE:NAV) per Class A Share of The Gabelli Value 25 Fund increased 4.1% compared with increases of 4.3% and 3.2% for the Standard & Poor’s (S&P) 500 Index and the Dow Jones Industrial Average, respectively. Other classes of shares are available. See page 2 for additional performance information for all classes.

An Economic Rorschach Test

Swiss psychologist Hermann Rorschach created his eponymous ink-blot exam in 1921. In the classical test, an administrator records the responses to ten abstract images, hoping to illuminate the subject’s motivations, inner conflicts, and modes of perception. The current political climate has certainly served as its own ink-blot test, with the President trumpeting an economy “better than it has been in decades” and those opposed highlighting stagnant wages and growing inequality.

We, of course, attempt to array and interpret macro and micro economic data in as objective a manner as possible, but that makes conclusions about the direction of the economy no less confounding. On one hand, July 2019 marked the 121st month of consecutive growth in the U.S. – the longest expansion on record. At 3.7%, unemployment is the lowest since the 1960s, household wealth is at a record, and housing growth remains solid, all while inflation remains tame. On the other hand, indicators of global manufacturing health are rolling over, international regions including China are slowing markedly, and the yield curve is partially inverted (i.e., the yield on 3-month U.S. Treasury Bill currently exceeds that on the 10-year Treasury note) which historically has preceded recessions (again, dependent on your frame of reference). Trade disputes with Europe, China, and Mexico have weighed on corporate confidence and on earnings for importers, who cannot fully pass along increased costs, and exporters, who

Read More Here...

Mario Gabelli's Gabelli Value 25 Fund 2nd Quarter Commentary

To Our Shareholders,

For the quarter ended June 30, 2019, the net asset value (NYSE:NAV) per Class A Share of The Gabelli Value 25 Fund increased 4.1% compared with increases of 4.3% and 3.2% for the Standard & Poor’s (S&P) 500 Index and the Dow Jones Industrial Average, respectively. Other classes of shares are available. See page 2 for additional performance information for all classes.

An Economic Rorschach Test

Swiss psychologist Hermann Rorschach created his eponymous ink-blot exam in 1921. In the classical test, an administrator records the responses to ten abstract images, hoping to illuminate the subject’s motivations, inner conflicts, and modes of perception. The current political climate has certainly served as its own ink-blot test, with the President trumpeting an economy “better than it has been in decades” and those opposed highlighting stagnant wages and growing inequality.

We, of course, attempt to array and interpret macro and micro economic data in as objective a manner as possible, but that makes conclusions about the direction of the economy no less confounding. On one hand, July 2019 marked the 121st month of consecutive growth in the U.S. – the longest expansion on record. At 3.7%, unemployment is the lowest since the 1960s, household wealth is at a record, and housing growth remains solid, all while inflation remains tame. On the other hand, indicators of global manufacturing health are rolling over, international regions including China are slowing markedly, and the yield curve is partially inverted (i.e., the yield on 3-month U.S. Treasury Bill currently exceeds that on the 10-year Treasury note) which historically has preceded recessions (again, dependent on your frame of reference). Trade disputes with Europe, China, and Mexico have weighed on corporate confidence and on earnings for importers, who cannot fully pass along increased costs, and exporters, who

Read More Here...

Mario Gabelli's Gabelli Value 25 Fund 2nd Quarter Commentary

To Our Shareholders,

For the quarter ended June 30, 2019, the net asset value (NYSE:NAV) per Class A Share of The Gabelli Value 25 Fund increased 4.1% compared with increases of 4.3% and 3.2% for the Standard & Poor’s (S&P) 500 Index and the Dow Jones Industrial Average, respectively. Other classes of shares are available. See page 2 for additional performance information for all classes.

An Economic Rorschach Test

Swiss psychologist Hermann Rorschach created his eponymous ink-blot exam in 1921. In the classical test, an administrator records the responses to ten abstract images, hoping to illuminate the subject’s motivations, inner conflicts, and modes of perception. The current political climate has certainly served as its own ink-blot test, with the President trumpeting an economy “better than it has been in decades” and those opposed highlighting stagnant wages and growing inequality.

We, of course, attempt to array and interpret macro and micro economic data in as objective a manner as possible, but that makes conclusions about the direction of the economy no less confounding. On one hand, July 2019 marked the 121st month of consecutive growth in the U.S. – the longest expansion on record. At 3.7%, unemployment is the lowest since the 1960s, household wealth is at a record, and housing growth remains solid, all while inflation remains tame. On the other hand, indicators of global manufacturing health are rolling over, international regions including China are slowing markedly, and the yield curve is partially inverted (i.e., the yield on 3-month U.S. Treasury Bill currently exceeds that on the 10-year Treasury note) which historically has preceded recessions (again, dependent on your frame of reference). Trade disputes with Europe, China, and Mexico have weighed on corporate confidence and on earnings for importers, who cannot fully pass along increased costs, and exporters, who

Read More Here...