Why Does News Impact Investors and Day Traders?
Every investor and day trader is keenly aware of the market volatility so prevalent over the past few weeks – even months. Economic conditions in China have had ripple effects throughout the Asian region even impacting markets in Europe and America. Foreign currency exchanges have also provided significant influence with devaluation concerns in countries such as Greece. But what other events have taken place in recent days that should be of interest to investors and day traders in particular?
Timing is of course critical to the very nature of day trading. Even in extremely volatile markets day traders who exercise their buy and sell orders with precise timing can realize a profit. The strategy includes buying and selling in extremely short timeframes as opposed to the typical long-term buy-and-hold investor. Periods between buying and selling may be a couple of days, a few hours, or even within minutes. This makes research and analysis and keeping abreast of impactful news evens critical to those investors.
CNBC reported the fall experienced this week by the world’s largest retailer – Wal-Mart. The retail giant suffered their worst day in 15 years while they reported to investors that earnings are expected to be flat in the current fiscal year with EPS also dropping from last year. Ripple effects come into play when a player the size of Wal-Mart makes moves to resolve their own economic conditions. As they move to entice shoppers to spend their money with Wal-Mart other retailers will be forced into similar strategies to retain their own customers and market share.
This will result in price and service competition for other retailers such as Target and JC Penney, and others. While retailers get into cutthroat competition for customers it’s those customers who benefit from the retailers’ jockeying for sales. Investors certainly have a quite different point of view. This drop in value brings a significant loss to large Wal-Mart investors. Most notable the total holdings of Walton family members and their controlled entities resulted in a hit in excess of $12 billion. Berkshire Hathaway – a major holder of Wal-Mart stocks – suffered a loss of over $400 million. Individual investors and mutual funds that are invested partially in Wal-Mart stocks took a painful drop in value.
On the plus side those investors or day traders looking for a golden opportunity may see this drop in retailers’ stock values as just the timing they’ve been waiting for to get into some retail markets at bargain rates. In the market investing business one person’s loss is often another’s open door to profits.
USA Today’s Matt Krantz presented his view on the market position for Netflix. Investors were notified this week that earnings are going to miss projections by nearly 13%, which Netflix shareholders are not accustomed to and don’t react to positively. In spite of these disappointing results analysts remain positive on Netflix with the expectation that the company can still recover in the remaining quarter of their fiscal year and even forecasting that the stock could grow in value by 21% over the next 18 month period. Netflix remains a highly-respected player in the S&P 500.
Ireland is also in the news as a rising incubator for technology companies. Dublin is increasing its presence of tech companies in part through low corporate tax rates and minimal regulatory concerns. Cubic Telecom for instance is a small provider of technology services with an employee base of 54 persons, but plans to double their size to be worth $500 million to $1 billion next year according to Barry Napier – CEO. Ireland is experience growth in both human capital and venture capital which is expected to facilitate innovation and growth in the tech sector.
Not to be ignored, biotech firm FivePrime accelerated their stock value through a licensing agreement with pharmaceuticals giant Bristol-Myers Squibb. This exclusive agreement resulted in a significant stock jump in excess of 65%.
What Does the News Mean to Day Traders?
Overall the news from business facilitates growth in confidence for consumer goods. Lower unemployment and reduction in some energy costs foster the belief that even if finances are not significantly better at the moment, there are better times in sight. Such levels of confidence encourage spending on goods and services, and also promote investing and even moderate risk taking.
As reported part-way through Friday S&P 500 companies that had reported earnings exceeded their expectations. This was true of 71% of the businesses that had reported earnings at that time. This is indicative of what analysts are anticipating for the near future making the timing ripe for day traders to mobilize investment strategies to take advantage of growth potential.
SureTrader is a leading online broker with the tools and news access that keeps day traders informed of market trends and conditions that can impact decisions and timing for buying and selling. This provides traders with the ability to react swiftly to take advantage of financial opportunities across national and global markets. Utilization of SureTrader’s sophisticated technology facilitates the quick decisions and lightning-fast trades that make you successful. Keep up to the minute on your holdings utilizing desktop and mobile applications that ensure timely access to SureTrader services – smartphone access is provided for both iOS and Android platforms. Investors can rely on friendly and courteous support 24×7 to allow execution of trades quickly and efficiently even in after-hours trading.