Tag: Correction

Mastercard: Double-Digit Return Thesis Intact Despite 10% Correction (NYSE:MA)

Introduction

We review our investment case on Mastercard (NYSE:MA) after shares corrected by nearly 10% from their $367.25 peak on August 28.

Since our initial Buy rating in March 2019, MA shares have returned 41.8% (including dividends), more than double that of the S&P 500:

The move to digital payments is a strong secular trend, and we also have Buy ratings on Visa (V) and PayPal (PYPL), which have also done well; we have been Neutral on American Express (AXP), which underperformed as expected.

We last reiterated our Buy rating on MA in May. In this article, we utilise the company’s Q2 2020 results and post-Q2 volume data, as well as comments by senior executives at investor conferences.

Volumes Now in “Normalization” Phase

MA management believes that most markets are now in the “normalization” phase of the COVID-19 outbreak, but not yet resuming “growth”:

“Remember us talking about a four-stage

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The September Selloff: A Healthy Correction, Or The Start Of A New Bear Market?

On the latest edition of Market Week in Review, Quantitative Investment Strategist Dr. Kara Ng and Head of AIS Business Solutions Sophie Antal Gilbert discussed the recent market selloff and the performance disparities between growth and value stocks this year. They also provided an update on the potential for a second U.S. fiscal stimulus package.

The known unknowns: Culprits of the recent market selloff?

Since charting a new record high on Sept. 2, Ng noted that the S&P 500 Index has fallen nearly 10%. Does this mean the U.S. equity market is experiencing a correction – or could the recent selloff mark the start of a new bear market?

“While 2020 has taught us to be humble with our predictions, the information we have today indicates that September’s selloff is likely just a market correction,” she stated. Ng noted that the downturn in equities is a bit unusual, as

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Dow slides over 800 points, while S&P 500 veers close to correction territory

U.S. stocks fell sharply on Monday amid concerns about the COVID-19 trajectory in Europe, as news reports allege major global banks continued doing business with customers suspected of wrongdoing, and a lack of progress toward another round of fiscal stimulus out of Washington.

What are major benchmarks doing?

The Dow Jones Industrial Average
US:DJIA
fell 822.57 points, or 3%, to 26,827. The Nasdaq Composite
US:COMP
shed 174 points, or 1.6%, to 10,620. The S&P 500
US:SPX
slipped 73 points, or 2.2%, to 3,245. If the broad-market index finishes below 3,222.76, it would enter correction territory, defined as a 10% drop from its recent peak.

Major U.S. benchmarks have suffered three consecutive weekly losses. The Dow fell 244.56 points Friday, or 0.9%, to end at 27,657.42, dragging the blue-chip gauge to a 0.03% weekly decline. The S&P 500 and the tech-heavy Nasdaq Composite both booked weekly losses of 0.6%.

The small-cap

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Weekly S&P 500 ChartStorm – The Correction Continues

Those that follow my personal account on Twitter will be familiar with my weekly S&P 500 #ChartStorm in which I pick out 10 charts on the S&P 500 to tweet. Typically I’ll pick a couple of themes to explore with the charts, but sometimes it’s just a selection of charts that will add to your perspective and help inform your own view – whether it’s bearish, bullish, or something else!

The purpose of this note is to add some extra context and color. It’s worth noting that the aim of the #ChartStorm isn’t necessarily to arrive at a certain view but to highlight charts and themes worth paying attention to. But inevitably if you keep an eye on the charts they tend to help tell the story, as you will see below.

So here’s another S&P 500 #ChartStorm write-up!!

1. Key levels and triggers: September has not disappointed. Volatility kicked

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