Mid Term
January 29, 2024 | Daily JAM, F, GM, Mid Term, TSLA, Videos |
Today’s Trend of the Week video is Bad News from Tesla is even worse news for other electric vehicle companies. On January 24, after the close, Tesla announced a slight miss on their earnings report. Guidance was rather sparse but grim. Sales grew at about 38% in 2023, well below the 50% target that Tesla regularly touts. The 2024 guidance is even below that, (Wall Street estimates 24%). While this isn’t great for Tesla, it’s much worse for companies like Ford, GM and Volkswagen who are trying to figure out how much to spend and when to build market share for electric vehicles. The companies have been using estimates based on Tesla likely prices and profit margins in order to build their own projectors for their own profitability in electric vehicles. Those estimates, thanks to recent guidance from Tesla, appear to badly outdated, especially if Tesla is considering cutting prices again. Now companies like GM and Ford will have to decide how much pain, and for how long, they’re willing to take in order to get into this market.
January 27, 2024 | AAPL, Daily JAM, Mid Term, Morning Briefing |
It’s a Federal Reserve meeting week, but I expect Apple’s (AAPL) earnings report for its December quarter to be the big event of the week. With the potential to move the tech sector and the market.
January 25, 2024 | Daily JAM, Mid Term, Videos |
Today’s video is Too Far, Too Fast. Yesterday, on January 24, the market hit Wall Street’s consensus 2024 target for the end of 2024. Yep, a bit early. The consensus target for the end of the year 2024 close is an average of 4867 and yesterday the S&P closed at 4868. The median target is 4950, and the high end forecast is around 5200–only 350 points from where we are. We’re still awaiting confirmation that the Fed will cut rates and when that happens (likely in June or July–not March), more money will come into the market. This mid-year injection of money is good, but how much of a reward is there in a market that may have already reached its target for 11 months from now? At this point, investors are chasing momentum in an attempt to make up for missing the mark in 2023. That leaves the market risky at the moment. There’s not a whole lot of reward in a market that moves sideways with very few big moves on the up side. We may very well finish the year flat from these levels.
January 23, 2024 | Daily JAM, Mid Term |
China will launch a new stabilization package including about 2 trillion yuan ($278 billion) to buy mainland shares via offshore trading links in the coming days, government sources say. This would come after a market rout that has erased more than $6 trillion in market value from mainland China and Hong Kong stocks since a peak reached in 2021. And certainly China’s stocks rallied on the news. The NASDAQ Golden Dragon Index of Chinese stocks traded in the United States closed up 4.84% today, Tuesday, January 23. But considering the extent of the losses and its duration, I’d count a less than 5% gain–especially since the index was up by more than 6% earlier in the day.
January 20, 2024 | Daily JAM, Mid Term |
In a week where the U.S. Standard & Poor’s 500 and NASDAQ Composite and NASDAQ 100 set new record highs, China’s stock market turned in another big move to the downside. The Hang Seng China Enterprises Index has already lost 11% in 2024. That comes after a record four-year losing streak and the slump this year has just reinforced the opinion among money managers that “China is uninvestable now.” The Nasdaq Golden Dragon China Index slipped was down by as much as 2.2% at the start of US trading Friday, extending losses to a fifth consecutive day. The grim milestones keep accumulating.
January 16, 2024 | Daily JAM, Mid Term |
Chinese officials have indicated that the government is considering issuing 1 trillion yuan ($139 billion) of new debt under a special sovereign bond plan. The plan would sell ultra-long sovereign bonds to fund projects related to food, energy, supply chains, and urbanization. The sale of this type of ultra-long bonds is rare: In the aftermath of the Asian Financial Crisis in 1998, for example, the government issued special debt to replenish capital for major state-owned banks. The most recent sale was in 2020, when authorities issued 1 trillion yuan worth of those bonds to pay for pandemic response measures. The new round of stimulus is good news for a global economy that has been struggling with lagging growth as China’s economy has slowed. But the plan is bad news for anyone worried about the deep structural problems facing China’s economy.
January 15, 2024 | Daily JAM, Mid Term |
Hertz (HTZ) plans to sell a third of its U.S. electric vehicle fleet and reinvest in gas-powered cars. The company says the shift is due to weak demand and high repair costs for its electric vehicle fleet. Which is dominated by Telsa’s electric vehicles. Electric vehicles make up about 11% of the Hertz fleet and 80% of those electric vehicles are Tesla. The news certainly isn’t a plus for electric cars and electric car makers. But I think it’s also important not to forget that Hertz is struggling to show improvements to its bottom line. Tesla’s price cuts–and their effect the resale value of the Hertz fleet–may have more to do with this abrupt about face than weak demand and higher repair costs.
January 11, 2024 | Daily JAM, Mid Term, Morning Briefing |
CPI inflation isn’t falling as quickly as economists had predicted and as investors and traders had hoped. At the least, the numbers call into question the belief that the Federal Reserve will begin to cut interest rates as early as its March 20 meeting.
January 1, 2024 | Daily JAM, Jubak Picks, Mid Term, PANW, Special Reports, Stock Alerts, Top 50 Stocks |
GREATER Growth Stock Pick #9: Palo Alto Networks (PANW). I’m not going to try to convince you that shares of cyber-security favorite Palo Alto Networks are a value stock. It trades at 166 times trialing 12-month earnings per share. And I’m not going to try to convince you that this is an undiscovered stock that’s going to sneak up on anyone. The shares was up 111% in 2023. (The stock has been a member of my long-term 50 Stocks Portfolio since July 17, 2019. In that time the position is up 296%.) But remember the point of this Special Report–I’m looking for great growth stocks, which aren’t cheap in this market by any means, with catalysts in the next year or two that will push growth higher. And here I think Palo Alto Systems rings the bell three times over.
December 28, 2023 | Daily JAM, Jubak Picks, Mid Term, Morning Briefing, Special Reports, Top 50 Stocks, Volatility |
GREATER Growth Stock Pick #8: BYD (BYDDF). I know; I know. What’s a Chinese stock doing on this list? It’s here because BYD, not Tesla (TSLA) is the big growth story in electric vehicles and not just for this month–but for years. And because I can see two catalysts that are about to power this stock higher. Morningstar calculates that BYD is 20% undervalued right now. Because this is a China stock we’ll need to take a deep look at valuation later in this post. But first, the growth story.
November 10, 2023 | Daily JAM, Mid Term, Morning Briefing |
My bets on rising volatility have been hammered in the last few days. The December 20 Call Options on the CBOE S&P 500 Volatility Index (VIX) at $280 a contact dropped another 21% today to $121 a contract. The January 17 Call Options at 17 that I bought for $268 closed at $211, down another 16%.The VIX itself ended the day at 14.23, down 7% for the session. It’s sure hard looking at losses like this. But I would remind you that the VIX is very volatile. The volatility index was at 21.71 on October 20. And that the calendar is marked with two big events that could reunite financial market volatility, one courtesy of the House of Representatives and the other courtesy of the Federal Reserve.
November 7, 2023 | Daily JAM, Mid Term, Morning Briefing |
Credit card debt surged again during the third quarter and so did the number of people missing payments, according to data released today, November 7, by the Federal reserve Bank of New York. Credit card balances rose by $48 billion in the third quarter to a record high of $1.08 trillion The $154 billion year-over-year gain in debt was the largest such increase since of this beginning of this data in 1999.
