U.S. stocks surged for the week, as U.S. President Donald Trump’s decision to withdraw from the Iran nuclear deal sent oil prices sharply higher while tamed inflation data eased concerns about the pace of the U.S. central bank’s tightening strategy.
As a result, the energy sector surged about 4 percent for the week, leading the advancers among the S&P 500’s 11 sectors.
On the economic front, the consumer price index (CPI) for all urban consumers raised 0.2 percent in April on a seasonally adjusted basis, missing the market consensus of 0.3 percent, the U.S. Labor Department stated Thursday.
The index for all items less food and energy raised 0.1 percent in April, also below market estimates of a 0.2-percent gain.
Some analysts believed that the Federal Reserve won’t become more aggressive after the release of tamed inflation data.
On other economic news, the Producer Price Index for final demand rose 0.1 percent in April, seasonally adjusted, missing market consensus of a 0.3-percent gain.
The number of job openings raised to 6.6 million on the last business day of March, beating market consensus of 6.1 million.
In the week ending May 5, the advance figure for seasonally adjusted initial claims was 211,000, unchanged from the previous week’s unrevised level.
The four-week moving average was 216,000, a decrease of 5,500 from the previous week’s unrevised average of 221,500. This is the lowest level for this average since Dec. 20, 1969, when it was 214,500.
U.S. import prices raised 0.3 percent in April, below market consensus of 0.5 percent, while prices for U.S. exports rose 0.6 percent in April, beating market estimates of a 0.3 percent gain.
The preliminary reading of the consumer sentiment remained unchanged at 98.8 in May from the April reading, generally in line with market expectations.
For the week, all three major indices posted solid gains, with the Dow, the S&P 500 and the Nasdaq surging 2.3 percent, 2.4 percent and 2.7 percent, respectively. (Source: Xinhua)
Hot Stock Analysis: Entercom Communications Corp (NYSE: ETM)
Investors rushed to trade on Entercom Communications Corp (NYSE: ETM) Friday, soon after a drastic change of -1.96% in the share price was observed and the stock become able to close its trade at $7.50. The stock becomes active when traders or investors changed hands with 4,632,007 shares contrast to the three-month volume average of 2.05M shares. The ratio between current volume and 3-month average value, also known as Relative volume was observed at 2.26, validating the stock’s In Play state.
Stock Technical’s & Performances to Explore:
Based on a recent bid, this stock (ETM) was trading at a distance of -39.64% from 52-week high and -1.32% away from its 52-week low price. We observed -27.88% rate of return for a stock for the last 5-trading days, which was maintained for the month at -21.47%. Likewise, the performance for the quarter was recorded as -25.37% and for the year was -24.99%. The comparison of these above mentioned historical values gives an idea to investor whether the stock is ready to shift trend (up to down or down to up) or how the stock has recovered the losses or shed gains during its historical phase. For example, if stock’s weekly and monthly performances are positive as compared to year and YTD performance percentage also seems to decrease in comparison to the previous year performance, then one can say that the stock is bouncing back and may able to gain more and more in near future and vice versa. Although stock’s historical performances are key to consider, don’t invest (or not invest) based solely on it. It’s just one measure of value. As a serious shareholder, you need to look at plentiful factors that can assist you determine whether any given stock is a good investment.
Simple Moving Averages (SMAs) in Focus:
Moving averages is one of the key indicator and the most powerful tool used by traders. A simple moving average is easy to calculate, which allows it to be employed fairly quickly and easily. A textbook definition of a moving average is an average price for a security using a specified time period. The simplest form of a moving average, appropriately known as a simple moving average (SMA), is calculated by taking the arithmetic mean of a given set of values. For example, to calculate a basic 10-day moving average you would add up the closing prices from the past 10 days and then divide the result by 10. If a trader wishes to see a 50-day average instead, the same type of calculation would be made, but it would include the prices over the past 50 days and the same process goes on for 200 days.
Do SMAs Signal a Trend Reversal?
Based on a recent bid, this stock (ETM) was trading at a distance of -24.22% from 20 days simple moving average, and its distance from 50 days simple moving average is -23.49% while it has a distance of -29.23% from the 200 days simple moving average. A moving average’s greatest strength is its ability to assist a trader identifies a current trend or spots a possible trend reversal. Moving averages can also identify a level of support or resistance for the security, or act as a simple entry or exit signal.
Stock’s Volatility Analysis:
Volatility is the degree of variation of a trading price series over time as measured by the standard deviation of logarithmic returns. It generally deals with the amount of uncertainty or risk about the size of changes in a security’s value. It can either be calculated by means of the standard deviation or variance between returns from that same security or market index. The Rule of thumb is higher the volatility, the riskier the security. A higher volatility means that a security’s value can potentially be spread out over a larger range of values. This means that the price of the security can change dramatically over a short time period in either direction. A lower volatility means that a security’s value does not fluctuate dramatically, but changes in value at a steady pace over a period of time.
What about ETM Stock’s Volatility?
According to finviz data, ETM stock’s volatility for the week is measured at 10.68%, while for the month it is maintained at 5.16%.
An Eye on Beta Factor:
One gauge of the relative volatility of a specific stock to the market is its beta. A beta approximates the overall volatility of a security’s returns against the returns of a relevant benchmark (usually the S&P 500 is used). Presently, Beta factor for ETM stock stands at 1.02. A beta of 1 indicates that the security’s price moves with the market. A beta of less than 1 means that the security is theoretically less volatile than the market. A beta of greater than 1 indicates that the security’s price is theoretically more volatile than the market. For example, if a stock’s beta is 1.2, it’s theoretically 20% more volatile than the market. Conversely, if an ETF’s beta is 0.65, it is theoretically 35% less volatile than the market. Therefore, the fund’s excess return is predictable to underperform the benchmark by 35% in up markets and outperform by 35% during down markets.
What Do Analysts’ Recommend?
Analysts mean recommendation for the stock is 2.00, (where 1 is Strong Buy and 5 is Strong Sell).
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