November 6, 2024

What You Need to Know Today:

Will S&P 500 earnings continue to accelerate for the fourth quarter of 2024?

I continue to see this rally continuing through the fourth quarter of 2024vbefore faltering in the first quarter of 2025. That call does assume that we’ll get through today’s election and its aftermath with relatively little actual violence–protests in the streets from the losing side and lots of court cases, but no mass armed violence. And it assumes that projected earnings growth in the fourth quarter will live up to expectations and show the highest growth rate in all of 2024. No one knows what this post-election period will bring. So let’s move onto assumption #2: How likely is it that fourth quarter growth will hold up?

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Watch my YouTube video: Quick Pick Fortinet

Watch my YouTube video: Quick Pick Fortinet

Today’s Quick Pick is Fortinet (FTNT). Fortinet is a cybersecurity company with a concentration in firewalls. They have about 15% of the firewall market. Firewall sales have a four or five year cycle as technology develops and companies need to upgrade their security. Morgan Stanley recently predicted the firewall replacement cycle is likely to begin in the second half of 2025. Fortinet is currently at a 20% discount to Palo Alto Networks, the leader in the cyber security stock sector. FTNT is profitable (GAAP and non-GAAP) with their non-GAAP earnings from the second quarter of 2024 showing 35% profitability. Morningstar predicts operating margins will grow to 38%-40% by 2028. I’ll be adding this to my Jubak Picks portfolio with an eye to 2025.

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Will S&P 500 earnings continue to accelerate for the fourth quarter of 2024?

Will S&P 500 earnings continue to accelerate for the fourth quarter of 2024?

I continue to see this rally continuing through the fourth quarter of 2024vbefore faltering in the first quarter of 2025. That call does assume that we’ll get through today’s election and its aftermath with relatively little actual violence–protests in the streets from the losing side and lots of court cases, but no mass armed violence. And it assumes that projected earnings growth in the fourth quarter will live up to expectations and show the highest growth rate in all of 2024. No one knows what this post-election period will bring. So let’s move onto assumption #2: How likely is it that fourth quarter growth will hold up?

read more
Pick #7 CNH industrial for my Special Report “10 new stock ideas for an old rally”

Pick #7 CNH industrial for my Special Report “10 new stock ideas for an old rally”

Today I added CNH Industrial (CNH) as Pick #7 for my Special Report “10 new stock ideas for an old rally.” I also added the stock to my Jubak Picks Portfolio. Here’s what I wrote:
I like farm equipment maker CNH Industrial for the same reason I own Deere (DE) in my long-term 50 Stocks Portfolio. In the long term the world’s farmers are facing a huge challenge: produce more food as an increasingly chaotic climate makes growing stuff harder and harder. One important piece of the solution is a new generation of intelligent farm equipment that uses artificial intelligence to guide everything from when to plant to when to fertilize. At the moment, though, I like CNH more on price. CNH, the #2 farm equipment maker, is invitingly attractive because it is so cheap, absolutely and in comparison to Deere.

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Saturday Night Quarterbacks says (on a Sunday), For the week ahead expect…

Saturday Night Quarterbacks says (on a Sunday), For the week ahead expect…

In normal times, the November 7 meeting of the Federal Reserve’s interest-rate setting body, the Open Market Committee would be the big event of the week. But these aren’t normal times in case you haven’t noticed. The country faces a stark choice on Tuesday and the polls show essentially a dead heat. And then add in fears that Donald Trump and/or his followers won’t accept the election results if he loses. Traders and portfolio managers have been adding hedges to protect against market volatility in the days around the election.

read more
Special Report: Welcome to the new age of catastrophe capitalism–Part One, what capital markets will look like

Special Report: Welcome to the new age of catastrophe capitalism–Part One, what capital markets will look like

Let’s talk today about the changes that global climate change is creating in our capital markets and on the very structure of current capitalism. Part One of this Special Report will look at the nature of the changes. Part Two, later this week, will look at specific implications for your portfolio. Hurricanes Helene and Milton are the perfect case study for the coming changes in capital markets and capitalism.

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Live Market Report (20 minute delay)

Watch my YouTube video: Quick Pick Fortinet

Watch my YouTube video: Quick Pick Fortinet

Today’s Quick Pick is Fortinet (FTNT). Fortinet is a cybersecurity company with a concentration in firewalls. They have about 15% of the firewall market. Firewall sales have a four or five year cycle as technology develops and companies need to upgrade their security. Morgan Stanley recently predicted the firewall replacement cycle is likely to begin in the second half of 2025. Fortinet is currently at a 20% discount to Palo Alto Networks, the leader in the cyber security stock sector. FTNT is profitable (GAAP and non-GAAP) with their non-GAAP earnings from the second quarter of 2024 showing 35% profitability. Morningstar predicts operating margins will grow to 38%-40% by 2028. I’ll be adding this to my Jubak Picks portfolio with an eye to 2025.

Will S&P 500 earnings continue to accelerate for the fourth quarter of 2024?

