Oct 31, 20202 min

👻Looks like we just got ghosted🎃

Hi friends,

Uncertainty gave indices a wallop this past week and we're looking at retracement lows from about a month ago. With fear from covid and the volatility from election seasons, markets ended deep in the red with a couple of days encountering steep drops.

Major indices got real ugly at the end of the week: (10/30/20):

  • Dow Jones Industrial Average: 26,501.60 -157.51 (-.59%)

  • S&P 500: 3,269.96 -40.15 (-1.21%)

  • Nasdaq: 10,911.59 -274.00 (-2.45%)

  • Russell 2000: 1,538.48 -23.10 (-1.48%)

After big companies reported some strong earnings last week, it looks like there's still hesitation due to the end of year challenges many companies face. Microsoft beat estimates by 20%, Facebook by over 25%, and Amazon by over 65%. Yowza. For this upcoming week, there's a couple of earnings left over on the coming Monday. (week of 11/2/20-11/6/20):
 

11/2/2020:

  • CLX

  • EL

  • LNT

Looking good is as important as ever even when everyone's working from home. When you're on the camera, all anyone ever sees is your face so it's probably MORE important. Cosmetics companies like Estee Lauder (EL) has seen some strong growth during the pandemic. Naturally, we should look at how well they performed for earnings.

Last 4 earnings report:

  • 2020 Q2: miss

  • 2020 Q1: beat

  • 2019 Q4: beat

  • 2019 Q3: beat

3-year total revenue

  • June, 2020: Lower than previous

  • June, 2019: Higher than previous

  • June, 2018: Higher than previous

Technicals:

  • 3-month: ~ +10.29%

  • 1-year: ~ +17.88%

  • 5-year: ~ +160.57% 

That looks really solid, but keep in mind, any business that hinges a good chunk of their revenue on physical, in-store purchases. may be affected. It's still an optimistic outlook, especially when guidance saw a significant rise (although not at the levels of q3 of the previous year). It's generally safer to stay inland when things are volatile, but once the dust settles from earnings and elections, get those checkbooks ready. Check out how you can make extra cash by selling covered calls on our Level 1 Courses.

Until next time!

- Call to Leap Team

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