Daily JAM
June 1, 2023 | AMAT, AMD, CVS, Daily JAM, Dividend Income, EMR, GOOG, ILMN, Jubak Picks, Long Term, MSFT, NVDA, Top 50 Stocks, TSM, Volatility |
Artificial intelligence really is a paradigm-breaking, transformative technology. Right now, investors are so enthusiastic about the sector, especially the obvious leader Nvidia (NVDA), that we’re looking at a potential bubble that will collapse with much gnashing of teeth and I-told-you-so “wisdom” casting doubt on the reality of the entire endeavor. I think a bubble is indeed possible. Nvidia did trade at a trailing twelve-month price-to-earnings ratio of 196 on May 31, after all. But I think you do want to own the sector now–because the breaking of the bubble, if it does break is, in my opinion, two quarters or more away. And you want to own the sector for the long run–say, 10 years or more–because it is such a game changer for so much of the economy. But what to own? I’ve put together a list of the 10 stocks that I think are the best way to participate in the AI gold rush.
June 1, 2023 | Daily JAM, Morning Briefing |
What’s the difference between a “skip” and a “pause.”
That’s the question the Federal Reserve has posed to the financial markets today. Fed Governor and Vice-chair nominee Philip Jefferson said today that any decision to hold rates steady should not be viewed as the end of the tightening cycle. Coming just two days before the beginning of the Fed’s pre-meeting quiet period, Jefferson’s comments are being seen by the market as a preview of the Fed’s action at its June 14 meeting.
May 31, 2023 | Daily JAM, Perfect Five-ETFs |
The hits just keep on coming. On Wednesday, the release of May numbers on factory activity provided the most recent bit of bad news. China’s official manufacturing Purchasing Managers’ Index dropped to 48.8 this month, down from 49.2 in April, according to data released by the National Bureau of Statistics on Wednesday. It was the second straight contraction. In this index, a reading above 50 indicates expansion, while anything below that level shows contraction. The index, which mainly covers larger businesses and state-owned companies, is at its lowest level since December. In that month China ended most of its pandemic restrictions early that month. That led to hopes of a big economic rebound. And a strong stock market rally.
Now those hopes look premature or just plain exaggerated.
May 31, 2023 | Daily JAM, Morning Briefing |
The latest Job Opening and Labor Turnover Survey, or JOLTs report, released yesterday, May 30, Tuesday, showed 10.1 million job openings at the end of April. That was an increase from the 9.8 million in job openings reported in March. Economists surveyed by Bloomberg had expected 9.4 million openings in April. This higher-than-expected number has, this morning, led to fears that the labor market is still stronger than the Federal Reserve would like. Which could lead to a Friday report of a stronger-than-expected jobs report for May. And a Federal Reserve interest rate increase at the central bank’s June 14 meeting.
May 30, 2023 | Daily JAM, Perfect Five-ETFs, Videos, Volatility |
Today’s Quick Pick is Short iShares China Large-Cap ETF (FXI) COVID is back in China with a new peak of an estimated 65 million cases a week. It’s not as bad as the last peak which saw 35 million cases a day, but it’s enough that the economy will take a hit. And China’s reopening recovery was already looking a bit shaky. During the last wave of COVID, the iShares China Large-Cap ETF (FXI) fell to $20.95. The ETF rose steadily from that low on optimism over China opening back up. The economy didn’t bounce back as quickly as expected and FXI has stayed in the $27-$28 range recently. My suggestion is to buy an August Put Option. That will leave enough time for the COVID wave to play out. The August 18 Put with a strike price of 27, trades at just $1.00 or $100 for a contract of 100 shares of the ETF. That price makes this an affordable volatility play on a macroeconomic trend, and I’ll be adding this to my Volatility Portfolio portfolio on my paid site, JubakAM.com, and selling this ETF out of my Perfect 5 ETF Portfolio.
May 30, 2023 | Daily JAM, Mid Term |
This week’s Trend of the Week video is COVID is Hitting China Again. China is seeing another wave of COVID. We can expect this wave to peak at the end of June with around 65 million cases a week. While that’s a huge number, the previous wave saw 35 million cases a day. So, yes, this is a smaller wave, but it certainly won’t help China’s economy, which is struggling to get back to a 5% growth rate. The country is also dealing with a youth unemployment crisis where the recent graduate unemployment rate is around 25%. This wave of COVID isn’t likely to shut down the entire country–if only because China’s leadership isn’t about to go back to the prior policy of widespread closures of factories and entire neighborhoods–but it is likely that some people will be less inclined go out, mandate or not, and they may self-impose their own lockdown until the wave subsides. This is all likely to take a bite out of the growth rate which was edging back toward 5%. As stocks stagnate and a recovery rally in China looks to be coming to an early end, I’ll be posting about shorting China ETFs on my paid site, JubakAM.com.
May 29, 2023 | Daily JAM |
Pick #1 for my Special Report Finding the Next Nvidia: Luminar Technologies (LAZR). Could Luminar be the next Nvidia? Yes, if the Lidar market develops in the right way. Certainly, so far, the company is doing everything internal right.
May 29, 2023 | Daily JAM, Morning Briefing |
President Joe Biden and House Speaker Kevin McCarthy agreed on a deal that would raise the debt ceiling and avert a default by the U.S. government. If they can get it through Congress where a core of ultra-conservative Republican House members is very unhappy that McCarthy didn’t extract more concessions from the White House. The first test for the deal is the House Rules Committee.
May 27, 2023 | Daily JAM |
You’re entitled to feel a bit (or more) of debt ceiling fatigue. For a change of pace, look to Friday, June 2, when the Bureau of Labor Statistics releases its jobs report for May. Economists project that the U.S. economy added fewer than 200,000 jobs in May. That would be a big dip from the average monthly gain of about 370,000 over the last year. Average hourly earnings are forecast to have increased by 0.3% in May from April.
May 26, 2023 | Daily JAM, Short Term |
If negotiators reach a deal on resolving the debt ceiling crisis that only begins a process fraught with nailing-biting delays built into the legislative process. And opposition to the deal from progressive Democrats and ultra-conservative Republicans. Today, the stock market finished strongly higher on hopes that a deal that avoids a U.S. debt default is within reach. And on continued hyper-enthusiasm about anything vaguely touched by artificial intelligence. Next week, isn’t likely to show a smooth continuation of the upward trend. I’d expect headlines about disappointment with the deal and on the possibility that there aren’t enough centrist Democratic and Republican votes to pass the deal. I expect the deal to pass, eventually, but that doesn’t mean the market won’t chew its fingernails with worry on any particular day.
May 26, 2023 | Daily JAM, Morning Briefing |
The personal consumption expenditures price index, the Fed’s preferred inflation gauge, rose a faster-than-expected 0.4% in April, the Commerce Department reported this morning, May 26. Core PCE inflation also rose by 0.4% in April. “This is the wrong direction for the Fed,” Diane Swonk, chief economist at KPMG, told Bloomberg. “June will depend on getting outside of debt ceiling issues but a July hike is now in play.”
May 25, 2023 | Daily JAM, Morning Briefing |
They’re still talking. Which is good. It looks like there might be a deal. Which is good. It would be based on kicking all the tough line item decisions on what programs to cut down the road to the August and September budget and appropriations process in Congress.