Will S&P 500 earnings continue to accelerate for the fourth quarter of 2024?

I continue to see this rally continuing through the fourth quarter of 2024vbefore faltering in the first quarter of 2025. That call does assume that we’ll get through today’s election and its aftermath with relatively little actual violence–protests in the streets from the losing side and lots of court cases, but no mass armed violence. And it assumes that projected earnings growth in the fourth quarter will live up to expectations and show the highest growth rate in all of 2024. No one knows what this post-election period will bring. So let’s move onto assumption #2: How likely is it that fourth quarter growth will hold up?

Pick #7 CNH industrial for my Special Report “10 new stock ideas for an old rally”

Pick #7 CNH industrial for my Special Report “10 new stock ideas for an old rally”

Today I added CNH Industrial (CNH) as Pick #7 for my Special Report “10 new stock ideas for an old rally.” I also added the stock to my Jubak Picks Portfolio. Here’s what I wrote:
I like farm equipment maker CNH Industrial for the same reason I own Deere (DE) in my long-term 50 Stocks Portfolio. In the long term the world’s farmers are facing a huge challenge: produce more food as an increasingly chaotic climate makes growing stuff harder and harder. One important piece of the solution is a new generation of intelligent farm equipment that uses artificial intelligence to guide everything from when to plant to when to fertilize. At the moment, though, I like CNH more on price. CNH, the #2 farm equipment maker, is invitingly attractive because it is so cheap, absolutely and in comparison to Deere.

Saturday Night Quarterbacks says (on a Sunday), For the week ahead expect…

Saturday Night Quarterbacks says (on a Sunday), For the week ahead expect…

In normal times, the November 7 meeting of the Federal Reserve’s interest-rate setting body, the Open Market Committee would be the big event of the week. But these aren’t normal times in case you haven’t noticed. The country faces a stark choice on Tuesday and the polls show essentially a dead heat. And then add in fears that Donald Trump and/or his followers won’t accept the election results if he loses. Traders and portfolio managers have been adding hedges to protect against market volatility in the days around the election.

Economy added only 12,000 jobs in October–if we can trust the data

Economy added only 12,000 jobs in October–if we can trust the data

The U.S. economy added 12,000 jobs in October. The unemployment rate, which uses a different survey method, held steady at 4.1%. The Bureau of Labor Statistics revised the August and September reports to take a total of 112,000 jobs off earlier estimates. The average job growth over the past three months is now 104,000, down from 189,000 over the six months before that. The revised data and the October estimate are both more in line, in my opinion, with what is likely to have been happening in the economy as the result of high interest rates from the Federal Reserve. I thought hugh interest rates should have been slowing the economy more than the initial data suggested. And now it it looks like those high rates were working much more in line with past history of the economy. Of course, the big question today is should we believe the October report

Lithium Americas closes $2.3 billion DOE loan–stock climbs and then gives it all back

Lithium Americas closes $2.3 billion DOE loan–stock climbs and then gives it all back

Yesterday, Lithium Americas (LCA) announced that it had closed a $2.26 billion loan from the U.S. Department of Energy’s Loan Programs Office under the Advanced Technology Vehicles Manufacturing Loan Program. The funding is earmarked for the construction of processing facilities at the Thacker Pass lithium project in Humboldt County, Nevada. Thacker Pass is currently North America’s largest known lithium resource. The stock jumped almost 5% yesterday on the news. It fell 8.87% today to $4.11 a share. Lithium Americas is a member of my Millennial Portfolio.

Special Report: Welcome to the new age of catastrophe capitalism–Part One, what capital markets will look like

Saturday Night Quarterback (on a Sunday) says, For the week ahead expect…

The week will bring Big Tech earnings reports and more earnings reports. All capped on Friday with the October jobs report, the last one before the November 7 meeting of the Federal Reserve on interest rates. (Which means that the Fed will be in its blackout period before the meeting–so no Fed speeches.) And, just for good measure, third quarter GDP figures are due Wednesday, October 30, and PCE inflation numbers are scheduled for Thursday, October 31.

A new pick–TSM–for my Special Report “10 Trump and 10 Harris winners”

Is a guidance cut from Texas Instruments another sign of a top?

One indicator that I’m carefully monitoring is the guidance in third quarter earnings conference calls about the fourth quarter. I’m checking to see if the cuts to guidance and that Wall Street disappointment might set in a quarter early. If that looks like the case then I’d think about selling now instead of in January 2025.

Another bad day for bonds–10-year Treasury yield hits 4.28%

Climb in yield on 2-year Treasury says bond market is rethinking rate-cut trajectory

Two-year Treasury yields have climbed 34 basis points since the Federal Reserve reduced interest rates on September 18 for the first time since 2020. Rising yields “reflect the reduced probability of recession risks,” Steven Zeng, an interest rate strategist at Deutsche Bank told Bloomberg. “Data has come in pretty strong. The Fed may slow the pace of rate cuts.” We’ve read this story before

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